Project description
and objectives:
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The EBRD loan will partly fund the Company’s ongoing programme of
reconstruction, construction and acquisition of petrol stations providing high
levels of quality and service and meeting the highest environmental, health
and safety standards. In addition, EBRD involvement will support strategic
goals of the Company such as:
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Development of an in-house trading unit to diversify and maintain independence
of supply
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Expand the LPG market
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Emphasise sales of non-petroleum products (motoring, grocery and convenience
items)
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Develop the OKKO brand
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Promote transparent corporate management practices and Code of Conduct
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Build an effective, professional Ukrainian team able to attain these strategic
goals
Use of EBRD proceeds by the Company will be monitored by the Bank and its
independent engineer along with the representatives of the IFC and BSTDB which
have independently extended related loans to the Company.
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Transition impact:
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The proposed project supports an effective independent player committed to the
highest standards of corporate governance and environmental protection. The
project will increase private sector competition and will be the first example
of transforming a former state merchandising apparatus in Ukraine.
While physical expansion is a necessary element of growth, the current
financing is specifically conditioned on maintaining the Company’s focus on
environmental renovation, good accounting systems for transparency, and proper
working capital provision for financial stability. Specific undertakings will
be to diversify supply and to make provision for independent board
representation. Among the ancillary benefits will be demonstration of the
viability of a high quality/service niche player, and increased local
participation and development of local management.
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The client:
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OJSC Galnaftogaz (GNG or the Company), is the largest independent (not tied to
a refinery) owner/operator of petrol stations in the Ukraine. Headquartered in
Lviv, the Company was formed in 2001 from the merger and privatisation of
three, former Soviet, West Ukrainian oil product manufacturing and
distribution companies (“naftoprodukt”) dating back to the 1930’s. The Company
has most of its petrol stations in Western Ukraine but is building a presence
in the Kiev area and elsewhere under its popular “OKKO” brand.
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EBRD finance:
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USD 25 million Senior Secured Loan.
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Total project cost:
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The EBRD loan is part of ongoing expansion which will be reviewed from time to
time based upon results and further resources available.
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Environmental impact:
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The project was screened B/1.
Independent environmental investigations including a site visit by the Bank’s
Environmental Specialist confirmed that, as a result of control, preventive
and mitigation measures applied, the environmental, health and safety issues
are unlikely to present significant impacts. The Bank's due diligence
confirmed that the Company adheres to high international standards and the
proposed transaction will result in further modernisation of the filling
stations in line with international good practice, including compliance with
the relevant EU Directives relating to fuel quality, vapour recovery,
recycling and energy efficiency.
The stations currently sell high quality and unleaded fuels which are not
common in the market particularly in Western Ukraine. There are a number of
improvements, which when implemented would further increase EHS performance.
These are included in an extensive environmental action plan (EAP) which has
already been developed. According to IFC the project also meets all applicable
World Bank/IFC environment and social policies on completion of the EAP.
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Technical
cooperation:
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None.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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c/o Paul Shapiro
Senior Banker, EBRD
E-mail: shapirop@ebrd.com
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EBRD contact:
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Matteo Colangeli, Operation Leader: colangem@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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