The provision of a senior secured loan of up to US$ 1.8 million to support the expansion of Ak Hunji, a leading producer of decorative profiles and sandwich panels in Turkmenistan. Part of the loan will finance the Company's working capital needs.
Ak Hunji is planning to launch the production of decorative floors, ceiling profiles and other elements from Extruded Polystyrene (XPS). The use of XPS will improve quality and durability of the Company's products. The project will help Ak Hunji start exports sales to neigbouring countries.
ETI score: 80
The DFF SME framework primarily targets the Competitive quality by helping SMEs restructure and become more efficient or professional. Sub-projects can target any of the other transition qualities as a secondary objective. This project is supporting framework objectives by supporting an SME in the following areas:
1. Competitive through an increase in exports and
2. Well-governed trhough annual verification of the IFRS restated accounts by an independent auditor.
Ak Hunji (the "Company") is a legal entity registered and operating in Turkmenistan. The Company is a leading producer of decorative profiles, shapes and sandwich panels made of XPS.
EBRD Finance Summary
A senior secured loan of USD 1.8 million to finance the Company's capital expenditures and working capital needs.
Total Project Cost
Financing Structure: (a) Loan tenor is above the market average;
Risk mitigation: (a) the EBRD provides comfort to the client by mitigating non-financial risks.
Environmental and Social Summary
Categorised B (ESP 2014). The production of moulded materials and sandwich panels may be associated with a limited number of environmental and social issues, which can be readily identified and mitigated through appropriate measures. The Company completed the standard environmental and social questionnaire, which was reviewed by ESD. The answers demonstrate on-going compliance with national environmental, health, safety and labour requirements. There are, however, issues which will need to be carefully managed by the Company, particularly health and safety of employees and some lesser environmental issues such as management of wastes. It is noted that the Company intends to introduce best practice management systems; it had already introduced ISO 9001 for quality last year. An ESAP will be agreed with the Company to formalise selected actions to ensure that the Project is structured to comply with the Bank's Performance Requirements. The Company will be required to report annually on environmental and social issues to the Bank and on the implementation of the ESAP.
Technical Cooperation and Grant Financing
(1) Financial Due Diligence, €12,960; (2) Legal Due Diligence, €14,280; (3) Technical Due Diligence, €6,100.
Company Contact Information
90 Ashgabat Street, Mary, Turkmenistan 745400
PSD last updated
13 Apr 2020
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