Kronospan to receive €190m loans for two new plants in Belarus and Russia

The European Bank for Reconstruction and Development (EBRD) has signed two separate long-term loans which will provide up to €190m for the construction by Kronospan – a privately held global leader in the wood based panels market – of new production facilities in Russia and Belarus.

Both plants are designed to use low quality wood that is currently treated as industrial waste, and the projects will encourage sustainable forest management.

The two projects are part of an EBRD strategy to develop the forest products sector, based on sustainable forest management principles in the two countries, which both have vast but under-utilised forest resources.

Kronospan’s planned €200m facility will be the first in Belarus to produce OSB and will have a production capacity of up to 500,000m3 of OSB a year.

For the Russian project, the EBRD will be the lender for the full amount of Euro €90m, half of which has been syndicated to Raiffeisen Bank International AG under an A/B loan structure.

It will be the first foreign direct investment in the forestry sector in Russia’s Bashkortostan Republic.

Kronospan is investing €195m in the Bashkortostan plant, which will be able to produce up to 500,000m3 of particleboard a year.