Olzha phase 3 loan

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 47150

Status Complete

Location

Kazakhstan

Business Sector

Transport

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Project ID 47150

Status Complete

Location

Kazakhstan

Business Sector

Transport

Notice Type

Private

Environmental Category

Approval Date

14 Jan 2015

Disclosure date

04 Dec 2014

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Translated version of this PSD: Russian

Project description and objectives

The EBRD is considering providing a secured loan to JSC Olzha, a private operator of freight wagons in Kazakhstan. Proceeds of the loan will be used for acquisition of new freight railcars.

Transition impact

The first loan with Olzha was signed in July 2013 with the key transition objectives:

(i) private sector expansion in a market which is dominated by the state sector;

(ii) development of the leasing market which remains underdeveloped (in particular the railcar leasing segment); and

(iii) setting standards through formal introduction of OHSAS 18001 (safety process and management), which is a key issue for LPG railcars. The loan extension of USD 9 million was signed on 27 March 2014 to further support the development of the private owner and operator of freight wagons. This additional financing was used for the acquisition of freight wagons and a locomotive.

Built on the achievements made during the first loan (and its extension), the proposed Phase III loan will further facilitate implementation of the original transition objectives and promote enhancing corporate governance standards via setting up the Audit and Risk Committees at the Board level with independent board directors.

The state-owned railway company still plays a major role in rail transportation sector. The key objective of the transaction is to support a private ownership and operations in line with the larger railway reform plan. By supporting Olzha in the acquisition of additional railcars, the Project will contribute towards increasing the share of wagons owned and operated by private companies in Kazakhstan.

New wagons will be leased to medium-sized companies and used for transportation of different types of commodities such as consumer goods, hard commodities, construction materials, etc. These companies generally require not more than 100-150 wagons and maintaining their own fleet is often not commercially justified. By supporting the acquisition of additional wagons the Project would indirectly support small and medium-sized companies whose business involve transportation of commodities and thereby improve trade interactions with their customers.

The client

The company’s activities include: lease of railcars, transportation and sales of liquefied petroleum gas (LPG) and oil products (mainly diesel and gasoline).
The company operates about 1,600 wagons, mostly LPG and oil tanks.

EBRD finance

A senior secured loan in the amount of USD 11.0 million.

The EBRD is considering extending final maturity of the loan.

Total project cost

USD 11.0 million.

Environmental Impact

The proposed project has been categorised B (2014). The ESDD undertaken by ESD for the previous projects identified that the expansion of the Company's rolling stock fleet will not result in significant environmental or social impacts. The Company's leased railcars are involved in transportation of hazardous materials.

It is a responsibility of shippers to obtain accident and incident insurance cover for transportation of goods, while the railway carrier (KTZ) bears the operational risk and is responsible for emergency planning and response. To date the Company has developed an employee and community grievance procedure, developed a procedure for logging accidents and incidents and also provided the Bank with a satisfactory annual environmental and social report for 2013.

The ESAP requires, among others, the Company to develop an integrated EHS management systems. The Team will conduct a monitoring visit to discuss the implementation arrangements for the newly-developed management systems, and also visit the depot in Kulsary.. The Bank will also continue environmental and social monitoring of the Project through review of AESR and ESAP implementation reports.

Technical cooperation

None.

Company contact

Mr Arman Beissekov,
Deputy CEO on Economy and Finance
arman.beissekov@olzha.com

Transition impact

ETI Score:85

PSD last updated

21 Oct 2019

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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Olzha phase 3 loan

Project timeline

Translated version of this PSD: Russian

Project description and objectives

Transition impact

The client

EBRD finance

Total project cost

Environmental Impact

Technical cooperation

Company contact

Transition impact

PSD last updated

Business opportunities

General enquiries

Public Information Policy (PIP)