Translated version of this PSD: Polish
Up to EUR 100 million equivalent senior, multicurrency, unsecured loan to PKP Cargo S.A. (“PKP Cargo” or the “Company”) to refinance the acquisition of Advanced World Transportation (“AWT”), the second-largest rail freight operator in the Czech Republic.
The acquisition of AWT is seen as a key milestone in the Company’s strategy of international expansion. A focus on intermodal operations is a key driver for expansion on the Baltic-Adriatic-North Sea railway transportation corridor. Following the acquisition of AWT, PKP Cargo will be able to take advantage of the AWT’s intermodal terminals, to develop new routes and provide comprehensive logistics and transportation services in an extended transportation corridor.
The Project’s main sources of transition stem from: a) more widespread private ownership: and b) demonstration of new replicable behaviour.
The acquisition of AWT, with operations in the Czech Republic, Slovakia, Slovenia, Hungary, Germany, Romania, Bulgaria, Croatia and Poland, will be a milestone in the international expansion of PKP Cargo, supporting the implementation of the post-privatisation corporate strategy and will also allow the Company to obtain a more diversified portfolio less dependent on bulk transport within Poland. If successful, the Project will demonstrate the commercial viability of the private model to other state-owned railway operators in the region.
The Project also facilitates one of the few cross-border transactions in the region. With the AWT acquisition, PKP Cargo will have access to seamless border crossings with the Czech Republic (a Technical Trust Agreement is already signed), better infrastructure (via the terminal in Ostrava-Paskov) and has the potential to become a one-stop shop for cross-border intermodal loads. This should encourage modal shift from road to other modes, such as rail and waterborne transport.
PKP CARGO S.A is Poland's largest, and Europe's second largest railway freight transport operator. The Company was initially privatised in October 2013, with a secondary public offering taking place in 2014 and is currently 67 per cent owned by private investors while 33 per cent remains owned by PKP S.A., which is in turn owned by the Polish Treasury.
EBRD Finance Summary
Total Project Cost
Environmental and Social Summary
The Project has been categorised B in accordance with EBRD’s 2014 Environmental and Social Policy. The Bank is familiar with PKP Cargo environmental and social management systems from previous transactions and environmental and social due diligence (ESDD) confirmed that the Company is in general compliance with Polish and EU environmental standards, has relevant E&S management systems in place and the institutional capacity to implement the Project in line with EBRD’s PRs. The ESDD for the current Project focused on potential environmental and social risks related to refinancing of the acquisition of 80 per cent shares of Advanced World Transportation (Target Company). The reviewed Target Company subsidiaries: AWT a.s., the rail freight operator; AWT Rosco, operator of rail cistern cleaning facilities and waste water treatment plant; and AWT Recultivace, landfill operator and remediation services provider are in general compliance with Czech and EU environmental standards and have the institutional capacity to implement the Project in line with EBRD’s PRs. The latter two subsidiaries operate under an IPPC permitting regime. Individual subsidiaries have implemented environmental and H&S managements systems compliant with ISO14001 and OHSAS 18001 and monitor their environmental and H&S performance on a regular basis. No retrenchment is planned following the acquisition by PKP Cargo, however the Company will need to apply PR2 requirements should such process be undertaken in the future.
The ESDD identified that some additional resources and procedures are needed at AWT to achieve compliance with the EBRD’s PRs. An Environmental and Social Action Plan (“ESAP”) was developed to address environmental and social issues. The ESAP will include, inter alia, establishment of corporate H&S and environmental management and reporting, in line with systems adopted by PKP Cargo, development and implementation of HR policies and internal grievance mechanism in accordance with PR2, improvement to some H&S practices for confined space work, as well as establishment of grievance mechanism for public and implementation of corporate stakeholder engagement plan. The Company will provide to EBRD annual reports on the implementation of the ESAP and environmental and social performance. The Bank will monitor the Company’s compliance with the agreed environmental and social commitments through reviewing these reports and periodic monitoring visits, as required.
Company Contact Information
Contact Name: Media Office
Telephone: +48 663 290 777
Fax: +48 22 474 28 19
Postal Address: ul. Grójecka 17, 02-021 Warsaw, Poland
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