European Bank for Reconstruction and Development (EBRD) and BCR are providing the Romanian company Green Oil & 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, a press release informs. Both banks acted as Mandated Lead Arrangers for this transaction and BCR also acted as Documentation, Facility and Security Agent.
”It’s a highly innovative greenfield investment in Romania and one that focuses on the circular economy and the environment. The success of this project will demonstrate how business considerations and green concerns are more and more intertwined in a modern economy,” Matteo Patrone, EBRD Regional Director, Romania and Bulgaria, said.
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. 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 & 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.
“We are honoured to partner with two major international banks in developing a unique project in Romania, in a strategic location, on the banks of the Danube river, which connects eastern and central Europe, allowing us to fully recycle waste oil that is collected in the region,” Mazarali Kamumiya Saiyed, majority shareholder in Green Oil & Lubes, stated.
By supporting a new recycling facility, the investment addresses a core issue of Romania’s transition to a sustainable and green economy. Resource efficiency and recycling remain areas with significant room for improvement. On average every litre of lubricant oil generates 0.5 litres of waste lubricant oil. In Romania, only around 50 percent 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. In addition, the construction of a brand-new facility will include a significant transfer of skills and technology, while providing approximately 70 new jobs.