St. Petersburg, June 3, 2021 — At SPIEF, Gazprombank concluded a cooperation agreement on the construction of a manufacturing complex at the industrial sites of SC Shchekinoazot to produce concentrated low-methanol formalin.
Industrial formalin is irreplaceable in medicine, agriculture, textile fabrication and paper manufacturing. It is also used in the chemical industry, metallurgy and the oil industry. The enterprise’s capacity is 110,000 tons per year. In the future, plans call for organizing the processing of raw materials with conversion into urea-formaldehyde and urea-melamine formaldehyde resins. These products are widely used in construction and wood processing (in particular, in the production of chip boards, fiberboards, and plywood).
Moreover, the document envisions the parties’ cooperation in the construction of an enterprise for the manufacture of spunbond nonwoven fabric to be used for medical purposes using melt blown technology. This project is aimed at meeting the demand of manufacturers for hygienic and medical goods, as well as protective clothing, against the backdrop of the persistent risk of infectious COVID-19 spread.
The cumulative budget of the two projects is roughly RUB 4.4 bln, while Gazprombank’s lending could provide up to 80% of all investments. The term of the potential loan is up to 10 years. The projects will be implemented in accordance with the ESG framework using the mechanisms of project financing.
Yet another framework agreement signed by the parties concerns ESG lending in general. According to the deal, the Bank’s specialists will provide the necessary advisory support to introduce the ESG framework into Shchekinoazot’s operations.
ESG business activities make it possible to significantly reduce environmental, social and managerial risks. Under ESG lending, the terms of financing depend on how the company delivers on certain metrics. This approach will allow the borrower to secure more favorable terms of financing, thereby making a meaningful contribution to the introduction of sustainable development principles.
“It’s becoming increasingly important to follow sustainable development principles at the social, national and corporate levels. Engaging our clients and partners in the process of ESG transformation is one of the priority objectives of the Bank’s business strategy. We intend to enable the development of companies that introduce best practices in the field of environmental and social protection by providing more favorable financing terms,” noted Alexey Belous, Deputy Chairman of Gazprombank’s Management Board.
Gazprombank is one of Shchekinoazot’s key financial partners. Currently, the parties are successfully implementing projects involving the construction of units for methanol production with a capacity of 500,000 tons per year; units for the production of nitric acid and ammonia nitrate with capacities of 270,000 and 340,000 tons per year respectively, as well as a unit for ammonia and carbamide production with capacities of 525,000 and 700,000 tons per year, respectively. As concerns completed projects, they include a plant for the production of sulfuric acid with a capacity of 200,000 tons per year, and units for the production of methanol and ammonia with capacities of 450,000 and 135,000 tons per year, respectively.