| Project Detail |
Project Description
The provision of a loan up to €116 million to Kronospan UA, Ukraine. The facility will consist of €75 million for the construction of an Oriented-Strand Board (OSB) plant in Novovolynsk, Ukraine and EUR 41 million for refinancing of the existing Companys balance sheet restructuring.
Kronospan UA is an existing client of the EBRD. The first loan to the borrower was provided in 2006.
Project Objectives
The Project assumes the construction of an Oriented-Strand Board (OSB) production facility to meet the growing demand for OSB products in Ukraine and in the export markets.
Kronospan will also invest into creation of cluster for furniture producers, a new transformer substation, bio-mass boiler and WESP filter at the site.
Transition Impact
Foreign direct investment: the project will be a combination of FDI equity investment and the Banks loan. There have been only marginal FDI inflows in wood processing sector and overall in Ukraine in recent years. Kronospan is bringing substantial new investment into the borrower, which will exceed annual volume of FDI in wood-processing sector in Ukraine over the last 3 years.
Kronospan seeks to minimise its negative environmental footprint recognising the impact of its wooden board production on air quality. As part of the Project, the Company will install additional Wet Electrostatic Precipitator (WESP) to reduce concentrations of dust and formaldehyde emissions for the OSB dryer. Additionally the Project includes the construction of own transformer substation, as well as a biomass boiler energy unit, to heat the OSB dryer and OSB press (via thermal oil), allowing for gas substitution. |
