Alkaloid-AD

complete

The project involves the upgrading and modernisation of Alkaloid's pharmaceutical production facilities in Skopje, FYR Macedonia, through the establishment of new drug manufacturing facilities with good manufacturing practice (GMP) certification The objective of the project is to assist Alkaloid in obtaining GMP certification, a pre-requisite for sales in Western countries. This project will be the second private sector industrial project to be financed by the EBRD in FYR Macedonia, and the first of a 100 per cent locally owned and managed company. The project will have a strong demonstration effect resulting from the restructuring and upgrading to Western standards of a very well-known local company and will promote the development of the local private sector. In addition, environmental management programmes will be introduced to bring the company in line with EU standards. Finally, this project will support the integration of the Macedonian private sector into the international economy. This is especially significant in light of the impact that the Kosovo crisis is having on manufacturing companies in FYR Macedonia. Alkaloid-A.D.-Skopje is a joint-stock company based in Skopje, manufacturing pharmaceuticals, chemicals, cosmetics, coatings and food products. A senior loan with a convertibility option of EUR 8.7 million with an eight-and-a-half year tenor inclusive of a two-and-a-half year grace period. The International Finance Corporation is to provide a EUR 8.7 million senior loan with a convertibility option on terms similar to those of the EBRD. EUR 35.4 million The project has been screened as B/1 by the Bank’s Environmental Appraisal Unit, requiring an environmental analysis of the new project and an environmental audit of the existing facilities. Environmental due diligence was undertaken by international environmental consultants. Areas of particular concern include waste-water treatment, waste management and storage, air emissions and soil and groundwater contamination. The results of the audits and assessments along with discussions with the local regulatory authorities and review of existing data indicate that Alkaloid is currently in compliance with Macedonian legislation. The upgrades planned in the pharmaceutical and coating manufacturing facilities will significantly improve Alkaloid's progress towards EU and IFC/World Bank standards, which it will achieve within a three-year programme. The programme is set out in a detailed Environmental Action Plan (EAP), which includes modifications to existing equipment and installation of new equipment. These upgrades include the implementation of a company-wide air emission-monitoring programme, waste-water monitoring, upgrade of storage facilities, removal of underground storage tanks, and review and upgrade of the company’s worker health and safety programme. Costs of implementing the EAP are estimated at DM 13 million. Implementation of the final EAP will form a covenant of the loan agreement. None