Project Nyva

Location:

Ukraine

Project number:

45539

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Target board date:

11 Jun 2014

Status:

Repaying

PSD disclosed:

08 Jan 2014

Translated version of this PSD: Ukrainian

Project Description

The EBRD is considering providing a secured long-term loan of up to US$ 30 million to Nyva Pereyaslavshchyny LLC to finance its capacity expansion programme in 2013/2014 and to partially refinance some of its short and middle term loans.

Transition Impact

The transition impact is derived from the demonstration effect of expanding the company’s modern farming techniques, recognised as one of the most efficient crop producing and pig breeding operations in Ukraine. 

Furthermore, the company’s expansion will generate strong linkages with meat processors and retailers by increasing the supply of high and consistent quality and biologically safe pigs and pork that should potentially increase overall consumption of domestically produced pork and lead to higher prices for the premium segments. 

Finally, the project will also set standards of corporate governance and business conduct in the pig breeding sector in terms of advanced sustainable energy solutions, environmental and health and safety standards. The latter involves gradual adoption of the most recent EU standards on animal welfare.

The Client

Nyva Pereyaslavshchyny is the principal company of a vertically integrated group of companies active in crop production, pig breeding and processing activities.

EBRD Finance

Senior long-term loan of up to US$ 30 million.

Project Cost

US$ 80.1 million.

Environmental Impact

Categorised B.  This project was originally subject to an Initial Environmental and Social Examination (IESE) to investigate whether there are any elements of the project likely to trigger an “A” categorisation. The IESE was undertaken by a member of the Environment and Sustainability Department and included meetings with the company and site visits to production facilities and a selection of pig farms. The IESE focused in particular on those facilities that would benefit from EBRD finance. The IESE concluded that while there may be some significant impacts particularly associated with manure management and disposal, those impacts are well understood and quantified. The key issues associated with the project could therefore be assessed within the context of standard “B” level due diligence with an emphasis on selected key issues for the pig farms including regulatory compliance, manure management, animal welfare and stakeholder engagement. Independent consultants were therefore employed to undertake environmental and social due diligence on the project, including the development of an environmental and social action plan, a stakeholder engagement plan and associated materials such as a non-technical summary of the project.

The overall conclusions of environmental and social due diligence was that environmental, health, safety and social management was generally satisfactory. The focus for the company is compliance with national EHS requirements, and the company is subject to regular auditing by the environmental authorities to monitor compliance. Key environmental issues identified during due diligence include control of dust emissions from the feed mill and silos, discharge from and condition of wastewater treatment plant, bunding of bulk storage tanks and uncovered slurry tanks at the pig farms. In addition the meat processing facility and one farm have residential houses located within the sanitary protection zone. The key health and safety risks identified during due diligence are with regards to the meat processing facility and include uncontrolled access near to people performing hazardous operations, use of PPE whilst using knives, guarding on saws and improved drainage areas to minimise slip hazard risk.

In terms of livestock, the overall level of compliance with animal welfare requirements was good in most cases. A training programme is in place for all staff with training obligatory for incoming staff and certification of those involved in animal handling and transportation. However, the three following key areas have been identified where actions are required to bring farm animal welfare practices in line with EU welfare standards those being adjustments to current housing for sows and gilts, modification of stocking densities for finishers, and provision of further enrichment in cages.

Management of HR is carried out from the head office and is done in accordance with Ukrainian requirements. The company employs both permanent and seasonal labour, and all workers are provided with a job description with terms of employment and required qualifications being based on those job descriptions. Principal due diligence findings relate to the lack of formal employment policies covering the range of HR issues and the lack of employment contracts detailing terms and conditions. No on-going specific concerns from communities or any local groups relating to the currently operating pig farms and production facilities were noted during due diligence. The pig farms are relatively distant to most local communities with them being 1.5km or more away. The exception to this is the meat processing facility which is up to 500m away from houses in the village of Pereyaslavshchyny.  The company has some interaction with local communities but mainly in the context of the approval of new facilities and as part of the consultation on the impact assessment process.

Actions to address all the issues identified through due diligence have been included within an Environmental and Social Action Plan (ESAP) which has been reviewed and agreed with the company. The ESAP covers HR actions, environmental actions, health and safety actions and animal welfare actions. The ESAP is structured to bring the company into compliance with the Bank’s Performance Requirements. The majority of the actions will be finished by the end of 2014. 

Technical Cooperation

None.

Company Contact

Nyva Pereyaslavshchyny LLC 
2 Pryvokzalna str
v. Pereyaslavske
district of Pereyaslav-Khmelnitskiy
region of Kiev
Ukraine

Oleksandr Kucher
Chief Financial Officer
Email: kucher_oleksandr@niva-sa.com.ua

 

Business opportunities

For business opportunities or procurement, contact the client company.

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