AVELLUM acted as the Ukrainian legal counsel to the European Bank for Reconstruction and Development (“EBRD”) in connection with a senior secured loan of up to EUR10 million (with an option to incease the loan up to EUR25 million) to Private Joint-Stock Company “Kyiv Cardboard and Paper Mill” (“KCPM”).
The loan will be partially financed by the Global Environment Facility and will be used by KCPM to boost energy efficiency and reduce CO2 emissions (“Project”).
The Project will be one of the first project financing deals to comply with the Industrial Emissions Directive 2010/75/EU (Integrated Pollution Prevention and Control). It will essentially create the first production cycle in the country that implements the EU principles of using fewer resources and increases energy efficiency. Overall, the Project will reduce KCMP’s annual CO2e emissions by up to 11,000 tonnes.
AVELLUM’s senior partner, Glib Bondar noted the following: “We are delighted to support our long-standing client, EBRD, on this interesting and challenging transaction, which combines the elements of both project finance and energy efficiency finance”.
KCPM is one of the biggest enterprises in Europe on cardboard and paper production, is part of the Austrian Pulp Mill Holding. In terms of total output, the facility is responsible for approximately 30% of all paper products manufacturing in Ukraine. About 700 Ukrainian companies and a series of Commonwealth of Independent States countries buy KCPM products annually.
EBRD is the largest international financial investor in Ukraine. Since the start of its operations in the country in 1993, the Bank has made a cumulative commitment of almost EUR12.1 billion across some 400 projects in Ukraine.
The AVELLUM team was led by senior partner Glib Bondar, with support from counsel Maria Tsabal and associates Orest Franchuk and Anna Mykhalova.