1. Determine strategic investor interest in purchasing KAP
2. Identify the best strategy to privatise KAP.
- Increase in private ownership: The privatisation of KAP would lead to the largest part of the Montenegrin economy being in private hands;
- Demonstration effect: A successful privatisation and restructuring of KAP will demonstrate to investors that large, dominant industrial complexes can successfully be restructured;
- More competition in the economy: KAP interacts with about 400 companies in the Montenegrin economy. The privatisation of KAP would introduce competitive practices also to those enterprises.
- Environmental, health and safety issues are numerous, and the performance of environmental control equipment is very poor. At present, KAP does not meet the environmental standards of Montenegro and European Union. The Montenegrin environmental standards are to a very large and increasing extent compatible with EU standards.
- Energy consumption is high and at least partially wasteful. Here as well, performance can be improved and considerable energy saving can be achieved.
- The structures and processes used are partially outdated and do not represent state of the art technology. Modernisation is required, and this will also have positive effects on energy consumption and on the environment.
- The refurbishment of the plant - which is anticipated after privatisation - offers an opportunity to introduce resource efficient technologies and effective environmental controls and improved safety.
- Because of the environmental and public health and safety issues associated with the current operations active public information and consultation will be encouraged. The development of a Public Consultation and Disclosure Plan will be part of the proposed second phase of environmental due diligence. Part of the loan proceeds will be spent on an environmental study and development of environmental and health and safety management which will be covenanted in the loan agreement.
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Text of the PIP