EBRD, ICF-Debt Pool and Cordiant support refinery modernisation of INA in Croatia

€210million loan to INA-Industrija nafte, d.d.

Author(s): Ina Coretchi
Date: 08 September 2010

The EBRD is raising standards in the Croatian oil sector with a €150 million loan to support INA`s refinery modernization and energy efficiency improvement programmes. The project is co-financed by €50 million from the ICF-Debt Pool and €10 million from Cordiant Capital Fund.

The project helps INA to complete the first phase refinery modernisation programme which will enable the company to produce oil products that meet EU quality standards, facilitating company’s access to the EU market. Improving energy efficiency of the refining business through the implementation of best available practices is an important component of the modernisation programme.

The investment will help INA to cut its production costs, raise its operational efficiency and boost company’s competitiveness in the European market.

“This is the EBRD’s largest financing in Croatia to date. The project will support INA’s long-term sustainable growth and transformation into a leading south-east European oil and gas player and it will significantly raise the standards in the oil refinery sector in Croatia and in the neighbouring countries”, said Kevin Bortz, EBRD Director for Natural Resources.

“With the support of the EBRD, INA will have invested almost four billion HRK in the modernization programme during the strategic partnership with MOL. As a result of such an unprecedented effort INA`s refining system will have top notch equipment set up that will enable us to produce products of the highest European standards (Euro V) while also placing ourselves clearly ahead of our key regional competitors.” – said Mr. Zoltan Áldott, president of the Management Board of INA.

Andrew Bainbridge, Chairman of the Board of Directors of the ICF-Debt Pool added: “The loan will contribute to the upgrade of the refinery’s infrastructure and more generally support the development of Croatia’s energy infrastructure”.

The EBRD has a long standing relation with both INA and MOL. In 2001 the Bank provided a €36 million loan to upgrade the waste management system at INA’s Rijeka refinery. In addition, since 1995, the EBRD has provided four loans to MOL, totalling over €400 million, for the development of underground gas storage facilities and for environmental projects.

Since the beginning of its operations in Croatia, the EBRD has committed €2.2 billion in various sectors of the country’s economy, mobilising additional investments worth €3 billion from other sources.

The ICF-Debt Pool addresses the continuing liquidity crisis in emerging market infrastructure financing caused by the withdrawal of major commercial financial institutions from emerging markets during the global financial crisis as they continue to re-focus their lending activities on their home markets.  The ICF-DP is a €500 fund of loans supported by the German Government, and funded by KfW Entwicklungsbank under a guarantee of the German Goverment.

Cordiant manages emerging market investment funds.  Over the last decade, Cordiant has invested across a broad range of sectors, including energy and infrastructure. With over 160 investments in more than 55 emerging countries around the globe, Cordiant’s Emerging Loan Funds have a proven track record of successfully providing solid, stable returns to its investors.

INA is a leading Croatian oil and gas company, with a significant role in the region. It is owned by the Hungarian group, MOL, the Republic of Croatia and private and institutional shareholders. The company is listed on Zagreb and London stock exchanges.