Obolon III

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The EBRD is considering providing a senior loan of $50 million to support CJSC Obolon, a leading Ukrainian beer and beverages producer, in restructuring its balance sheet and funding energy efficiency improvements. The proposed project will help the company restructure its balance sheet and make improvements in the company’s practices from energy efficiency point of view. The Bank’s long-tenured loan will help the Company to put its operations on a more stable footing and provide room for growth. The energy savings as a result of the energy efficiency investment programme will be achieved mainly through modernisation of boiler house, upgrade of electricity distribution system and optimisation of production processes. Obolon CJSC (the “Company” or “Obolon”) is a leading Ukrainian company in the beer and soft drinks sector with annual 2008 production volume of around 113 million dekalitres of beer and an estimated 30 per cent of market share in 2008. Up to $ 50 million secured loan to Obolon comprising partial refinancing of short-term debt and energy efficiency component. $ 50 million. 1. Screening categories and rationale for classification This project was categorised "B" indicating that, where there are environmental and social impacts associated with the project, these are likely to be site-specific and easily addressed through mitigation measures. 2. Information reviewed The Bank has provided finance to the Company before and, in the context of that operation, detailed environmental due diligence was undertaken and an environmental action plan agreed. Actions under the agreed environmental action plan ("EAP") were all completed by the Company to the satisfaction of the Bank. The previous reports and EAP were reviewed as part of the due diligence on this new operation. Given the age of those reports, and the fact that a revised policy has since been adopted by the Bank, a second due diligence report was commissioned by the Bank which has resulted in a new environmental and social action plan addressing key issues under the EBRD Environmental Policy 2008. 3. Environmental and Social issues 4. Summary of Environmental and Social Action Plan None. Olena Peresada Deputy Director for Economics and Finance Tel: +38044 426 7432 E-mail: Helena@kiev.obolon.ua