The project sponsor is Kronospan Holdings Limited (Cyprus), which is the parent company for the Eastern European operations of the Kronospan Group (Kronospan or the Group). The borrowers are 100%-owned by Kronospan Russia Limited (Cyprus), the newly formed parent company for Russian operations of the Group. Kronospan is privately owned and is a European leader in wood panel board manufacturing.

The total project cost is estimated at Euro 180 million. The proposed IFC investment is a $50 million equivalent loan (in Euros) for IFC’s own account.

50.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
Equity

* These investment figures are indicative

The project facilities will be located at Egorievsk on a 132 hectare plot about 100 km south-east of Moscow in a recently established industrial zone. The site has good road and rail connections in vicinity and has access to electricity and natural gas.

Through Kronospan, the company will receive world-class technological and management know-how. The project will have proximity to low cost wood supplies and major markets. The project’s output will supply the local markets with high quality MDF, laminated flooring and other products. At present, qualities of products of the level to be produced by the project are only available through imports. A good-quality and affordable source of MDF should benefit the Russian furniture industry, which is characterized by a few small, low quality plants, and which are generally unable to invest much working capital in importing the required quality panels. Kronospan operating mills are designed and operated with clean production in mind. The project will have stronger environmental benchmarks and policies compared to most of existing state-owned or recently privatized facilities. The project will employ up to three hundred people. The mills will help local economy not only through employment but also through the consumption of privately contracted specialty services, operations and maintenance assistance, cleaning, marketing joint ventures etc. The presence of Kronospan, a large buyer, presents local companies with a unique opportunity to further develop their businesses in this key sector in the Russian Federation. IFC’s role in this project is many fold. IFC will provide the much needed long term funding which is currently not available in the Russian Federation. The proposed investment will have a significant contribution to furthering the development of Russian panel and furniture value chain. The current lack of quality MDF as well as surfacing solutions is a severe disadvantage to Russian furniture producers and consequently leads to high furniture and panel import levels as experienced in the past few years.

[to be updated after ERS is finalized]

This is a Category B project according to IFC''s Procedure for Environmental and Social Review of Projects, because a limited number of specific environmental and/or social impacts may result, which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.
Location of environmental documents in locally affected community
The environmental documents are available in the company's offices at the following address: OOO Kronospan Limited, Egorievskiy Raion, Pos, Noviy D. 21, RU-140341 Moscovskaja Oblast, Russian Federation, and the main office of the Ministry of the natural resources of the Moscow Region.