The project consists of the partial financing of the acquisition of Sodi Devnya A.D., a Bulgarian soda ash producer, by Solvay S.A, the second-largest industrial company in Belgium.
The EBRD's financing will assist in the first large high-profile privatisation in Bulgaria. The planned capital expenditure programme will improve productivity, energy efficiency and product competitiveness and is also designed to bring environmental practice up to world standards.
The proposed operation is the first cash privatisation of a major state-owned company in Bulgaria and by far the most sizeable foreign investment in the country. It takes place at a time of severe economic crisis due to the delay and partial reversal of structural reforms since 1991. Within this context, the investment could, in conjunction with the implementation of sweeping plans for economic stabilisation, privatisation, restructuring and banking sector reform, serve as a powerful and highly visible signal of a new commitment to market-oriented and investor-friendly policies. The operation would contribute through its success to supporting the new policy of privatisation and attract increased interest in Bulgarian assets by other potential investors.
Sodi is the largest operating synthetic soda ash plant in the world, with an annual installed capacity of 1.2 million tonnes. As of 14 April 1997, Sodi became part of the Solvay Group through the acquisition of 60 per cent of the company's shares by a consortium led by Solvay and including the Turkish glass manufacturer Sisecam.
US$ 40 million (ECU 32.81 million) equity investment
US$ 231.50 million (ECU 189.90 million)
The project has been screened in category B/1, requiring an environmental analysis and audit. No large-scale investment is associated with this specific financing operation. An environmental audit and baseline assessment has been conducted by international and local consultants. Sodi and Solvay have reviewed and commented on the audit and assessment, and a draft Environmental Action Plan (EAP) has been prepared. The capital expenditure related to the implementation of this plan will be financed by Sodi itself. The company will bring the plant into compliance with the relevant legislation and good international practice through the implementation of the EAP over the next seven years. Solvay management is committed to the implementation of the Action Plan. Progress in the implementation of the EAP will be closely monitored.
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