The Nordic Investment Bank (NIB) has extended a US$40mn loan to the Industrial Union of Donbass (ISD) to help ensure its Alchevsk steelworks in Ukraine become self sufficient in electricity supply, and reduce its polluting emissions. The facility carries a seven-year maturity. NIB is financing the installation of a combined cycle gas turbine for a cogeneration power plant at the steelworks in eastern Ukraine. This will be a third gas turbine at the steelwork’s cogeneration facility with a total capacity of 450MW.
The steelworks is currently being modernised with the aim of increasing its output capacity more than two-fold. But, the cogeneration power plant using waste gases from the steel production will cut levels of greenhouse gas emissions by 3.5mn tonnes per year, an amount comparable to the annual emissions of a large European industrial city.
"This project will introduce best international standards of environmental management at the Alchevsk steelworks, which will have a positive impact on the environment in a large industrial region of eastern Ukraine. We hope that this successful modernisation project at Alchevsk will become a pattern other industrial producers in Eastern Europe would follow," comments Tore Emanuelsson, senior manager of Lending at NIB.
NIB is a multilateral financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden.
In June, the IFC raised a dual tranche facility in support of the modernisation of the Alchevsk steel works. The facility consisted of two loans, with the A tranche of US$100mn provided by the IFC. The remaining US$250mn B tranche was arranged by co-ordinating mandated lead arrangers and bookrunners Société Générale and ABN Amro, and syndicated out to the commercial market. This facility was also raised to support the modernisation of Dneprovsky Iron and Steel plant.
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