Project description
and objectives:
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The project consists of the restructuring and revitalisation of the dormant mineral water industry in Borjomi and of the glass bottle production industry of Khashuri in Georgia.
The project seeks to achieve the following four objectives:
- to assist in the revitalisation of the Georgian mineral water industry;
- to support export-oriented production;
- to improve productivity, energy efficiency and product competitiveness; and
- to bring environmental practice up to world standards.
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Transition impact:
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The proposed loan will represent the first EBRD financing of a private sector industrial project in Georgia. It will send a strong message to potential investors that private sector projects are achievable in the country. The transaction has additional transition impact through the restructuring of GGMW's activities. The transfer of market-oriented skills to Khashuri and Borjomi will have great importance for the local economy and will produce benefits for other commercial entities. The project will introduce modern packaging equipment to Georgia and will allow Borjomi to compete effectively in the international mineral water market, thus helping the company regain its traditional markets in the former Soviet Union and to reach new ones. Finally, the project will introduce higher standards of governance through the involvement of experienced Western entrepreneurs.
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Environmental impact:
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The project was screened B/1, requiring an environmental audit of existing facilities and an analysis of the proposed development. Terms of Reference were prepared for undertaking the environmental due diligence, and an independent international consultant was selected with a view to fulfilling EBRD requirements, including the preparation of an Environmental Action Plan (EAP). The environmental due diligence addressed the issues raised at project appraisal, including those of water supply, product quality standards, potential ground and groundwater contamination and regulatory requirements. The due diligence did not identify any substantial environmental liabilities. The key environmental issues, which include sustainable use of water resources, waste-water treatment and discharge, noise emissions, fuel storage, as well as occupational health and safety measures, will be addressed through the implementation of the EAP, which has been agreed with the company. The EAP will ensure compliance with existing and future environmental standards in line with European Union legal requirements. The EAP will be implemented over the next two years. The project will introduce modern process technology with significantly lower energy requirements resulting in better energy efficiency. It will also result in the conversion of mazut, a heavy polluting energy source, to natural gas in the production of steam.
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