Sadovaya Coal Recycling

Location:

Ukraine

Project number:

42621

Business sector:

Natural resources

Notice type:

Private

Environmental category:

B

Target board date:

22 Nov 2011

Status:

Disbursing

PSD disclosed:

14 Sep 2011

Translated version of this PSD: Ukrainian

Project Description

The project will finance the establishment of a coal recycling business to produce energy coal from waste dumps and tailing ponds in Eastern Ukraine. It will develop a recycling technology with clear efficiency and environmental remediation benefits new to Ukraine.

Transition Impact

The project will support the private sector in the State-dominated coal industry in Ukraine. Positive transition impact is expected to arise from the demonstration effect of the efficiency improvements arising from the introduction of modern technology for the recycling of waste coal, and improving transparency and environmental and health & safety standards in the Ukrainian coal sector.

The Client

Interdon, a 100% indirectly owned subsidiary of Sadovaya Group SA , a Luxembourg-based holding company of a Ukrainian coal mining and trading enterprise.

EBRD Finance

Loan up to USD 36million.

Project Cost

Up to USD 48million.

Environmental Impact

Screening categories and rationale for classification

Categorised B in accordance with the EBRD’s E&S Policy 2008: due diligence undertaken by the EBRD’s independent consultant has confirmed that E&S impacts at the Company's proposed project locations are site specific and any residual risks have been addressed by way of an agreed action plan.

Information reviewed


Due diligence comprised a site visit by the independent consultant, management discussions and document review during August 2011.

Environmental and Social issues

The project can currently be considered to be in the development phase and site locations are currently being selected for the citing of the processing plants. As such, E&S management systems have not yet been developed by the Company and regulatory approval for the projects will only be provided when design documents have been completed by the Company. The EBRD requires that this be addressed prior to construction / commissioning as appropriate.

The proposed locations of processing plants are likely to be degraded environments at existing / former coal works. Notwithstanding this, there are potential project site locations which may be include residential areas within Sanitary Protection Zones (SPZs) at one or two of the sites. The project sites may therefore be deemed to be a contributing facility to SPZ issues and therefore assume responsibility for potential resettlement of residences. The EBRD requires that this be fully assessed during project design feasibility studies and to demonstrate that there is no net impact to the SPZ as a result of the project. In the event that resettlement is required then the Company is required to complete this in accordance with EBRD and other IFI Policies.

Environmental & social opportunities

Ultimately the project will deliver a net environmental benefit, utilising coal waste stockpiles into a recoverable energy source, reducing the risk of regional degradation of land and water quality and restoring land to its original form.

Summary of Environmental and Social Action Plan (ESAP)

An ESAP has been developed and is currently being agreed with the Company. ESAP items have been divided into three categories: corporate level; construction phase; and operational phase (including decommissioning) actions. The ESAP commits the client to delivering these action items in a timely manner at the appropriate phase of project development.

ESAP items primarily relate to the development of corporate and site specific environmental, health & safety and social management plans and procedures that will address each of the subsequent issues identified during due diligence. Obtaining appropriate regulatory approval for construction and operation of each stage of the project cycle is a requirement of the ESAP.

The ESAP also commits the Company to identify and engage with Company stakeholder regarding project impacts and opportunities. The independent consultant has prepared a stakeholder engagement plan to be implemented and executed by the Company.

Technical Cooperation

None.

Company Contact

Alex Dubyna
IR Manager

Tel: +38 06442 52552
Email: dubyna@sadovaya.com.ua

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

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Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.