INA: Rijeka Refinery Environmental Rehabilitation

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An EBRD loan will contribute to an implementation of programme of high priority capital expenditure related to INA's environmental performance. The programme intends to upgrade existing wastewater treatment, hazardous waste management and treatment facilities at the Company's refineries and, exploration and production division. As a result of the programme, INA would significantly reduce serious soil and water contamination in one of the most scenic parts of the Adriatic coast line and bring it closer into full compliance with EU environmental regulations. This project would facilitate the compliance of one of the major industries in Croatia with international environmental standards and would have a positive impact on Croatia’s move towards integration into the EU. The Bank’s involvement would also promote INA’s restructuring plan with a focus on profitability, sound corporate governance and privatisation. The borrower under the EBRD facility will be Industrija Nafte Zagreb d.d. (INA), the Croatian vertically integrated national oil and gas company. As one of the largest companies in Croatia, its turnover represents approximately 5 per cent of Croatia’s GDP. The ultimate beneficiary of the EBRD’s funds will be INA’s downstream subsidiary Rijeka refinery. The Republic of Croatia will guarantee the loan. A ten-year loan of up to €36 million to be repaid in equal semi-annual instalments. Up to €36 million. The Project was screened B/1 requiring an environmental audit of the facilities and an analysis of the modernisation programme. The Company also provided extensive information based on the Bank's Corporate Environmental Due Diligence Questionnaire. The remedial action plan is based on INA's own assesment and on the rehabilitation action programme for contaminated soil and groundwater carried out by independent environmental consultants. The independent experts identified active sources of hydrocarbon pollution being released to the subsurface soil and groundwater. To effectively address remediation, an extensive source control programme was proposed Bank's representatives have visited the facility to assess the extent of the contamination and the proposed remedial action and have reviewed INA's corporate environmental policy, procedures and performance. The project includes renewal of tank farms and pipelines; replacement of sewer systems, emission monitoring; waste treatment; construction of new landfill and modernisation of the existing one; reconstruction of waste water treatment plant and reduction of fugitive emissions. As a result of the remediation programme, INA will significantly reduce soil and water contamination to one of the most scenic parts of the Adriatic coastline and ensure full compliance with environmental standards of the European Union. Furthermore, the Project will address potential environmental liabilities that could adversely affect the privatisation process and the proposed environmental improvements will make INA more attractive for any future investor. Annual operational savings will amount to some USD 2.5 million. None.