Provision of a USD 5,000,000 senior secured loan to JV Angren Insulation LLC (the "Borrower" or the "Company") to finance the acquisition of technological equipment for a greenfield manufacturing plant for the production of thermal insulation products (the "Project") with a manufacturing capacity of 20,000 tonnes per annum.
The Project aims to (i) strengthen the Co-Borrowers' competitive position by improving quality standards in production that will be fully compliant with international certification; (ii) contribute to reducing carbon footprint and thus the green economy through its energy saving qualities; and (iii) improve profitability of the Co-Borrowers.
The Project contributes to two out of three strategic priorities in Uzbekistan: (i) enhancement of competitiveness of the private sector, as well as; (ii) the transition to a greener economy addressing significant transition gaps in the country.
ETI score: 80
The DFF SME framework primarily targets the Competitive quality by helping SMEs to restructure and become more efficient or professional. Sub-projects can target any of the other transition qualities as the secondary objective. This Project contributes to the Competitive and Green qualities.
JV ANGREN INSULATION LLC
JV Angren Insulation LLC, a greenfield company incorporated under the laws of Uzbekistan in 2018 and established to manufacture glass wool thermal insulation products with a total annual capacity of 20,000 tons p.a.
JV Ecoclimat LLC, a company incorporated and operating in the Jizzakh Free Economic Zone (FEZ) in Uzbekistan since 2015, is the first and only local and Central Asian producer of glass wool thermal insulation products, with the capacity of 12,000 tons p.a.
EBRD Finance Summary
USD 5,000,000 senior secured capex loan to the Co-Borrowers.
Total Project Cost
The total project cost amounts to USD 13,700,000.
The EBRD's additionality stems from the ability to (i) provide financing that is not available in the market from commercial sources on reasonable terms and conditions, e.g. a longer grace period; (ii) provide comfort by mitigating non-financial risks such as country, regulatory, project, economic cycle, or political risks; and (iii) support the Project to achieve higher standards inter alia higher inclusion and gender standards.
Environmental and Social Summary
Categorised B (2019 ESP). Medium-high risk rating due to the process and product safety issues and country's high labour risk profile. The environmental and social impacts associated with operations of the existing and construction of a new insulation wool plants are site-specific and can be addressed via an ESAP implementation. The ESDD was carried out in-house in line with the ESD Covid-19 Guidance to the ESDD, and entailed review of the E&S Project Questionnaire, support materials, a number of calls with the Client and a site visit by the banking team to collect data and images from the operational plant and construction site. The key E&S issues identified include high carbon footprint of the production processes associated with high energy intensity of the process; hazardous materials and waste handling, air emissions abatement, product safety as well as labour and occupational health and safety management and stakeholder engagement. The new plant was subject to the environmental permitting by the local authorities and didn't require a national ESIA. The high temperature insulation wool manufacturing is eligible under the EU IED, and thus the new Project will have to comply with the requirements of the EU BAT Conclusions for Glass Manufacturing. The kiln supplier estimates for dust and HCL concentrations are significantly higher than EU BAT limits, with NOx and SOx being slightly higher and no estimates available for VOC, heavy metals and FCL. The Client will be required to install a bag filter and carry out an independent BAT Assessment with emissions measurements within first year of operations. The labour risks were assessed and no serious issues were identified given the limited resources with specific skills required for this highly automated process. Other ESAP measures include improvements in E&S management systems, materials storage, spills prevention, resource efficiency, occupational health and safety controls and behavioural programs, and fire safety management among others. The ESAP will have to be agreed with the Client prior to signing.
Technical Cooperation and Grant Financing
(i) EUR 50,000 Technical Cooperation (TC) to cover legal consultant expenses provided by Shareholder Special Fund with a 33.3% client contribution.
(ii) EUR 26,000 TC to cover financial auditor expenses under EBRD's Accounting Improvement Project program aimed at the restatement of financial statements from local GAAP to IFRS. The funds are provided by the Small Business Impact Fund with a 25% contribution from the Borrower.
Company Contact Information
+998 71 2076776
Eski Otchopar St. 3, Mirabad District, Tashkent Uzbekistan
PSD last updated
27 Aug 2021
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
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