The provision of a senior loan of up to US$ 14 million in favour of Eurasia Supply Chain Aktau LLP (the "Company").
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").
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.
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
An 8-year senior loan in US$ of up to US$ 14 million equivalent.
Total Project Cost
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
+86 021 58369851
36F World Plaza No. 855 Pudong Road (S) Pudong Shanghai China 200120
PSD last updated
02 Sep 2022
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Independent Project Accountability Mechanism (IPAM)
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