ERCROS RDI AND MODERNIZATION

The project concerns investments in the areas of research and development (R&D), digitalisation, decarbonisation and modernisation of some key manufacturing production for the period 2021-2024.

These investments of the project will support the Promoter's new strategy to transform the company into a sustainable company. This strategy streamlines the investments into decarbonisation of its operations to combat climate change, diversification to sustain the downturn of economic cycles, and digitalisation to modernise and increase productivity.

The project supports the Bank's Innovation, Digital and Human Capital objectives. The project is expected to generate significant positive externalities through the creation of innovative processes and products and through skills development. The positive environmental externalities are expected to be in form of reduction of GHGs emission, reduction of energy and raw material consumption and pollution prevention in the promoter's manufacturing facilities. In addition, the investment in R&D component creates knowledge externalities through cooperation with public researchers, suppliers and customers. Moreover, the financing of this project addresses the market failure of imperfect competition as it helps a mid-sized company to gain and maintain its market share in domestic and international markets, thus increasing competition. The project generates a range of economic and social benefits. The investment supports the re-skilling and up-skilling of the workforce, the implementation of safer working conditions and it contributes to wider socio-economic effects such as the support of the EU chemical industry leadership and competitiveness and the support to long-term EU economic growth. The proposed loan complements other external funding and internal sources and strengthens the company's capital structure by providing favourable and customized terms. Moreover, the EIB will become a stable financier assuming a long-term commitment with the promoter, sending a positive signal towards the company's current and potential new financing partners.

One component of the project falls under Annex II of the EIA Directive 2014/52/EU amending the EIA Directive 2011/92/EU and hence requires either an environmental impact assessment (EIA) or a screening decision from the competent authorities. All components are expected to be complaint with best available techniques (BAT). The research, development and innovation (RDI) activities part of the project will be carried out in existing R&D facilities of the Promoter. RDI activities are not mentioned in the EIA Directive and therefore, the activities are not expected to require an EIA. It will be assessed during due diligence if any other component of the project requires an EIA or a screening decision in accordance with the directive. All environmental aspects will be appraised in detail during due diligence.

The Promoter has been assessed by the EIB as being a private company not subject to EU rules on public procurement or concessions. However, if at the project appraisal, the EIB were to conclude that the Promoter is subject to the EU public procurement legislation then the Bank would duly inform the Commission Services and would require the Promoter to apply those rules.