Ecolant announces the receipt of the first tranche in the amount of 33 million euros for the implementation of Russia's first green metallurgy project in the Nizhny Novgorod region. The funds were provided by a syndicate of Russian commercial banks - Sberbank and Otkritie Bank (40% each), as well as VEB.RF (20% of the amount). The total cost of the project, which is being implemented using the Project Finance Factory mechanism, exceeds 140 billion rubles.
The project includes the construction of a full-cycle electrometallurgical complex using modern environmentally friendly technologies and the necessary infrastructure in the single-industry town of Vyksa. The future complex will produce steel, round billets and high-quality slabs using the direct reduction method using iron ore pellets and natural gas. The technology used will make it possible to reduce carbon dioxide emissions by a factor of three compared to the classic BOF steelmaking technology.
The Ecolant Metallurgical Complex will combine environmentally friendly technologies and unique engineering solutions. It will provide green steel for the production of high value-added products for the fuel and energy complex and the transport sector. The first funds that will come within the framework of financing will be directed to the purchase of high-tech equipment. We are grateful to our partner banks for their professional approach. Ecolant, which is scheduled to be launched in 2025, will give impetus to the development of the metallurgical industry and will contribute to the growth of the Russian economy as a whole,” said Andrey Kukhno, director of Ecolant LLC.
"Agreement on participation in the VEB.RF project and partners signed in April 2021, and just two months later, project financing was already opened. This is responsible financing: the project technology allows to significantly reduce carbon dioxide emissions compared to traditional steel production technology, and meets current and future international environmental requirements. The project in Vyksa is very important for the entire region, it will provide more than 700 new jobs,” said Nikolai Tsekhomsky, First Deputy Chairman of VEB.RF, Member of the Board.
“We are pleased to take part in financing such a large-scale and promising green metallurgy project. This complex will become one of the most productive in the world and will demonstrate that even in energy-intensive industries such as metallurgy, effective ESG solutions are possible that minimize the carbon footprint and impact on the environment as a whole. So this is a landmark construction in all respects - not only for the industry, but for the transfer of the entire domestic industry to the "green" rails, - commented Alexander Vedyakhin, First Deputy Chairman of the Board of Sberbank.
“We see that the demand for responsible investment is growing - in addition to profit, sustainable development is becoming the goal of our corporate clients. For our country, "Ekolant" has become a pilot project of "green" metallurgy. It uses technologies that are advanced not only for Russia, but also for Europe. We are talking about a significant amount of capital investments and the launch of large-scale production in a short time, which requires the consolidation of the efforts of many parties, and we are pleased to be among the financial partners selected for the implementation of such a high-tech project,” said Senior Vice President, Director of Operations with clients of the corporate and investment block of Otkritie Bank Ekaterina Chirkova.
Reference
"Ekolant" is a metallurgical complex without coke-chemical and blast-furnace-converter stages. The steel will be produced from iron ore and natural gas using Direct Reduced Iron (DRI). The project is a single production chain "ore-steel" consisting of DRI, an electrometallurgical furnace and an out-of-furnace processing complex with a capacity of 1.8 million tons of steel per year and two continuous casting machines. The start of production is expected in 2025. The main part of the production will be used for the production of wide sheet for large-diameter pipes of main pipelines and shipbuilding, the production of seamless pipes for oil production and the production of railway wheels on the largest line in Europe at the Vyksa plant of the United Metallurgical Company.