Slovenian Steel Group - Loan

Location:

Slovenia

Project number:

47923

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Target board date:

11 Jan 2017

Status:

Repaying

PSD disclosed:

07 Dec 2016

Translated version of this PSD: Slovenian

Project Description

The provision of up to EUR 40 million senior unsecured loan to SIJ-Acroni and SIJ-Metal Ravne, the fully owned subsidiaries of Slovenska Industrija Jekla d.d. ("SIJ" or the "Company"). The Bank's financing will be part of up to EUR 240 million long-term facility.

Project Objectives

Contribution to the Company's energy efficiency, investment and refinancing programs (the "Project").

Transition Impact

The transition impact of the proposed Project is derived from operational and financial restructuring.

Specifically, the proposed financing facilitates a range of growth initiatives for high margin products as well as investments aiming at an improvement of the production and resource efficiency of the operations which correspond to principles of the EBRD's Sustainable Resource  initiative and Green Economy Transition.

Client Information

SLOVENSKA INDUSTRIJA JEKLA DD

SIJ is a niche specialty steel manufacturer, headquartered in Ljubljana, with manufacturing facilities concentrated in Slovenia but heavily focused on exports which account for 85% of revenues. The Company operates two steel plants: SIJ-Acroni - producing stainless steel and special steel quarto
plates; and SIJ-Metal Ravne - producing specialized tool steel (long products).

EBRD Finance Summary

EUR 40,000,000.00

Up to EUR 40 million senior unsecured loan.

Total Project Cost

EUR 240,000,000.00

Up to EUR 240 million.

Environmental and Social Summary

Category B. The Bank undertook Environmental and Social Due Diligence (ESDD) of the Company.

ESDD included a site visit; a review of questionnaires completed by the Client; and a review of publicly available information. The updated ESDD confirmed that the Company has the capacity to fully implement the Bank's Performance Requirements (PRs), and is in compliance with National
and EU legislation. Each steel plant has dedicated EHS managers and is certified to ISO 14001 and OHSAS 18001 and ISO 50001.

The Company is well managed with good house-keeping, but, due to the sites being in close proximity to residential areas and in a valley, there are on-going requirements to reduce noise as well as overall emissions. This was identified as part of the 2015 due diligence and the Company is continuing to implement a programme to address these challenges. It should be noted that the Company has a well-developed, site specific stakeholder engagement plan (SEP) which forms part of the environmental, health and safety management system. This has been updated in line with the Bank's PR 10.

The operation of steel mills can be associated with a number of environmental and social issues.

The Company has made progress in addressing environmental liability issues and in installing new air emission reduction measures, as well as reducing water and energy use. The steel mills have valid integrated permits and are subject to regular inspection from the regulators. To ensure on-going compliance and the implementation of Best Available Techniques (BAT) in accordance with the good international practice, the Company will need to further invest in technological and environmental upgrades; notably in upgrading air filters and reducing fugitive emissions from the Electric Arc Furnace's, as well as further energy and water efficiency measures. These have been identified by the Company, and an appropriate investment programme has been developed to ensure compliance. The updated due diligence confirmed that the Company is implementing these investments.

None of the current investments require Environmental Impact Assessments under Slovenian/EU legislation.

Overall, due diligence has confirmed that the project can be structured to comply with the Bank's Performance Requirement (PRs); the EU's Industrial Emission Directive (IED); and Best Available Techniques (BAT).

An Environmental and Social Action Plan (ESAP) was been developed and agreed with the Company for the previous transaction to address the identified issues, and to ensure compliance with the Bank's Performance Requirements. The ESAP is included as part of the Framework Agreement
and no changes from the pre-existing document will be required for the current Project.

Additional information on the Company can be obtained from its web site.
The Bank will continue to monitor the performance of the Group and implementation of the ESAP.

Technical Cooperation

None.

Company Contact Information

Igor Malevanov
igor.malevanov@sij.si
+38612429828
+38612429828
http://www.sij.si/en/
Slovenska Industrija Jekla d.d. Gerbiceva 98 1000 Ljubljana, Slovenia
Business opportunities
For business opportunities or procurement, contact the client company.
General enquiries

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