Eurasian Logistics

Location:

Kazakhstan

Project number:

53147

Business sector:

Transport

Notice type:

Private

Approval date:

11 Jan 2023

Status:

Concept Reviewed

PSD disclosed:

02 Sep 2022

Project Description

The provision of a senior loan of up to US$ 14 million in favour of Eurasia Supply Chain Aktau LLP (the "Company").

Project Objectives

The loan proceeds will be used to finance the construction of a bonded logistics warehouse with an assembly and processing facilities at the Aktau Special Economic Zone (the "Project").

Transition Impact

ETI score: 63

The Transition Impact is expected to derive from "integrated" and "inclusive" qualities.

The Project will improve logistics infrastructure and services to facilitate trade along the Middle Corridor (Trans-Caspian International Transport Route). It will develop new linkages between the East Asia and the Caspian Sea economies by providing manufacturers from both regions better access to international markets.

 

To cultivate skilled employees for the sector, the Project will identify and map new technologies, practices and corresponding skills for the logistics and light industries. In line with this, it will develop and implement a new training programme in partnership with a local training centre. The programme will allow at least 120 young people to gain key skills for employability in the logistics and light industry sectors during the loan tenor.

Client Information

EURASIA SUPPLY CHAIN AKTAU LLP

The Company is a special purpose entity established in Kazakhstan for the purposes of the Project by Lianyungang Asia Euro B&R Supply Chain Base Limited (BRS), which is 70 per cent owned by Shanghai Ace Investment & Development Co., Ltd. (ACE) and 30 per cent owned by Jiangsu Xinhailian Development Group Co., Ltd. (Jiangsu), all registered in China. ACE is mainly engaged in supply chain logistics services and trading, while Jiangsu is a state owned enterprise responsible for infrastructure development in Lianyungang Economic and Technological Development Zone in the city's eastern urban area.

EBRD Finance Summary

USD 14,000,000.00

An 8-year senior loan in US$ of up to US$ 14 million equivalent.

Total Project Cost

USD 22,000,000.00

Additionality

Currently, women represent 25 per cent of the total workforce in Kazakhstan's transport, storage and communication sector. Gender gaps are particularly notable in technical as well as management and executive roles. The Company will commit to keep its share of female employees not lower than 40 per cent across all job functions and roles (management, technical and operational).

Environmental and Social Summary

Categorised B under ESP 2019. An environmental and social due diligence (ESDD) of the Project was carried out by an independent consultant and included a review of the current background documentation, a visit to the site, and analysis of the Company's proposed plans for construction and operation of the base in Aktau. The ESDD also involved a supply chain due diligence that was commissioned to understand the supply chain routes for the goods and materials, appraise potential supply chain risks associated with potential suppliers, and propose a supply chain management system (SCMS) appropriate for the Aktau base.

 

The main E&S risk relates to the supply chain concerns associated with potential suppliers that will be using the Aktau base facilities. The Project expects to handle two main categories of goods: finished goods and semi-finished goods shipped from China, Japan, South Korea and other countries. The type of goods will be determined by the client requests. To manage the potential supply chain risks, the Project will develop and adopt a comprehensive SCMS that will encompass the following: (i) policy statement and Code of Conduct, spelling out the Company's commitments regarding the human rights and management of risks across its supply chains; (ii) risk screening of all suppliers (iii) risk assessment of suppliers via self-assessment tools (iv) risk prioritization of suppliers and escalation procedure (v) labour audit of the high risk suppliers. It will engage a qualified supply chain expert on a full time basis to operationalize the SCMS and make any necessary enhancements as the scale of the Project increases or changes over time. The performance of the SCMS will be audited annually by an external assessor to confirm that the Company effectively manages risk exposures across its supply chains.

 

Other E&S aspects of the Project and future operations include personnel and community health and safety, emergency preparedness, waste management, resource efficiency and contractor E&S management. No land acquisition and resettlement are expected for the Project. The Company will develop and adopt a human resource management system to manage its labour management practices based on the requirements of national Labour Laws and ESP PR2. It will also be required to ensure that the accommodation facilities built on-site for the workers involved in the assembly and processing of the finished products are designed and constructed in accordance with the requirements of national laws and the EBRD/IFC Guidelines for Worker Accommodation 2009. 

 

The ESAP will cover the establishment of formalised E&S management systems for the Project operations and inclusion of relevant environmental, H&S and labour requirements for contractors (inclusive of COVID-19 risk management) and regular inspection of their performance; development and implementation of a pollution management plan; implementation of a relevant waste management system; and worker accommodation management plan. The Company will undertake consultation with key stakeholders, especially with local communities living around the base, as part of its Stakeholder Engagement Plan (SEP) and put in place a grievance mechanism accessible to the local communities. A community liaison officer will be assigned to manage the implementation of the SEP.

 

The Bank will monitor the Project through a review of annual E&S reports and site visits by Bank representative as appropriate.

Technical Cooperation and Grant Financing

The Project will benefit from post-signing TC support to assist the Company to develop and implement a training programme to cover key employability skills in the logistics and light industry sectors, in partnership with local vocational schools. The estimated cost of the assignment is up to EUR 60,000. Funding to be confirmed by a bilateral donor and/or the EBRD Shareholder Special Fund under the Gender and Inclusion TC Framework.

Company Contact Information

Yingying Bao
baoyingying@ace-sulfert.com
+86 13122104358
+86 021 58369851
http://www.aceonline.cn/
36F World Plaza No. 855 Pudong Road (S) Pudong Shanghai China 200120

PSD last updated

02 Sep 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

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 ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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