Technonicol Regional Expansion & Resource Efficiency

Location:

Russia

Project number:

45681

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

25 Jun 2014

Status:

Cancelled

Translated version of this PSD: Russian

Project Description

The EBRD is considering a senior corporate secured loan to TechnoNICOL in the amount of up to EUR 30 million. The financing will be spent on the modernisation and expansion of existing stone wool operations as well as the construction of new production capacity in regions, where the company does not have a presence yet.

The EBRD loan will be used to finance the capital investments of the TechnoNICOL Group.

Transition Impact

1. Demonstration of new, replicable behaviour and activities. The project will promote migration from older production processes to state-of-the-art platforms, completely in line with the EU Best Reference Document for stone wool production and substantially aboveprevailing practices in Russia and CIS.

2. Institutions, laws and policies that promote market functioning and efficiency. TechnoNICOL will join the Bank’s efforts in advocating for continued energy efficiency reforms in the buildings and construction sectors.

3. Transfer and dispersion of skills. TechnoNICOL will scale up its training operations by opening new training centres and help to develop much-needed linkages with materials installers, developers, retailers and financial institutions, other intermediaries and end-users. Furthermore, TechnoNICOL has committed to improve linkages with financial intermediaries in promoting energy efficiency by agreeing to involve EBRD RuSEFF consultants in its training activities in regions.

The Client

TechnoNICOL Corporation is one of the largest Russian manufacturers and suppliers of roofing and water/heat insulation materials with 38 plants in Russia and the CIS as well as 160 sales offices in 36 countries around the world.

EBRD Finance

Senior corporate secured loan to the borrower in the amount of EUR 30 million.

Project Cost

EUR 80 million.

Environmental Impact

Category B: The environmental and social issues associated with mineral wool production are well known to the Bank and are site specific and readily identified and addressed through appropriate mitigation and management measures. The modernisation and expansion of the company’s mineral wool plants and implementation of energy and resource efficiency investments are expected to result in environmental benefits including reduced emissions and energy requirements. Due diligence has been undertaken by the Bank’s Environmental and Sustainability Department (ESD) and has included a visit to the company’s reference plant in Ryazan and completion of E&S questionnaires by the company.

The Ryazan plant has also been subject to an energy efficiency audit by an independent consultant. Based on the due diligence, the Bank has confidence in the company’s ability to operate its plants in line with the EBRD Performance Requirements. The production line at the Ryazan plant is compliant with EU standards, specifically the EU Bref Note on the Manufacture of Glass 2013 (includes mineral wool). Despite the fact that the briquetting plant in Ryazan is associated with elevated emissions (dust and ammonia) these are contained within the plant building with no direct emissions to the atmosphere. The company is currently addressing this issue. The Ryazan plant will be used as a reference for the upgrade and expansion of existing plants as well as the greenfield plant in Rostov that is currently under construction.

The proposed greenfield plant as well as the modernisation and expansion, including reconstruction of some production lines, of the Chelyabinsk, Ryazan and Khabarovsk plants has been subject to a local OVOS (EIA) process. Other modernisation plans (low CapEx) for Zainsk and Yurga are not subject to an OVOS. Emissions levels at all plants are generally below EU BAT limits (EU Bref note limits and EU Industrial Emissions Directive limits) although there are elevated CO and dust levels at the Chelyabinsk and Zainsk plants respectively, which will be addressed through implementation of the ESAP. Off-gases are recycled back into the furnaces and various emission abatement kit (cartridge filters) is in place to capture and reduce emissions. Industrial water is recycled and wastewater discharges are related to domestic water needs. Waste materials are recycled back into the process.
Some plants include briquetting plants for the recycling of waste materials. Russian Labour Law is compliant with ILO requirements and the company has, and will remain, compliant with Russian regulations. The management of environmental and health and safety issues is focused at the plant level drawing on corporate level policies. Plants are located in industrial and commercial areas and no significant community issues are expected. A corporate and asset level Environmental and Social Action Plan (ESAP) is agreed with the Company. The ESAP includes among other requirements the development of an Environmental and Occupational Health and Safety Management System; all Project financed components’ development in line with the EU standards; contractor management procedures and Construction Environmental Management Plan for Rostov plant; on-site traffic management systems; and site specific Stakeholder Engagement Plans for each plant where EBRD financing is used.. The company will be required to submit annual Environmental and Social reports to the Bank and ESD will monitor the Project as required.

Technical Cooperation

An energy and resource efficiency audit was undertaken within the GEF-funded Market Transformation Programme on Energy Efficiency in Greenhouse Gas-intensive Industries in the Russian Federation, which reviewed the performances of the Group’s operations and analysed a set of process and energy efficiency upgrades to be included in the modernisation programme financed by the Bank.

Company Contact

Zhanna Makhotkina, CFO
ООО TechnoNICOL Construction Systems
Tel: +7 495 925 5575
E-mail: makhotkina@tn.ru

 

Business opportunities

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