Translated version of this PSD: Russian
The EBRD is considering a facility for Universal Logistics LLP, the Kazakhstan-based rail freight transportation company. The facility consists of a senior secured long-term loan of up to USD 18.5 million.
The operation will enable the Company to finance the acquisition of railway wagons, spare parts, capital repairs of existing railcar park, as well as the acquisition of a logistic centre in Kazakhstan including, but not limited to warehouses and other capital expenditures acceptable to the Bank.
The Transition Impact is derived from the support of key sector reforms through wider private ownership and setting standards of modern business practices.
Support for key sector reform. Currently the state-owned Kazakhstan Temir Zholy is the dominant player in freight transportation in Kazakhstan, with estimated over 50 per cent share in the total quantity of rolling stock in the market. However, a sizeable portion of its fleet has an average age of over 20 years and requires replacement. In addition, the new technical regulation that is expected to come into effect in mid-2016 prohibits extension of useful lives of wagons through capital repairs, which will result in a further decrease in a number of operating freight wagons in the country.
Thus, the private investments to acquire rolling stock become important to avoid a disruption in such vital sectors as the railway transportation. With the support to Universal Logistics, there will be a direct contribution towards increasing share of the privately held wagon fleet in Kazakhstan and increasing participation of the private sector in railway freight forwarding services sector as well as diversification and renovation of the fleet.
Setting standards of modern business practice. The Project will introduce modern business practice to a private company operating in the railway freight forwarding sector in Kazakhstan through acquisition and compliance with international quality management and health and safety standards, as well as audit of financial statements. The Company will also work closely on improving corporate governance by developing and adopting a code of ethics and a corporate governance code.
UNIVERSAL LOGISTICS LLP
Universal Logistics LLP is a private company domiciled in the Republic of Kazakhstan, which provides rail freight transportation-expedition services, mostly specialising in delivery of food, beverages and construction materials. The Company operates more than 800 wagons (mostly hermos wagons, oil tanks and boxcars), including 542 own railcars, has its own repair depo nd started providing 3PL services in 2014. Universal Logistics primarily provides its services in
Kazakhstan with the subsidiaries in Russia and Ukraine as well as a representative office in China.
EBRD Finance Summary
A senior secured long-term loan of up to USD 18.5 million, or its equivalent in Kazakhstan tenge, to fund the acquisition of railway wagons, spare parts, capital repairs of existing fleet, as well as acquisition of logistic centre in Kazakhstan including, but not limited to warehouses and other capital expenditures acceptable to the Bank.
Total Project Cost
Up to USD 29 million.
Environmental and Social Summary
The Project has been categorised B under the 2014 Environmental and Social Policy. The environmental and social due diligence (ESDD) is currently underway focussing on a review of the company's corporate management systems, procedures and practices and key operations and facilities. The expansion of the Company's rolling stock fleet through acquisition of new and secondhand boxcars and thermally insulated wagons produced in Russia, refurbishment of the existing railcar park and acquisition of an existing warehouse facility is not expected to have significant environmental or social risks or impacts. Any adverse future impacts are likely to be site-specific and will be addressed through appropriate mitigation measures.
The Company has internal capacity and EHS policies and procedures in place to implement the project in compliance with EBRD's Performance Requirements. It is committed to develop an Environmental Management System in line with ISO 14001 and an Occupational Health and Safety management system in line with OHSAS 18001, provide the necessary training for the personnel and obtain respective certifications. The Company has adequate HR policy and provisions, and health and safety training is provided to all staff. The Company will need to establish robust operating procedures to cover process and labour safety as well as damage to the environment as a result of accidents and incidents.
An Environmental and Social Action Plan (ESAP) will be developed requiring the Company to address further improve its performance and ensure compliance with national regulations and the Bank' PRs during project implementation. The project will be monitored in terms of its environmental and social performance and implementation of the ESAP through annual E&S reports and site visits, where necessary.
This section will be further updated upon completion of ESDD.
Company Contact Information
For business opportunities or procurement, contact the client company.
EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
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