Financed ProjectsKCM S.A.

Identification Code:

OP/99/0002

Total Operation Cost:

75.041.000

Maturity:

74 months

Operation Status:

Description and Purpose of the Operation:

This operation is to provide financing to the Kombinat za Czvetni Metali S.A. (KCM) zinc- lead smelter in Plovdiv for specific elements of an ongoing environmental improvements programme, without which, due to widespread contamination, the facility may be restricted or even terminated. This may cause major problems to the area, as KCM is the largest employer and revenue generator. BSTDB involvement is to finance installation of a central wastewater treatment plant, installation of closed cooling water cycles in the lead plant, modernization of the zinc cake filtering department, expansion of the zinc cake filtering department.

Countries of Operation:

Bulgaria (100,00 %)

Financial Product:

Loans

Sector:

Materials

Domain:

Private

Borrower/Client:

KCM S.A. is a Joint Stock Company established in 1961. The company produces high quality products, recognized internationally. In 1999 KCM adopted ISO 9002 - an international model of quality control, as well as it was included by the London Bullion Market Association (LBMA) to its Good Delivery List for Silver.

Co-Financiers/Participants:

Japan Bank for International Cooperation, Marubeni Corporation

Guarantors/Sponsors:

Developmental and Regional Cooperation Impact:

The KCM environmental improvements programme will meet the objectives of reducing emissions and discharges and bring the facility into compliance through the proposed EAP. The project is consistent with BSTDB environmental policy and, through its environmental nature, will promote the environmental technology and operations of the facility. It has strong potential for facilitating mobilization of domestic and foreign capital, it is viable and operationally sustainable, and it is environmentally acceptable, and serves to improve environmental performance. The main objective is to bring the facility into environmental compliance and thus preventing production restrictions or shut-downs. Other benefits from the project will be modernization of the basic production units to a level consistent with the world-wide zinc and lead industry, increased levels of workers’ health and safety, potential production increases from eliminating the environmental constraints and subsequent increase of revenues.

Environmental Classification and Impact (summary):

According to the BSTDB Screening categories, the project was designated as "A1", requiring a full Environmental Impact Assessment and an Environmental Audit. The EIA was completed in accordance with BSTDB requirements and approved by the Bulgarian authorities. The key EH&S issues identified were air emissions and effluent discharges which were thoroughly considered in the Environmental Action Plan. Thus, the plan provides for modernization of the Plant’s WWTP, use of the Closed Cooling Water Cycles at the Lead Plant, modernization of the Zinc Tank House and its expansion, improvement of the clinker waste disposal practice, as well as issues related to general worker’s health and safety.

Operation Leader:

General Industries, Transport, Tourism 2

E-mail:

gitt2@bstdb.org