The project sponsor, Sidenor (with 75% shareholding in Stomana), is based in Greece and is the largest long steel products manufacturer in the country. It operates two steel mini-mills in Greece and has holdings in several companies which manufacture and market a wide variety of steel products. Established in 1962, Sidenor has been continuously profitable without a single year of financial loss. Sidenor is listed on the Athens Stock Exchange.

The total project cost is estimated at about Euros 73.8 million. IFC is considering a financial package of approximately Euros 30 million comprised of: - an A Loan for IFC’s own account of about Euros 20 million, and, - an equity or quasi-equity investment of about Euros 10 million.

21.79 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	21.79
Equity

* These investment figures are indicative

The project will be implemented in Stomana’s existing production facilities, located in the industrial zone of the town of Pernik, Bulgaria. Pernik is situated about 30 kilometers southwest of Bulgaria’s capital, Sofia.

This is a category B project according to IFC’s Procedure for Environmental and Social Review of projects. This project involves several environmental upgrades and approximately € 13 million of the project’s total cost is related to environmental upgrades:

- slag cooling and crystallization;
- revamping the EAF off gas system;
- EAF energy reduction program;
- plate mill reheat furnace energy reduction;
- long products mill reheat furnace energy reduction;
- additional water treatment;
- further site cleanup of waste debris and slag and demolition of old buildings; and
- other environmentally related expenditures.

Since the 24 months that Sidenor has been operating the plant, the sponsor has made huge strides in their modernization and revamping of the entire operation. Employee morale is high, progress has been dramatic, and future plans are very ambitious.
Location of environmental documents in locally affected community
The ERS will be disclosed on Stomana’s factory gate in Pernik.

The project is expected to reduce costs and improve quality and competitiveness. It should result in more efficient use of raw material inputs and labor, and a better overall productivity, due to implementation of new, better technology, and improved management practices. Moreover, the project is expected to have a significant environmental impact as the sponsor is planning to invest about Euros 13 million in environmental improvements. The project will benefit from the management expertise of a strong sponsor, who has significant technological know-how for both investment and production. In addition, the sponsor will bring into the project advanced marketing and sales techniques and a proven quality control system. An important part of sponsor's support will be on-the job training provided by Sidenor, including employee training in Sidenor's plants in Greece. Last but not least, as Stomana is one of the largest employers in the town of Pernik, the successful turnaround of the mini mill is critical for Pernik’s community and its surroundings. IFC has a major role to play in this project by providing long term financing which is scarce in Bulgaria. IFC will play a critical developmental role by ensuring that the project meets World Bank environmental and safety guidelines and hence serve as a model in pollution and dust emission control in Bulgaria. IFC is also playing an important role in structuring the financial plan and bringing other lenders into the transaction while also helping sustain major productive asset and a key employer in the region.