Project description
and objectives:
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The proposed project is an equity investment with Lafarge, in Ukraine, in a brownfield project to contribute to the financing of the construction, under a turnkey contract, and operation of a new dry process kiln. The investment programme will increase total production capacity from 1.4 to 2.2 mt of cement annually from 2011 and achieve significant energy consumption reduction per tonne. It will be coupled with a reduction or complete shut down of the existing wet lines capacity.
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Transition impact:
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The project supports Direct Foreign Investment in Ukraine and brings significant productivity improvements to the existing cement production process. Through increased capacity production, it will bring Lafarge’s operation in the country at a closer level to its main competitors in terms of market share thus contributing both to market expansion and greater competitiveness. The new technology is far more energy efficient than the existing one that is to be eventually either partly or fully discontinued. Lafarge’s high standards in environmental health and safety will be applied to the new project which will also require training in the new technology.
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The client:
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The beneficiary company is Mykolaiev Cement, which is 99.6% owned by Lafarge Ukraina.
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EBRD finance:
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Equity participation.
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Total project cost:
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Approximately EUR 250 million.
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Environmental impact:
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The project has been screened B/1, requiring an environmental audit of existing facilities as well as an environmental analysis of the planned investment programme.
The Bank is in the process of undertaking an environmental due diligence, inclusive of site visits and an independent audit by an international consultant.
Initial information shows that the project is structured in line with EU environmental standards, and the new dry cement plant is designed to comply with EU IPPC requirements for the cement and lime sector. The new dry cement line will be located 12 km from the existing plant and in the future will replace two of the wet lines at the existing plant. The location of the new dry cement plant at the existing limestone quarry will also reduce environmental and social impacts as it is not located near to residential areas.
The combined replacement of wet cement technology and use of state-of-the-art plant will result in a reduction of carbon emitted per ton of cement produced. The Company is in the process of obtaining relevant local permits for the new dry cement line, and this will be undertaken in line with National and international best practice requirements. Lafarge is member of the World Business Council for Sustainable Development (WBCSD) and the new project will be structured to meet relevant WBCSD guidelines as well as Bank requirements.
Part of the project significant investments will be made at the existing wet lines to reduce environmental emissions (notably dust) and improve net energy efficiency. This will include appropriate investments in new electrostatic precipitators as well as fuel handling. Minimal environmental performance requirements as well as a formal commitment to decommissioning two wet lines, once the new dry cement line is commissioned, will be included in an environmental and social action plan (ESAP) to be agreed between the Bank and the Sponsor upon completion of the due diligence.
The PSD will be updated once the due diligence is complete and the ESAP has been agreed.
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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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Stéphanie Tessier
E-mail: stephanie.tessier@lafarge.com
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EBRD contact:
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Paul-Henri Forestier, Operation Leader: forestip@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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