Toplana Zenica d.o.o.

Location:

Bosnia and Herzegovina

Project number:

49253

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

14 Nov 2018

Status:

Disbursing

PSD disclosed:

01 Oct 2018

Translated version of this PSD: Bosnian

Project Description

Provision of a long term senior loan of EUR 41 million to the joint venture Toplana Zenica d.o.o. for the construction of a new Combined Heat & Power Plant (CHP). The project will transfer the production of steam and blast air for ArcelorMittal Zenica's steelworks and the production of district heating water for the City of Zenica, from currently ArcelorMittal Zenica to a modern CHP owned by the Borrower. The Project will entail the replacement of all outdated, coal-based steam generators with modern units fully using recovery gases from the steelworks and natural gas (as back up).

Project Objectives

The proposed project will replace and modernise the existing CHP and provide sustainable source of power and heat for the City of Zenica and Arcelor Mittal Zenica, and will substitute the use of coal with the use of process gases from the steelworks as fuel, and as a result achieve substantial reduction in CO2 emissions, as well as improvement in dust, NOx and SO2 emissions. The Project will also significantly improve the reliability of district heating supply to the City. 

Transition Impact

The transition impact of the proposed project will be derived from:

  • energy efficiency improvements; and
  • improved environmental performance of the CHP in terms of CO2, SOx, NOx and dust emissions, primarily resulting from the replacement of equipment with new BAT units as well as change in fuel mix (discontinuing use of coal and maximising the recovery of waste gases from the steel plant).

Client Information

TOPLANA ZENICA DOO

Toplana Zenica d.o.o. will be a joint venture incorporated in BiH for the purpose of operating the CHP mainly providing steam and hot air to AMZ, and steam to the City of Zenica. Shareholding of the Borrower will be: AMZ, the main offtaker (BiH, 50%), main equipment provider KPA Unicon (Finland, 15%), Finnfund (development fund of the Finnish government, 15%) and the City of Zenica (20%).

EBRD Finance Summary

EUR 18,000,000
Senior unsecured loan to the borrower in the amount of approximately EUR 41 million, comprised of EUR 23 million A Loan for the Bank’s own account, including a) EUR 18 million committed tranche for the EBRD account, b) EUR 5 million committed concessional financing tranche from the Taiwan International Cooperation and Development Fund (Taiwan ICDF) in support of the significant energy efficiency savings this Project will achieve, and B-Loan of EUR 18 million for commercial participants.

Total Project Cost

EUR 53,000,000

Environmental and Social Summary

Category B. Environmental and social issues associated with the modernization of an existing CHP at a steel plant can be readily assessed and mitigated based on an Environmental and Social Due diligence (ESDD). The Bank’s Project is the financing of the power plant modernization through the established JV.

An independent consultant was retained to undertake the ESDD of the Project and associated facilities including the Arcelor Mittal Zenica (AMZ) steel plant. The Bank has provided financing to AMZ in the past and the Company has a good record of Project implementation and reporting. The Project qualifies for 100 % Green Energy Technology (GET).

The ESDD confirmed that the Project will comply with National and EU environmental standards (such as BAT Conclusion Notes) and the Project is structured to meet the Bank’s Performance Requirements (PRs). The new facility will reduce significantly emissions by utilizing waste gasses from the steel plant that are currently flared or in-efficiently used. This will have a considerable carbon saving - estimated savings of CO2 is around 200,000 tonnes per annum. The new technology will enable to attain EU standards and is part of a road map of attaining EU standards by AMZ.

The JV power plant will implement ArcelorMittal corporate standards in terms of Environment, Health, Safety and Labour requirements. The ESDD confirmed that these are fully aligned with the Banks’ PRs and the Company has the institutional capacity to fully implement corporate standards as well as the Banks PR’s.

An Environmental and Social Action Plan (ESAP) has been developed for the Project, and includes a number of corporate commitments associated with AMZ. The Bank will monitor the implementation of the Project.

Non-Technical Summary (NTS): English | Bosnian

Technical Cooperation

None.

Client Company Contact Information

Name: Nikhil Mehta
Email: Nikhil.Mehta@arcelormittal.com
www.arcelormittal.com

 

Business opportunities

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