RLF

Aug 07, 2023

Provision of long term funding in the amount of EUR 42 million to Cersanit S.A. (the "Company") to complete multiple investments both in Ukraine and Poland as well as actively manage working capital needs (the "Project").

The Project is approved under € 2bn Resilience and Livelihoods Framework ("RLF") with ultimate aim of helping citizens, companies and countries affected by the war on Ukraine. Further details can be found here: https://www.ebrd.com/news/2022/ebrd-unveils-2-billion-resilience-package-in-response-to-the-war-on-ukraine-.html

This project was approved in the context of the Bank's response to the Russian-led invasion of Ukrainian territory in February 2022. To avoid delays to the delivery of this project, the Bank's President granted a deviation from the ordinary timelines for PSD disclosure, as contemplated by Section V of the Directive on Access to Information. Details of this deviation, and the Bank's response to this situation, can be found on our website.

The project represents EBRD support to a leading ceramic tile and sanitaryware manufacturer that is expected to play an instrumental role in the reconstruction of damaged infrastructure in Ukraine. In addition the project will address the adversities faced by the Company through expansion and reconstruction of assets ultimately aimed at compensating the impact of (i) the divestment of the Russian operations, (ii) the war on Ukraine and (iii) a fire at one of its key facilities in Poland that have affected the company's operations, liquidity and its human capital resilience.

ETI score: 65

- Resilient: project supports (i) restoring the normal level of production operations after the period of idleness during the war and completing started investments in Ukraine; (ii) reconstructing the acrylic products plant, increasing capacity and improving energy efficiency of the tiles and sanitary ware plants in Poland.

- Inclusive: project will help to preserve human capital in Ukraine and in Poland, as well as will facilitate the ongoing reconstruction of Ukraine's housing and public buildings infrastructure through the sufficient and timely supply of its ceramic tiles, sanitary ware and bathroom equipment products.

CERSANIT SA

Cersanit S.A., together with its subsidiaries, is a leading European manufacturer and distributor of ceramic tiles and bathroom equipment.

EUR 42,000,000.00

EUR 120,000,000.00

The EBRD financing is provided under extraordinary circumstances stemming from the war on Ukraine, offering a unique set of terms, attributes and conditionalities.

Category B (ESP 2019). The Bank has a long standing experience with the client and environmental and social issues can be readily assessed and mitigated based on an Environmental and Social Due Diligence (ESDD).

The key environmental and social issues relate to compliance with EU environmental standards such as EU BAT as well as social issues associated with human resources and stakeholder engagement. The Bank's in house ESDD was undertaken through questionnaires, review of publically available documents and discussion with the Company. No visits where possible and information from Ukrainian operations was based only on questionnaires. However, adequate information is available also from past projects to undertake a meaningful due diligence.

Overall the Company managed EHS issue well and has a well-developed HR and EHS system. There are no reported noncompliance issues associated with environmental or social issues and the Company has a good compliance record.

Based on the ESDD a comprehensive ESAP has been developed which includes the commitment to further strengthen the corporate ESG management system and allow for the Group to report in line with EU sustainability reporting frameworks from 2024 onwards. This includes the EU Corporate Sustainability Disclosure Directive (CSRD) and relevant European Sustainability Reporting Standards (ESRS), which will cover all operations by 2025 and include information on human rights, gender, emission, stakeholder engagement as well as climate risks and strategies as well as compliance and supply chains. The Company will follow EU and Bank guidance on any retrenchment plans, if such are needed in the future. As part of the ESAP the Company has agreed to undertake a comprehensive sustainability audit in 2023 to assess compliance as well as help the Company to prepare for the 2024-5 European disclose requirements. The Bank will monitor the implementation of the Project.

The EBRD Shareholder Special Fund ("SSF") will cover the legal due diligence costs.

[email protected]+48 (041) 315 80 04 / 05https://www.cersanit.com/Cersanit S.A.al. Solidarności 36, 25-323 Kielce, Poland

02 Dec 2022

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More information on the EBRD's practices in this regard is set out in the ESP.

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to [email protected]. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client's Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD's Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email [email protected] to get guidance and more information on IPAM and how to submit a request.