European Bank for Reconstruction and Development said it is considering the provision of a long-term loan of up to EUR 4.5 million to Paloma DD for energy and resource efficiency investments as well as working capital needs. The investment will support a balance sheet restructuring, improve resource efficiency at the tissue producer and facilitate its privatization. The project has passed final review and is pending board approval with September 2 as the target date.
Paloma is a Slovenian integrated hygiene and tissue paper producer with 2014 revenue of EUR 87 million and EBITDA (earnings before interest, taxes, depreciation and amortization) of EUR 6.7 million. Paloma has four paper machines with total paper production capacity of 72,000 tons and 28 converting lines with capacity of 93,000 tons, says the project summary document.
The endeavour is categorised B under the bank’s 2014 Environmental and Social Policy. The production of tissue paper and tissue converting is associated with limited adverse environmental and social impacts, which can be effectively mitigated with modern techniques, EBRD said. The proposed investments will improve energy and resource efficiency of selected parts of the production facility and have no significant environmental or social impact, according to the document.
The investments financed by the loan are aimed at further improving the tissue paper mill’s energy efficiency and environmental performance. The project will also allow for increasing the use of recycled paper as raw material and improve resource efficiency of the company and result in raw material cost savings, EBRD’s document adds. The tissue production will not be increased.