The provision of a senior secured loan of up to US$ 12.9 million to joint venture Mawy Kenar, a provider of environmental remediation services, for addressing the legacy of oil production activities in the Balkan region of Turkmenistan.
The EBRD loan will allow Mawy Kenar to finance its working capital needs and to acquire a mobile sludge treatment unit. The financing will also help mitigate the impact of Covid-19 on the company operations.
ETI score: 80
Competitive: This project will allow the company to undertake environmental remediation services by providing financing for the acquisition of a full-scale plant and by injecting working capital to ensure vital capacity and liquidity are maintained during and beyond the COVID-19 crisis. The EBRD's support including with the project development and implementation will allow Mawy Kenar to build a solid base in Turkmenistan, becoming a profitable environmental remediation services provider that adheres to the highest standards and best practices and potentially expand its operations in the region.
Green: The project will contribute to environmental remediation, specifically the clean-out of oil-contaminated areas in order to help preserve the environment in the region. The project will help mitigate ecological hazards to the populace, wildlife and ecology of the region by significantly reducing the oil content in the soil (to 2 per cent or less). Furthermore, the Company has developed, with the assistance of the EBRD, an Environmental and Social Action Plan. The project is 100 per cent GET compliant.
MAWY KENAR JVC
Mawy Kenar Joint Venture Company is a limited liability company organised and existing in Turkmenistan and owned by Gazyk IE, Benel Technical Services Inc (of Canada) and Hazar Balyk OJSC.
EBRD Finance Summary
Up to US$ 12.9 million senior secured loan to Mawy Kenar in two tranches: (i) Tranche 1: US$ 2.5 million for working capital needs and (ii) Tranche 2: US$ 10.4 million for capital expenditure financing.
Total Project Cost
- Financing structure: the EBRD offers financing in US$, with a longer tenor. In addition, the EBRD financing effectively bridges a liquidity gap due to adverse market conditions, e.g. the COVID-19 crisis.
- Risk mitigation: the EBRD provides comfort to Mawy Kenar in this project in Turkmenistan, by mitigating non-financial risks, in view of the EBRD status of an International Financial Institution (IFI). In addition, the company seeks the EBRD expertise on higher environmental standards. In this context, the company has developed, with the assistance of the EBRD, an Environmental and Social Action Plan.
Environmental and Social Summary
Categorised B (ESP 2014). The proposed project involves a loan to Mawy Kenar Company for financing the working capital and acquisition of a mobile sludge treatment unit. Mawy Kenar is a provider of environmental remediation services, with specific focus on the clean-up of oil contaminated fields - a legacy of oil production activities in the Balkan region of Turkmenistan. The project activities will take place in brownfield areas within an existing environmental footprint and zone of degradation. The EIA was completed in 2018 by a local consultancy. The ESDD was conducted in-house by ESD and consisted of the review of the completed ESDD questionnaires; national EIA, company's environmental, health and safety procedures and a site visit to a number of operational areas. The ESDD identified that the proposed equipment and process technology are provided by European suppliers, and, as such, should be compliant with relevant industry standards. The company has a Quality, Health, Safety and Environmental policy and procedures in place. Mawy Kenar has an HSE officer in place. While general awareness of health and safety issues is satisfactory, more training will need to be provided to HSE staff in terms of environmental risks and mitigation, and provisions of EBRD PRs 2 and 4. There are Employment Practice and Personnel Policies in place as well as the Code of Business Conduct and Ethics that incorporate principles of diversity, non-discrimination, etc. General provisions for submission and resolution of complaints by employees are contained in the Code of Business Conduct and Ethics. The project will not have any adverse impacts on resources and processing a waste/contaminated soil (part of the circular economy) should bring a positive impact. While the soil in the area is generally not arable and there are no potable underground water reserves, the company has plans to assess the sensitivity of soil resources through Contaminant - Pathway - Receptor chain and ensure treatment of any residual contamination through the use of low-cost methods (potentially a bioremediation) and investigate options for re-using treated soil, for example for construction of local access roads. The company currently has an outline of an emergency plan covering road accidents, fires and explosions, which contain requirements for regular emergency drills. The national EIA contains some baseline data on flora and fauna from academic sources; the implementation of the clean-up is expedient for mitigating of existing impacts on biodiversity. The company has researched in detail with the Hazar Natural reserve to understand the nature and seasonality of birds flying corridors, their stopover, feeding and nesting areas vis-a-vis location of operational/clean-up sites and will develop and implement required mitigation measures to prevent birds' mortality due to the presence of legacy oil pollution. The company has also assessed the risk of oil ingress into the groundwater by using existing geological and hydrogeological data and has plans to implement required prevention and mitigation measures. This positive impact of the clean-up in terms of reducing risks to biodiversity will be further enhanced by the Biodiversity Capacity Building TC the Bank has launched in Turkmenistan. The company will identify local communities and local, national and international NGOs who may be adversely or beneficially impacted by the project or may have an interest in the project and develop their stakeholder engagement strategy along with the community grievance mechanism. The Environmental and Social Action Plan (ESAP) for identified gaps and risks has been fully agreed with the company and the company is making a good progress towards developing required ESAP implementation arrangements. The Bank will monitor the project through review of annual environmental and social reports and periodic monitoring visits.
Technical Cooperation and Grant Financing
TC support for this operation has been provided by the Bank's Shareholder Special Fund with contribution by the Company. The project will have a technical cooperation component during implementation: a capacity building initiative, which promotes re-use of waste as a resource (e.g. Waste to Energy) and which is also in line with EU Reference Documents on Best Available Techniques (EU BREFs) related to Waste Management.
Company Contact Information
Ataturk str. Berkarar Business Centre. 6th Floor. Ashgabat, Turkmenistan
PSD last updated
03 Aug 2020
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Environmental and Social Policy (ESP)
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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.
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