The EBRD is considering a follow up investment to Natron Hayat, the only local pulp and paper mill in Bosnia and Herzegovina based in the town of Maglaj. The funding will allow the company to install a biomass cogeneration energy plant to utilize its wood waste.
This project represents the first biomass project to use internally generated wood waste and to be financed under the Western Balkans Sustainable Energy Direct Financing Facility. It supports the Bank’s commitment to diversification of the energy sector in Bosnia and Herzegovina and promotes using biomass as a renewable source of energy.
The major transition impact of the project will derive from the demonstration effect of successful operation of the private biomass plant. It has the potential to promote biomass projects as financially viable solutions within the industrial sector in Bosnia and Herzegovina and across Western Balkans.
Moreover, Natron Hayat will introduce best international practices in disposal of wood waste and energy use.
Environmental benefits of the project will also include an estimated decrease in greenhouse gas emissions up to 274,553 tonnes of CO2 a year.
Natron Hayat, a limited liability company incorporated in Bosnia and Herzegovina, is owned by Kastamonu Entegre and Hayat Kimya, representing leading wood-based, tissue and chemical producers in Turkey.
The Bank financing will consist of senior debt of up to EUR 10 million
EUR 11 million.
The project is categorised B in accordance with EBRD’s 2008 Environmental and Social Policy.
Natron Hayat is the Bank's existing client through two previous loans and has been subject of thorough environmental, social and technical due diligence and monitoring. The Bank’s monitoring has shown the company’s overall performance has been satisfactory to date, with a substantial positive environmental and social impact/change.
The proposed biomass cogeneration energy plant investment was initially identified as part of environmental and social due diligence and monitoring.
Utilizing wood waste is a part of the current Environmental and Social Action Plan agreed between the Bank and the company. To help meet this commitment an Energy efficiency and climate change consultant funded through technical cooperation has assisted the company to develop a project that would enable the Natron Hayat to transform bark, saw dust and other by-products from the round wood used for pulp manufacturing into biomass.
Environmental and social due diligence by an independent consultant quantified the environmental and economic benefits as substantial. Currently, approximately 70% of the pulp mill’s wood supply is certified by the Forest Stewardship Council (FSC). The Company is in the process of obtaining FSC Chain-of-Custody and Controlled Wood certifications for its wood supply management system.
The company will benefit from two technical cooperation projects to optimise its energy generation and consumption by substituting fossil fuels with biomass based energy, and to bring its health and safety management to the EU standards and best international industry practices.
Mr. Taneja Avinash
Phone: +387 32 603 142
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