Uksnab

disbursing

The proposed project is an equity investment in Closed Joint Stock Company Uksnab. The investment will be executed in two subscriptions: Uksnab, a closed joint stock company located in Krasnoperekopsk, Crimea, is a competitive producer of commercial refrigeration equipment with a leading position in certain market segments. An equity investment of EUR 12.4 million to be executed in two subscriptions. EUR 17.9 million, of which EBRD financing represents 35%. Environmental classification and rationale The project was screened B/1, requiring an Environmental Audit and Environmental Analysis in line with the Bank’s Environmental Policy and Public Information Policy. The modernisation and expansion of an existing beer coolers assembly plant to a wider range of commercial refrigeration equipment is associated with a number of environmental issues, which can be readily identified, assessed and mitigated as part of an Environmental Analysis. An Environmental Audit of the existing facilities was undertaken to determine environmental risks and liabilities. Key environmental issues and mitigation Environmental issues associated with the manufacture of commercial refrigeration equipment are fairly specialized and consist of hand assembly of components, mainly manufactured externally. Some light manufacturing is undertaken on site and environmental issues are associated with mechanical tooling and assembly. This is associated with small use of oils, lubricants, degreasers as well as paints used for coating of products. The painting operations will fall under EU VOC requirements, and use of low emissions paint pistols is planned. A component of operations is the injection of the coolant itself (R-134a) and on site testing. These emissions, although small, are being quantified and plans exist to review current operations to reduce fugitive emissions. R134a is not a banned substance and still in commercial use. Plant operations also include the preparation of a polymer/foam and small quantities of hazardous chemicals are used on site. Plant operations are not associated with process effluents, nor with the generation of significant quantities of waste. However, some hazardous and non hazardous waste needs to be disposed in licensed landfills. At present this is not well organized, and much of the waste ends up in the municipal landfills. As part of the environmental action plan this will be addressed to reduce environmental and human risk. Contaminated land was not judged as a significant issue, although further investigations are planned. The local chemical works have a significant impact on the local environmental quality. This is a regional issue, beyond the scope of this specific project. Environmental opportunities The project will allow for some environmental improvements, and the management is tracking both domestic as well as international environmental legislation to ensure that products meet international standards. This includes the need to ensure RoSH and VOC Directive requirements are met. The project will allow for further expansion of the operations and incorporation of dedicated social amenities as well as strengthening overall corporate environmental, health and safety management. Summary of Environmental Action Plan The company will be required to adhere to Ukrainian and EU environmental, health and safety regulations and standards. All relevant permits will need to be obtained during the planned expansion period and prior to commissioning the new production lines. An Environmental Action Plan has been agreed with the Company, focusing on improving waste management operations, monitoring of emissions as well as ensuring all appropriate permits are in place. An environmental management system will be developed at the plant within the next 2 years. Disclosure of information and consultation In the context of the EBRD’s participation in the project, the Company has released locally a summary of relevant environmental issues associated with the project and summarise mitigation measures, action plans and other initiatives agreed. Monitoring and reporting The company will monitor the environmental impact of its operations in accordance with national law and regulations. The Bank will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing annual environmental reports prepared for the project covering: (i) ongoing performance of project-specific environmental, health and safety activities as reflected in the results of periodic and quantitative sampling and measuring programmes, and (ii) the status of implementation of environmental mitigation and improvement measures. The Bank’s representatives will also conduct periodic site supervision visits when deemed appropriate. If required, the Bank will carry out monitoring visits to the plant. None. Igor Burdylenko, General Director CJSC Uksnab 1A Severnaya Street Krasnoperekopsk 96000 Crimea Ukraine Tel: + 380 57 700 9031 Fax: +380 57 714-2909