This project was approved in the context of the Bank's response to the COVID-19 pandemic. To avoid delays to the delivery of this project, the Bank's President granted a deviation from the ordinary timelines for PSD disclosure, as contemplated by Section V of the Directive on Access to Information. Details of the Bank's response to COVID-19, and this deviation, can be found on our website.
The provision of a senior multicurrency loan of up to US$ 50 million to be provided in favour of JSC Air Astana (the Company). The financing will be provided in two tranches to support the Company in managing the Covid-19 pandemic and subsequent air traffic restrictions and to finance the acquisition of flight simulation equipment and associated costs.
The loan will be used to help the Company limit negative impact of the Covid-19 pandemic on it operations and to preserve transition gains achieved by the previous project.
ETI score: 90
The working capital tranche of the proposed facility under the Resilience Framework supports preserving the TI gains achieved to date, as well as extending the previously developed technical maintenance centre's capacity by carrying out more complex maintenance checks (C-checks) and preserving third party access to maintenance and training facilities, as well as by facilitating the transfer of top-tier engineering and maintenance skills. It will place special emphasis on increasing women's participation in these training programmes and consequent representation in such roles.
Likewise, the flight simulator, to be acquired in the context of the project, will strengthen the Company's capacity for providing its pilots with full-scale, world-class training. Furthermore, it would create opportunities for external pilots from Central Asia to obtain high quality training and expertise, and ensure continued upgrading of their skills, despite Covid-19-related restrictions on international travel.
AIR ASTANA JSC
JSC Air Astana is the Republic of Kazakhstan's flag carrier. It is 51 per cent owned by Samruk-Kazyna Sovereign Welfare Fund and 49 per cent by BAE Systems.
EBRD Finance Summary
Total Project Cost
The Bank is additional as the liquidity facility effectively bridges a financing gap caused by adverse market conditions due to the Covid-19 crisis.
Environmental and Social Summary
Categorised B (2019 ESP). Environmental and Social due diligence (ESDD) has been undertaken in-house in line with the ESD's response to Covid-19 and consisted of a review of the Corporate and Covid-19 Questionnaires and supporting documentation, a review of the Company's CSR report, as well as the 2019 AESR for the previous transaction. As the use of proceeds is for working capital and purchase of a flight simulation equipment and not to be directed to specific physical assets, the project is not expected to result in additional E&S impacts nor additions to the physical footprint of the Company's operations. The Company will be required to align its corporate environmental and social management systems with the Bank's Performance Requirements (PRs) through the implementation of an Environmental and Social Action Plan (ESAP).
ESDD findings show that the Company follows national regulations, and an environment, health, and safety ("HSE") management system is reported to be in place. The Company has set requirements for suppliers to comply with national environmental protection and labour protection standards. A Code of Conduct (2019) is publicly available and applies also to non-employees where applicable. Air Astana is OHSAS 18001 certified and has an Occupational Health, Safety and Environmental Protection policy. IATA Operational Safety Audit (IOSA) is conducted every two years; the last audit was successfully completed with zero findings. Industrial waste is collected and disposed by specialised organisations. Once a year, the Company submits a report on hazardous waste and greenhouse gas inventory to Authorities. On a yearly basis, Air Astana provides reports on EU Emission Trading System (ETS) and Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) to an independent audit agency; after the independent audit, the reports are submitted to the German Emissions Trading Authority.
Previous due diligence and the corporate questionnaire confirm that the Company's activities are largely aligned with the requirements of PR2. The Company, however, is lacking a policy to address risks of Gender Based Violence and Harassment (GBVH). The Company has a 'speak up' policy to address complaints from workers and the public, however, the role of the mechanism in addressing labour-issues and situations of GBVH is not clear in the documentation provided.
The Covid-19 pandemic has resulted in cuts to most international and domestic flights. As a cost saving measure, the majority of the workforce were placed on temporary paid leave at 50 per cent of their regular salaries. As of February 2021, over 60 per cent of employees have returned to full-time work and the Company does not plan further workforce reduction measures. The ESAP will include an action requiring the Company to ensure that any plans to reduce payroll costs including retrenchment be conducted in accordance with PR2 and that the EBRD be advised in advance. The review of the COVID-19 questionnaire confirmed that measures are in place to limit the spread of COVID-19 (such a minimum presence of workforce, with mandatory measures relating hygiene and physical distancing). Currently the Company has no formalised Stakeholder Engagement Plan (SEP) but have an online customer feedback mechanism in place. A Corporate Sustainability Summary Report is published yearly.
An ESAP has been prepared to be added to the existing 2015 ESAP. The additional ESAP items include development of a Sexual Harassment Policy, and modification of the worker grievance mechanism to address labour issues and GBVH. The ESAP has been agreed with the Company. The Bank will monitor the Company's environmental and social performance in accordance with the Bank's PR's through review of reports and monitoring visits as required.
Technical Cooperation and Grant Financing
Company Contact Information
4A Zakarpatskaya street Almaty 050039
PSD last updated
31 Aug 2021
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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).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email firstname.lastname@example.org to get guidance and more information on IPAM and how to submit a request.