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Environmental Protection Project

Country
Brazil Brazil
Status
Completed
Area Of Operation
Environmental Protection Environmental Protection
Type
Non-Sovereign
Board Approval Date
28 May 2018
Current Limit of NDB Financing
USD 200 million
Borrower
Petroleo Brasileiro S.A. (Petrobras)
Project Entity
Petrobras

More About This Project

Petrobras is one of the world’s largest integrated oil and gas companies, and one of the largest corporations in Brazil, with USD 89 billion in revenues in 2017. The Company’s current activities account for the significant majority of Brazil’s petroleum industry.

Petrobras maintains market leadership in all vertical of the hydrocarbon sector, from upstream where it holds large proved reserves, to its dominant downstream refining capabilities, and to a fully developed distribution infrastructure.

The Project consists of upgrades in infrastructure and equipment of two existing refineries that will improve the Company’s environmental performance and address new regulations required by local environmental legislation. As a result of the Project, harmful emissions will be significantly reduced and water and soil contamination will be avoided. NDB will support the Project through a senior, unsecured corporate loan of up to USD 200 million.

The Project’s components are divided into four sub-projects in two different refineries – REGAP (located in the municipality of Betim, in the state of Minas Gerias) and REDUC (located in the municipality of Duque de Caxias, in the state of Rio de Janeiro).

In line with NDB Policy on Transactions without Sovereign Guarantee, the Project will have significant developmental impacts, in particular related to environmental and social benefits from reduced water contamination and improved emissions. In this context, the Project is designed with financing from NDB to support Petrobras to improve its environmental protection track record and comply with new regulatory requirements.

The Project is estimated to be implemented over 6 years between 2016 and 2021. Suppliers for the Project will be selected through competitive and transparent bidding process.

The Project will bring significant developmental impacts, particularly related to environmental and social benefits from reduced water contamination and improved emissions. The Project interventions which are based on international best practices and best environmental technology and processes will improve the company’s environmental performance significantly. The Project is categorized as “B” in accordance with the NDB Environment and Social Framework with no irreversible adverse social and environmental impacts. Identified negative impacts are site-specific and in most cases mitigation measures can be readily implemented.

The total cost of the Project is estimated to be USD 376.8 million. NDB will support the Project through a senior, unsecured corporate loan of USD 200 million, accounting for 53% of the total cost. The balance of USD 176.8 million will be financed by Petrobras.

Source of Fund Amount (USD million)
New Development Bank
200
Petrobras 176.8