Imavere Sawmill Expansion II

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Loan to A.S. Imavere Saeveski to allow the company to increase the capacity of its second sawmill line and to install a new fully computerised wood component line. This loan was Board Approved in 1999. On 11 February 2002, the EBRD approved a new operation to finance further investments into computerised technology and support the capital structure of the company. The principal objectives of the project are to: The project will contribute to the transition process by: A.S. Imavere Saeveski (IS) is a joint-stock company incorporated under the laws of Estonia. It is the largest and one of the most modern sawmills in Estonia. Corporate loan of DM 10.0 million (€5.1 million) Corporate loan of €7.0 million (new loan) DM 14.4 million (€7.4 million) €12.3 million (new project) This operation was screened B/1, requiring an environmental analysis and environmental audit. The combined environmental analysis and audit conducted on Imavere Sawmill in 1997 was updated in October 1999. The due diligence revealed that the company complies with Estonian health, safety and environmental regulations and standards, with one minor exception in the area of worker safety training which is currently being addressed by the company. The company also continues to comply with applicable EU and World Bank environmental standards. Considerable progress has been made in implementing the Environmental Action Plan prepared in 1997 to meet ISO 9002 standards. The company has also introduced a new dust removal system, installed a sprinkler system in the old sawmill, and taken noise and vibration abatement measures. The additional loan will allow Imavere to cease the use of wood preservatives, further improve its energy efficiency, and continue its progress to obtain ISO certification. Most of the wood is currently sourced in Estonia, where the volume of logging activity remains below the projected sustainable annual log harvest. Until the company has been granted Forest Stewardship Council's certificate, it will be required to use its best efforts to ensure that (i) the wood is not sourced from old growth forests or areas protected under national law or international conventions, and (ii) is supplied from sustainably managed forests, i.e. those that are, at a minimum, in compliance with all applicable regulations, standards and licences on forest management and logging in the country of origin. In 1998, a national working group including representatives from a wide range of economic, environmental and social interest groups was set up to develop, for Estonia, a voluntary certification system for sustainable forest management in accordance with internationally accepted standards. Once introduced, such certification can provide an effective tool for wood buyers who wish to assure themselves of the sustainability of their supplies. None.