SHCHEKINOAZOT AND GAZPROMBANK AGREE TO IMPLEMENT INVESTMENT PROGRAMME BASED ON ESG LENDING PRINCIPLES[03.06.2021]
On 3 June, at SPIEF 2021, Shchekinoazot entered into an agreement to finance the construction of a production facility for concentrated low-methanol formalin at the company's industrial site.
The agreement was signed by Boris Sokol, Chairman of the Board of Directors (President) of Shchekinoazot, and Aleksey Belous, Deputy Chairman of the Management Board of Bank GPB JSC.
Technical formalin is an indispensable product for medicine, agriculture, textile and paper production. It is also used in the chemical, metallurgical and petroleum industries. The capacity of the plant is to amount to 110,000 tonnes per year. In the future, the raw material will be further processed into urea-formaldehyde and urea-methylamine-formaldehyde resins. These products are widely used in construction and wood processing (production of chipboard, fibreboard and plywood).
The document also stipulates financing for the construction of a non-woven spunbond production facility with the possibility of manufacturing material for medical purposes utilising Meltblown technology. This project aims to meet the demand from manufacturers of hygienic and medical products as well as protective clothing in the context of the risks the coronavirus infection entails.
The combined budget of the two projects is about RUB 4.4 bn, and a loan from Gazprombank may cover up to 80% of the investment. The term of the loan is up to 10 years. The deal was concluded using a project financing mechanism. The projects will be implemented in compliance with ESG principles.
Another framework agreement signed by the parties concerns ESG lending in general. In accordance with it, the Bank's specialists will provide advisory assistance in introducing Environmental, Social, Governance standards into Shchekinoazot's operations.
The implementation of ESG-oriented business activities can significantly reduce environmental, social and governance risks. In ESG lending, the terms of financing depend on the borrowing company meeting certain metrics. This approach enables the borrower to obtain more favourable financing terms, contributing to the implementation of sustainable development principles.
'Following the sustainable development principles is getting increasingly important at the societal, governmental and corporate levels. Involving our clients and partners in ESG transformation processes is one of the priorities of the Bank's business strategy. We intend to promote the development of companies that implement the best environmental and social practices by providing more favourable financing terms,' Deputy Chairman of the Management Board of Gazprombank Aleksey Belous said.
'These days, we focus on economic development, based on ESG principles. Businesses become even more responsible, while the world becomes greener. At Shchekinoazot, we are not only changing our production processes and technologies, but we are also rethinking the approaches to the established work organisation, corporate culture and management practices. Our increasing production capacity and the idea of global well-being drove us to allocate more funds every year in environmental programmes, projects to preserve nature, ensuring industrial safety, combating climate risks and taking care of human beings. Shchekinoazot only uses the latest technology. We are modernising our existing production facilities. Each of our projects undergoes strict governmental environmental impact assessments. We have been progressively introducing alternative energy options for our production units. Today, by concluding an agreement with Gazprombank, our ever-reliable partner, we have taken another step towards industrial progress, economic development and well-being of the society,' stressed Boris Sokol, President of Shchekinoazot.
Gazprombank is one of Shchekinoazot's key financial partners. The parties are successfully implementing projects to construct production units for methanol with a yearly capacity of 500,000 tonnes; for nitric acid and ammonium nitrate with a yearly capacity of 270,000 and 340,000 tonnes respectively; ammonia and urea with a yearly capacity of 525,000 and 700,000 tonnes respectively. Projects already implemented include production units for sulphuric acid with a yearly capacity of 200,000 tonnes; methanol and ammonia with a yearly capacity of 450,000 and 135,000 tonnes, respectively.
Shchekinoazot is a modern, dynamically growing company, and an active participant in the implementation of industrial development programmes in the Tula Region and all of Russia. The effective management techniques the company puts to use are highly appreciated by customers, partners and investors alike. The top brass of Shchekinoazot ranks among the TOP 200 best management teams in Russia.
The Company has become one of the leaders in industrial chemistry, producing methanol, caprolactam, cyclohexane, urea-formaldehyde concentrate, highly concentrated low-methanol formalin, phenol-formaldehyde resins, sulphuric acid, liquid technical ammonia, ammonium sulphate, oxygen, liquid carbon dioxide, carbon dioxide for food, dry ice, spunbond-type non-woven thermally bonded fabrics, recycled polypropylene, ion-exchange membranes, consumer goods (household chemicals and linoleum), and chemical equipment (the Company manufactures proprietary electrodialysis units).
Shchekinoazot is one of the largest exporters to Western and Eastern Europe, the CIS, Asia, the USA and Latin America.
Over the past 16 years, the company has implemented 16 major investment projects with a total investment of USD 1 bn. Until 2024, Shchekinoazot plans to invest a further USD 1 bn in production development. In 2021, Shchekinoazot will commission its third methanol unit with a yearly capacity of 500,000 tonnes. The company will become the leader in methanol production in Russia and Europe.
Gazprombank is one of the top three banks in Russia by key volume indicators (according to Interfax-100. Banks of Russia, www.finmarket.ru/database/rankings/), and one of the largest financial institutions in Central and Eastern Europe.
Gazprombank provides a wide range of services to corporate and private customers. The Bank serves key sectors of the Russian economy, including gas, oil, chemicals and petrochemicals, metallurgy, electric engineering, machine building, transport, construction, communications, agribusiness, trade and other industries. The Bank has many years of unique experience in arranging project financing, placing debt securities in the Russian and international capital markets, and providing financial advisory services in project, corporate and debt financing, as well as experience in managing investments in companies both in Russia and abroad.
Gazprombank's retail business is focused on providing state-of-the-art high-tech products and services. As of the beginning of 2021, the Bank serves around 5 mn retail customers; it has a retail loan portfolio of over RUB 660 bn and a retail deposit portfolio of RUB 770 bn by 2020.