The provision of a senior secured loan of US$ 5 million to Nika Pharm LLC, a local pharmaceutical manufacturer in Uzbekistan. The project will finance the purchase of technological equipment to increase the company's production capacity of pharma goods, research and development (R&D) upgrades and the construction of new warehouses in the regions of Uzbekistan.
The project will enhance the competitiveness of the company by supporting the capacity expansion of a local manufacturer, addressing indirectly the domestic pharma trade imbalance in the sector, which is currently heavily dominated by imports. The project further assists in the expansion of the company's geographical outreach via the construction of three new warehouses in the regions. Another integral part of the EBRD transaction has been the development of a tailor-made Corporate Governance Action Plan, to be adopted and implemented by the company and the wider Asklepiy Group to which it belongs.
ETI score: 67
The Project will support:
- Primary quality "Competitive": improve the competitiveness of the Company via operational improvements, namely increased manufacturing capacities across tablet and capsules formulations, R&D capability upgrades and the construction of new warehouses in the regions.
- Secondary quality "Well-Governed": significantly improve the corporate governance practices of the Company through a comprehensive Corporate Governance Action Plan (the "CGAP").
NIKA PHARM LLC
Nika Pharm LLC, founded in 2006, is a local manufacturer of pharmaceutical products, established in Uzbekistan. The Company is engaged in the production of tablets, capsules, sachets and nasal sprays. This is currently the second largest domestic producer of pharmaceutical goods in the country.
EBRD Finance Summary
US$ 5 million senior secured loan to the company in two tranches
Total Project Cost
The total Project cost amounts to US$ 8 million with inclusive of US$3 million contribution by the company.
- Financing structure: the EBRD offers financing with a tenor longer than what is available from local commercial sources for domestic corporates and it is necessary for the Company to implement its long-term capital expenditure (CAPEX) plan;
- Standard-setting: Through the Bank's participation, the company and the Group will improve their corporate governance, through the adoption and implementation of a tailor-made Corporate Governance Action Plan. This will support the business to further grow in market share, become more aligned with best practices and resilient in its operations.
Environmental and Social Summary
Categorised B (ESP 2019), Low Medium risk based on sector risks and Company's capacity to carry out its operations in line the EBRD PRs. The operations of pharmaceuticals formulation without API manufacturing and wholesale distribution are not associated with any significant environmental issues. The Project has no GET eligible components and is aligned with PA.
The ESDD for this project was carried out in line with COVID 19 approach and was based on in-house ESDD via corporate E&S Questionnaire, interviews and support materials review. The ESDD has confirmed that the Company has well established ESH capacities and manages its operations in manufacturing facilities, R&D laboratory and warehouses in line with established EHS Policies, implemented management systems certified to ISO 9001, 14001, 45001 and 22000 standards. The production facilities comply with national requirements of the Good Manufacturing Practices (GMP). The ESAP requirements include contractor management for warehouses construction, introduction of Good Distribution Practices (GDP) requirements, completion of land acquisition in line with the EBRD PR5, waste water treatment facility construction at the formulations facility, non-ozone-depleting refrigerants use, occupation health and safety and working conditions, fire safety controls, compliance with EURO6 exhaust emissions for the new transport fleet, pharmacovigilance and product safety procedures, among others. The ESAP will have to be agreed with the client prior to signing. The Bank will monitor the Project and the ESAP implementation through review of Annual E&S Reports and site visits as required.
Technical Cooperation and Grant Financing
- Technological Audit: €30,000 TC to identify the Company's technical gaps and provide solutions that enable further growth.
- Legal Due Diligence: € 19,000 TC to cover external legal DD expenses for an overall assignment of €43,500.
- Financial Reporting & Management: €40,000 TC to help the Company transition from national GAAP to IFRS.
All funds are provided by the EBRD's Shareholder Special Fund.
Company Contact Information
48A, Sayram passage 7, Tashkent, Uzbekistan 100170
PSD last updated
03 Dec 2021
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