SEVERSTAL PEFF

Location:

Russia

Project number:

7406

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

C

Target board date:

04 Apr 2000

Status:

Completed

PSD disclosed:

26 Jan 2000

Project Description

The project consists of the provision of direct pre-export working capital financing for a leading Russian steel producer and exporter. The EBRD is considering providing medium or long-term debt financing for capital expenditure in a follow-on financing, which is at an earlier stage in the Bank’s approval process.

The project aims to encourage the re-opening of direct bank trade financing as opposed to indirect trade financing by export buyers for Russian companies that are making progress towards good trade practice, improved corporate governance, sound business practices and transparency.

Transition Impact

The project will lead to improvements in environmental and health and safety compliance. It will also have a demonstration effect, showing that a company such as Severstal, which made considerable progress towards improved corporate governance and transparency, can regain access to regular pre-export financing despite the current difficult environment in Russia.

Assuming that Severstal achieves a satisfactory performance under the pre-export financing facility, further impact on the transition will be achieved through the capital expenditure financing.

The Client

OAO Severstal is the largest Russian integrated steel and rolled product manufacturer and operates as a full-production-cycle steel mill, located in Cherepovets, Vologda region, Russia.

EBRD Finance

The financing consists of a three-year working capital facility structured as a revolving pre-export loan financing against the letters of credit from banks acceptable to the EBRD. The facility will be syndicated to commercial banks.

Project Cost

US$ 35 million (approximately EUR 35 million).

Environmental Impact

The project will introduce low-cost improvements in environment, health and safety. More wide-ranging improvements would be facilitated through a contemplated capital expenditure facility.

The project has been screened C/1, requiring an environmental audit. This was carried out by international consultants, and recommendations for an Environmental Action Plan (EAP) have been presented to the EBRD to improve environmental, health and safety practices at the mill. Severstal committed itself to the implementation of the short-term EAP.

Technical Cooperation

Technical co-operation funding may be sought/provided for an enhanced environmental monitoring system for the city of Cherepovets.

 

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

EBRD project enquiries not related to procurement:
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.