Kurum International SH.A.

active

Kurum Holding AS is a Turkish company operating in the iron and steel industry. KI (the ‘Company’) was established in 1999 to sign a concession agreement with the GoA to operate Elbasan Steel Production Facility in Albania. KI is the largest group company of Kurum Group in terms of production capacity and employment and one of the largest industrial companies in Albania. KI operates one steel mill with 510,000 tpa production capacity as the first and only operator of an integrated single iron and steel production plant in the country. The Company is also a major source of employment with more than 680 staff. KI approached IFC for an A loan for financing of privatization and rehabilitation (the ‘Project’) of four hydroelectric power plants (HEPPs) - Uleza and Shkopeti on Mat River in the northern part of the country and Bistrica 1 and 2 on Bistrica River in the far south of Albania, with a combined installed capacity of 76.5 MW. The HEPPs have historically been operated as peaking plants, i.e. power plants that are run only when there is high (‘peak’) demand. KI intends to use them as baseload plants in future, i.e. power plants that will run continuously to provide a steady source of power for industrial operations.Uleza, commissioned in 1957, has an installed capacity of 25 MW and a relatively large reservoir volume (240 hm3); Shkopeti, commissioned in 1963, has an installed capacity of 24 MW and a 40 hm3 reservoir that reaches to the tailrace of Uleza and serves as a buffer to the flow from Uleza; Bistrica 1 and 2, commissioned in 1965/66 respectively and with installed capacities of 25.5 and 5 MW respectively, are both powered by a single 540,000 m3 reservoir. GoA will retain ownership of the reservoirs. Currently, the HEPPs are operated by two energy companies held by Ministry of Economy Trade and Energy (“METE”) of Albania. Kurum Holding envisages acquiring these companies by its group company, Kurum International and integrating them into KI’s management structure.Prior to KI’s involvement, the four HEPPs were tendered for privatization by the Government of Albania (GoA) in 2012, a process led by an IFC Advisory Services unit appointed by GoA as Lead Advisor. During preparation for tendering, E&S due diligence on the HEPPs was undertaken on behalf of GoA by an independent consultant based on IFC Performance Standards and World Bank Group (WBG) Environment, Health and Safety (EHS) Guidelines. Following discussion with GoA and potential bidders, E&S recommendations arising from this due diligence were incorporated into the SPA as binding commitments for the winning bidder (KI). These commitments are referred to throughout the ‘Description of Key Environmental & Social Issues and Mitigation’ section below.