The provision of a senior secured loan of up to US$ 15 million to finance the partial replacement of Tashkent Pipe Plant's existing manufacturing line of large diameter spiral submerged arc-welded pipes (SSAW), with a new production line of longitudinal submerged arc-welded pipes (LSAW), leading to reduced greenhouse gas emissions. The Project has a GET share of 76 per cent.
ETI score: 60
Green: the EBRD use of proceeds will finance the acquisition of new and more energy efficient production technology for the production of LSAW, reducing energy intensity during production as well as greenhouse gas emissions of the Company, thus supporting green economy transition.
JV V L GALPERIN NOMIDAGI TOSHKENT TRUBA ZAVODI LLC
JV LLC "Tashkent Pipe Plant" (the "Company" or the "Borrower"), registered under the laws of Uzbekistan, is one of the largest local producers of fabricated steel products and the leading private producer of steel pipes in the country.
EBRD Finance Summary
Senior secured CapEx loan of up to US$ 15 million
Total Project Cost
The total Project cost amounts to US$ 30 million with US$ 15 million contribution by the Company.
The EBRD's additionality stems from (i) providing financing that is not available in the local market on comparable terms and conditions (e.g. long tenor), and (ii) helping the Company achieve higher environmental standards via the ESAP and a Resource Efficiency Audit.
Environmental and Social Summary
Categorised B (2019 ESP) and Low-Medium Risk. The Company is an existing client of the Bank and has demonstrated a robust approach to Environmental and Social (E&S) matters. The Project involves significant CapEx investment for replacement of the Borrower's current manufacturing line (for the production of spiral welded pipes) with a new manufacturing line (for the production of longitudinal welded pipes). The E&S risks and impacts are associated with construction and operation of the new project and include health & safety, emissions to air, water management, energy efficiency and noise. These impacts are similar to those associated with existing operations and can be readily addressed through mitigation measures and existing E&S management provisions. The previous E&S Action Plan (ESAP) agreed with the EBRD, has been fully implemented, and a new ESAP has been already agreed for the Working Capital project already signed. Nevertheless, the E&S due diligence (ESDD) identified some areas that the Company needs to focus on and a limited ESAP has been developed and will be agreed with the Company before Board. Key added actions include Ensure national environmental permit requirements are fulfilled for any expansion and/or modification of technology, Develop and adopt an Accommodation Procedure and Develop a Resource and Energy Efficiency Plan, as well as the internal and external grievance mechanism and enhancing Company's policies with regards to GBVH. Reporting by the Company to the EBRD on E&S matters will continue on an annual basis.
An Environmental and Social Due Diligence was conducted by ESD and independent consultant and included an Environmental and Social Assessment Report as well as a Resource Efficiency Audit.
The Company operates certified EHS management systems. Labour provisions are generally aligned with PR2. The Company operates three production units: Foundry, Rolling and Extrusion mills that are permitted by the Uzbekistan authorities and in process to achieve compliance with the BAT/BREF documents. The project will also be required to be fully aligned with the IED requirements and the Company needs to amend their permits for each stage of its implementation. The Company has further implemented various energy efficiency investments to reduce energy demand. The area of the Project implementation is not currently subject to flooding and there are no nearby water streams with potential for flooding at present or in the near future. No land acquisition is required for the Project.
Occupational health and safety provisions and performance are in line with the EBRD's requirements.
The project is not associated with any impacts to biodiversity or cultural heritage.
The Project is determined as aligned with the mitigation goals of the Paris Agreement, as it will finance the fabrication of steel products, an activity classified as 'aligned' with the jMDB list as a 'non energy intensive industry'. The PC risk score is 2 meaning that the CART is not considered to be materially exposed to physical climate risk. The Project involves an energy efficiency capex investment and will achieve a GET share of 76%.
Technical Cooperation and Grant Financing
- Legal due diligence: €7,500 mobilised to cover an overall assignment of €15,000. Source: Japan-EBRD Cooperation Fund.
- Market due diligence: €10,240 mobilised to cover an overall assignment of €11,376. Source: Shareholders' Special Fund.
- Financial due diligence:€43,824 mobilised to cover an overall assignment of €62,600. Source: Shareholders' Special Fund.
- Environmental due diligence in two stages: €37,820 mobilised to cover an overall assignment of €39,800. Source: Shareholders' Special Fund.
- Resource efficiency audit:€44,755 mobilised to cover an overall assignment of €49,750. Source: Global Environmental Facility.
Company Contact Information
4 Furkat Street, Tashkent, 100021, Uzbekistan
PSD last updated
09 Sep 2022
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Independent Project Accountability Mechanism (IPAM)
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