Horizon Pulp and Paper II

completed

2International Finance CorporationA Member of the World Bank GroupInternational Finance CorporationA Member of the World Bank GroupEnvironmental Review Summary (ERS)Project Name ESTONIA: Horizon Pulp and Paper 2Region Europe Sector Timber, Pulp and Paper Project No. 009193 1. This project includes the second phase of the rehabilitation and modernization of Horizon Pulp and Paper located in Kehra, Estonia, east of the capital of Tallinn. The plant produces sack paper, sacks and tissue paper. The first phase of this investment, approved in 1996, included improvements in wastewater handling and treatment facilities, fiber recovery and installation of a bark boiler to replace an older oil shale fired boiler. These modifications are completed or nearing completion. This second phase includes further improvement of the Kraft paper mill and tissue converting facility, along with introduction of a waste paper collection system in Estonia. Total project cost is estimated at US$27.7 million. Environmental improvement measures to be included in this second phase investment include further improvements to the recovery boilers, lime kiln installation and digester house upgrading to further improve emission quality and conserve water and energy.2. This is a category B project according to IFC''s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The environmental review of this project consisted of review of information submitted by the project sponsor and technical review and site visits by IFC’s Technical and Environment Department staff. Key environmental, occupational health and safety issues that were of potential concern in this project and which were reviewed during appraisal include:· forest management and harvesting practices and sustainability of forests and forest communities;· air, water and solid waste emissions and management;· handling of hazardous materials;· fire protection and emergency response; and· general worker health and safety.Information on how these issues have been addressed is provided in the following paragraphs.3. Estonia has developed a comprehensive framework for management of its forests. A National Forest Policy was passed in 1997, which recognizes the ecological values of the forests and encourages sustainable management and use of this resource. Application of both natural and artificial regeneration is resulting in a growing forest area and increasing wood production available for industrial use. The wood supply for Horizon Pulp and Paper is clearly being managed in a sustainable fashion.4. The company has made good progress in controlling air emissions and current releases are below or close to the limits specified in the World Bank Group guidelines and within Estonian government regulations. The planned upgrading of the recovery boiler and related measures will further contribute toward minimizing air emissions. One power boiler has already been converted to use natural gas, and the second boiler will also be converted. The sponsor will ensure that all emissions will meet World Bank Group guidelines.5. Wastewater is subject to treatment in an activated sludge treatment plant, which is working well and producing effluent which is well within world Bank Group guidelines. No significant impacts on the Jagala River are expected.6. Solid wastes are currently landfilled in a municipal facility near the plant. When the bark boiler comes on line, much of the bark and other waste currently going to the landfill will be burned in this facility, reducing the load on the landfill considerably. Installation of the lime kiln will also eliminate the disposal of lime sludge.7. Although this is an old plant, the buildings and equipment are generally well maintained and in good order. Housekeeping is good throughout the facilities. However, storage for chemicals, fuels and lubricants could be improved through provision of proper containment in many cases. Asbestos has been used in earlier years as insulation, and the company is aware of the dangers of this material and is taking appropriate action to replace it with suitable material.8. Fire protection facilities, including fire extinguishers and hydrants, are lacking or in poor condition in many areas throughout the older parts of the plant. As a condition of disbursement, the sponsor will undertake a review of fire protection needs and will develop a plan for installation of needed equipment as part of this project.9. Occupational health and safety conditions are generally good. The company will undertake noise monitoring in the workplace and will ensure that workers wear appropriate hearing protection around noisy equipment. The company has both environmental and health and safety departments to handle compliance in these areas, and appropriate training programs are provided.10. IFC will monitor ongoing compliance with World Bank environmental, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by the sponsor and by conducting periodic supervision.11. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that this proposed project will meet World Bank environmental, health and safety policies and guidelines and host country requirements.\\StreetTalk\Shared Data@CTENET@IFC\wpeu\Mainstream Projects\Estonia\Horizon ll - 9193 ers.docOctober 7, 1998 5:09 PM