Financed ProjectsPetrom Environmental Loan

Identification Code:

OP/09/0736

Total Operation Cost:

300.000.000

Maturity:

79 months

Operation Status:

Description and Purpose of the Operation:

BSTDB participates in a corporate loan to Petrom S.A aiming at financing the company's environmental investment program, which includes several projects for pollution clean-up, pipeline replacement, health and safety measures that lead to increased energy efficiency. In addition, the project will finance implementation of two programmes at a corporate level: development of a Road Safety Programme applicable throughout the company and a Geographic Information System, which will allow rapid coordinated response to possible accidents or incidents thereby minimising possible impacts on health and safety and the environment.

Countries of Operation:

Romania (100,00 %)

Financial Product:

Loans

Sector:

Energy

Domain:

Private

Borrower/Client:

Petrom S.A

Co-Financiers/Participants:

EBRD, Group of commercial banks

Guarantors/Sponsors:

OMV

Developmental and Regional Cooperation Impact:

The operation represents mobilization of international financial resources for the Black Sea region. The operation will play an important role in the improvement of the efficiency of the Romanian oil and gas sector via the provisioning of financing to the largest oil and gas market player in Romania. The development impact results from the strengthening of the environmental capacity of Petrom. The operation will also have substantial demonstration effect for the other oil&gas industry players and will contribute towards restoring foreign investors' confidence towards the country and Petrom in the current complicated global macroeconomic environment.

Environmental Classification and Impact (summary):

According to the BSTDB's Environmental Policy the Operation was screened as B, meaning that a full environmental assessment was necessary in order to identify and assess all the Environmental, Health & Safety (EH&S) risks and impacts associated with this transaction. The environmental assessment reviewed Petrom's general EH&S performance and its environmental investment plan, as well as the existing corporate environmental and social capabilities of the company, as well as the environmental and corporate procedures currently implemented. It concludes that Petrom has a viable environmental and social program, which includes a procedures to identify and implement EU environmental standards, and the sub-projects proposed by Petrom for funding under this framework are legitimate environmental investments, which implemented will result in significant environmental benefits. An Environmental and Social Action Plan (ESAP) was prepared for this operation and it was discussed/agreed with the client. The plan was developed to address the conclusions and recommendations resulting from the environmental assessment exercise. Thus, it is proposed that internal EH&S compliance auditing be carried out more frequently and efficiently at the corporate level. Other proposed actions include e.g. remediation of legacy wastes, upgrades of waste water treatment plant to expedite compliance schedule for EU discharge limits, rationalisation of field production facilities thereby returning land back to original use, lowering the number of in field flow lines and associated leaks and implementation of a road safety program to minimise the number of traffic accidents by Petrom employees and vehicles, which altogether upon implementation will result in significant positive EH&S impacts.

Operation Leader:

Energy & Infrastructure

E-mail:

ei@bstdb.org