EBRD supports Ukraine’s Kokhavynska Paper Factory

The Ukrainian paper producer Kokhavynska Paper Factory (KPF) will reach the next stage of its development thanks to a €13.8 million loan from the European Bank for Reconstruction and Development (EBRD).

The financing will support the expansion of KPF’s product range, an increase in production capacity and improvements to the company’s operating efficiency. These will be achieved through investment in new equipment, which will allow KPF to enter the pulp-based-tissue market segment. The new production facility will have a full-cycle, in-house manufacturing process.

In addition, more than €1 million will be allocated to the modernisation of a wastewater filtering facility as well as to energy efficiency and climate adaptation measures. These improvements will help to reduce water usage and to cut CO2 emissions by 2,400 tonnes a year.

The energy efficiency improvements will be supported with an incentive grant of US$ 131,433 provided by the EBRD’s Finance and Technology Transfer Centre for Climate Change (FINTECC) programme, which is designed to transfer technology in the areas of climate change mitigation and adaptation.

KPF has also benefited from technical cooperation in the form of a grant from the EU4Business fund in Ukraine used for pre- and post-investment support. In addition, KPF was supported by advisory services, focused on market research and the development of a business plan, provided under the Small Business Impact Fund (United States of America, Italy, Japan, South Korea, Luxembourg, Switzerland, Sweden, the TaiwanBusiness-EBRD Technical Cooperation Fund and Norway).

Kokhavynska Paper Factory is one of the largest producers of recycled base paper and tissue and is located in western Ukraine. The company dates back to 1938, when the plant was built with the involvement of experts from Germany, Poland and Sweden. In the 1990s, the factory underwent voucher privatisation and is currently owned by 173 shareholders.

Following the privatisation, KPF rebuilt its old tissue production machines and acquired new additional one, as well as launching a production line for sanitary tissue products. The company now operates two tissue machines with a total capacity of 40,000 tonnes of base paper per year and has a total of seven production lines for sanitary tissue.

The EBRD is the largest international financial investor in Ukraine. To date, the Bank has made a cumulative commitment of €14.5 billion through 489 projects in the country.