Barlinek IV

cancelled

Provision of long-term financing of up to PLN 200 million to Barlinek Invest LLC, a subsidiary of Barlinek S.A., one of the leading multi-layer floorboards producers in Europe for the expansion of its production capacities in Ukraine and energy efficiency investments in Poland. The EBRD funding will be used to finance investments into the expansion of wooden multi-layer floorboard production capacities and resource efficiency impovements that will promote a low carbon economy. The main source of transition impact is expected to be derived from setting standards for corporate governance and business conduct in resource efficiency through Green Economy Transition (GET) investments as well as the demonstration of new replicable behaviour and activities to other market participants through the activation of a biomass-fuelled power plant. BARLINEK INVEST LLC Barlinek Invest is part of Barlinek SA - one of the largest manufacturers of wooden multi-layer floorboards in Europe, ultimately controlled by Michal Solowow. PLN 200,000,000.00 The Bank will arrange a PLN 200 million financing package, part of which may be syndicated to commercial banks. PLN 250,000,000.00 Category B. Environmental and social issues associated with the investment plants at the two existing facilities can be readily assessed and mitigated based on an Environmental and Social Due Diligence (ESDD). A fit for purpose in-house ESDD was undertaken of both the Polish and Ukrainian facilities, utilizing among others, the recent independent energy efficiency and FSC certification audits. The ESDD confirmed that the Company has a robust Environmental, Health and Safety (EHS) management system and institutional capacity to fully implement the Bank's Performance Requirements. Both facilities are in material compliance with National standards and best practices. The investment in Poland will allow for, among others, future compliance with more stringent future EU standards, including those resulting from the medium sized combustion plan directive. The Company applies EHS and FSC procedures at each facility and the current investment program should further improve energy efficiency and overall improve both operational and EHS performance. Based on the ESDD, the Company intends to further strengthen its Corporate Social Responsibility (CSR) systems and undertake additional Best Available Techniques (BAT) audits in the future. The energy efficiency investment in Poland (new power plant) and Ukraine (improved operations) have been judged as meeting the Bank's GET criteria. A summary of the investment programs is provided in the two Non-Technical Summaries (NTS) attached below: In terms of FSC, the Company has FSC certification for both the Polish and the Ukrainian plants to ensure adequate chain of custody management of production operations. Raw material (wood), for instance in Poland is obtained from State Forestry, which is subject to appropriate chain of custody procedures in line with FSC requirements. The situation is different in Ukrainian plant, where State Forest FSC certification is still limited and therefore the Company can only source part of its wood that is FSC certified in Ukraine. In order to address this, the Company intends to increase higher use of raw materials from sustainable resource in Ukraine, through for instance FSC certification. Together with the Bank the Company intends to support initiatives to increase use of FSC (or equivalent), possibly through Policy dialogue in Ukraine. Based on the ESDD and ESAP the Company intends to address the aforementioned issues with specific focus on implementation of the energy efficiency program, implementation of EHS and CSR standards as well as BAT assessment and working jointly to increase the take-up of FSC in Ukraine, possibly through Policy dialogue with the Competent Authorities. The Bank will monitor the implementation of the agreed ESAP. The company is eligible for GET TC funds for due diligence processes and FINTECC TC designed to incentivise the implementation of resource efficient and climate friendly technologies. Barlinek S.A. http://www.barlinek.com.pl/pl/ Al. Solidarnosci 347 - 36, 25-323 Kielce