Construction of waste-oil recycling facility funded by a USD 38.7 mln club loan granted by EBRD and BCR

Georgiana Bendre 06/12/2017 | 12:32

The EBRD and Banca Comerciala Romana (BCR) are providing the Romanian company Green Oil and Lubes SRL with a USD 38.7 million syndicated loan, on a club loan basis, for the development, construction and operation of a recycling plant for waste lubricant oils. Both banks acted as Mandated Lead Arrangers for this transaction and BCR also acted as Documentation, Facility and Security Agent.

The financing is part of a USD 56 million investment programme by the company with the goal to build a 73,000-metric-tonne recycling facility in the south Romanian city of Oltenita, Calarasi County. The plant will recycle waste lubricant oils and transform them into base oils for sale and reuse in the automotive and industrial sectors.

Green Oil and Lubes SRL is part of a group of companies established by the Indian engineer and businessman Mazarali Kamumiya Saiyed. The group will contribute USD 26 million of its own resources to the investment programme, while the remaining USD 30 million will be ensured by a term loan in equal measure signed by the EBRD and BCR. Under the same facility agreement, BCR will also provide USD  8.7 million for the financing of working capital needs and recoverable VAT related to the development of the project.

Matteo Patrone, EBRD regional director, Romania and Bulgaria, said: “We are pleased and honoured to partner with a strong and dynamic company such as Green Oil and Lubes in this venture. It is a highly innovative greenfield investment in Romania and one that focuses on the circular economy and the environment.”

Sergiu Manea, BCR CEO: “Co-financing environmental projects is one of the strategic directions of BCR and we are glad that we can contribute to an investment that addresses one of Romania’s critical issues, that of recycling facilities.”

Mazarali Kamumiya Saiyed, majority shareholder in Green Oil and Lubes, said: “We are honoured to partner with two major international banks in developing a unique project in Romania , allowing us to fully recycle waste oil that is collected in the region.”

On average every litre of lubricant oil generates 0.5 litres of waste lubricant oil. In Romania, only around 50 per cent of this waste is collected, and it is mainly used as fuel for producing heat, generating significant quantities of greenhouse gas emissions.

The new company expects to collect the majority of recyclable waste oil in the country and to create a product that is attractive and affordable for local customers.

Badea Clifford Chance acted as legal advisor to the lenders while Reff and Associates as legal adviser for Green Oil and Lubes SRL.

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