Danube

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The EBRD is providing financing of up to €35 million to Nectar d.o.o. (‘Nectar’), one of the leading juice and soft drinks producers in Western Balkans, which will be used for the acqusition of Fructal d.d., the number one producer of premium and mainstream branded juices and selected other foods and beverage products in Slovenia, with a presence in Bosnia and Herzegovina, Croatia, Former Yugoslav Republic of Macedonia, Kosovo and Serbia. The Project endorses the Company’s strategy of regional expansion in the Southeastern Europe and consolidation of the joint operations that are expected to generate operational synergies and improve performance of the joint operations. The Project will support the development of a local company and its operations in the region, primarily in the countries of former Yugoslavia, thus contributing to increased regional economic integration. The proposed transaction will demonstrate the successful restructuring of the two compatible regional companies in South-eastern Europe. The joint operations will benefit from realisation of regional synergies which will lead to increased profitability. In addition, the project will bring improvements in corporate governance and business standards. The transaction may also entail backward linkages by increasing and improving the suppliers’ base of farmers producing fruit, providing farmers with stable demand and financing which has positive impacts on efficiency of their operations and the quality of produce. The Bank will provide a senior long term loan of up to €35 million to Nectar. The project has been categorised B in accordance with the Bank’s 2008 Environmental and Social Policy. There may be some environmental and/or social (E&S) impacts and potential E&S risks associated with the acquisition of Fructal but these can be readily identified and addressed through mitigation measures. The Bank has an existing loan with Nectar which was signed in 2007 and is subject to the Bank’s 2003 Environmental Policy on which the Bank has been receiving Annual Environmental Reports from the Company. The environmental and social due diligence for the proposed project includes a management review of Nectar concentrating on the Bank’s Performance Requirements (PRs) relevant to the Company’s operations. Key issues include, inter alia, Nectar's management practices relating to human resources, occupational health and safety, pollution prevention and abatement, community health and safety, supply chain manaagement, and stakeholder engagement. The Bank will also conduct an E&S audit of the operations and facilities of Fructal once the acquisition process is complete. An Environmental and Social Action Plan (ESAP) will need to be developed and agreed with the Client to address the necessary corrective and mitigation measures for the Project to meet the Bank’s PRs. The ESAP will address issues for both Nectar, based on the management review, and for Fructal based on the findings of the E&S audit. Nectar will be required to provide an annual report on the implementation of the ESAP and on any other environmental and social issues arising during the year. None. Bojan Radun Nectar d.o.o. Tel: +381 21 7550 400 Email: bojan.radun@nectar.rs Website: www.nectar.rs