Transnafta

cancelled

Translated version of this PSD: Serbian The EBRD is considering providing a sovereign guaranteed loan of up to €5.7 million to Transnafta, a state-owned company in Serbia engaged in pipeline transportation and storage of crude oil, to finance the construction of two crude oil storage tanks. The storage tanks, each with a capacity of 20,000 m3, will be built within an existing oil storage depot owned by the Company, located in an industrial area of Novi Sad, in northern Serbia. The new capacities will be primarily used for storage of compulsory oil reserves of the Republic of Serbia and will be available to private sector as well. Setting higher standards of transparency, corporate governance and business and environmental conduct - the Project is designed to improve existing standards of the Company in terms of emission control (floating roof), leakage detection (SCADA system), fire safety, accidental overspill prevention and secondary containment of the tanks. The Company will adopt ISO 14001 and OHSAS 18001 environmental and occupational health and safety management procedures adequate for controlling the project in its construction and operation phases. The company will be also required to produce IFRS audited accounts and will adopt and apply public procurement procedures/practices in line with international best practices. The project will contribute to the structure and extent of the Serbian crude oil market. It will ensure clear, transparent and non-discriminatory third party access to the crude oil pipeline and to the existing and the new storage facilities. Public company Transnafta, engaged in pipeline transportation and storage of crude oil, owned 100 per cent by the Government of the Republic of Serbia. The EBRD is considering providing up to €5.7 million in a sovereign guaranteed loan to Transnafta. €5.7 million. Screening and rationale for classification The project has been Categorised B in accordance with the Bank’s Environmental and Social Policy (2008). Independent due diligence was commissioned by the Bank which confirmed that E&S impacts are site specific, readily identifiable and can be addressed through mitigation measures as stipulated in the project specific ESAP that has been agreed with the company. Information reviewed Due diligence was undertaken by an independent consultant and comprised interviews with company management, extensive document and policy / procedure review, meetings with local authorities, a visit to the project site and a visit to associated facilities. Environmental and Social issues Due diligence identified that the company is well managed and is certificated to international standards for environmental and H&S procedures at existing facilities that will be extended to the new project. The company does not have an existing procedure for assessing the likely E&S risks and impacts associated with acquisition and / or development of new facilities and the company has therefore agreed to develop such procedures. Project plans and permits are in line with Serbian and international standards and no significant modifications are required to meet ERBD requirements. Following the bombing of the adjoining refinery the area has been degraded by soil and groundwater contamination and the client has agreed to maintain a comprehensive monitoring programme with this regard. Summary of Environmental and Social Action Plan An ESAP has been prepared by an independent consultant and agreed with the company. ESAP items relate both to the operation of existing facilities and procedures involved in the selection of potential future operations. Key ESAP items include: Project Monitoring Project Monitoring will be undertaken in line with the timing stipulated in the ESAP. Monitoring will be undertaken on an annual basis through client self reporting and complemented by site visits, as required. None.