DFF - Ak Hunji

Location:

Turkmenistan

Project number:

51272

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

07 Apr 2020

Status:

Disbursing

PSD disclosed:

13 Apr 2020

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

The provision of a senior secured loan of up to US$ 1.8 million to support the expansion of Ak Hunji, a leading producer of decorative profiles and sandwich panels in Turkmenistan. Part of the loan will finance the Company's working capital needs.

Project Objectives

Ak Hunji is planning to launch the production of decorative floors, ceiling profiles and other elements from Extruded Polystyrene (XPS). The use of XPS will improve quality and durability of the Company's products. The project will help Ak Hunji start exports sales to neigbouring countries.

Transition Impact

ETI score: 80

The DFF SME framework primarily targets the Competitive quality by helping SMEs restructure and become more efficient or professional. Sub-projects can target any of the other transition qualities as a secondary objective. This project is supporting framework objectives by supporting an SME in the following areas:

1. Competitive through an increase in exports and 

2. Well-governed trhough annual verification of the IFRS restated accounts by an independent auditor.

Client Information

AK HUNJI

Ak Hunji (the "Company") is a legal entity registered and operating in Turkmenistan. The Company is a leading producer of decorative profiles, shapes and sandwich panels made of XPS.

EBRD Finance Summary

USD 1,800,000.00

A senior secured loan of USD 1.8 million to finance the Company's capital expenditures and working capital needs.

Total Project Cost

USD 2,371,000.00

Additionality

Financing Structure: (a) Loan tenor is above the market average;

Risk mitigation: (a) the EBRD provides comfort to the client by mitigating non-financial risks.

Environmental and Social Summary

Categorised B (ESP 2014). The production of moulded materials and sandwich panels may be associated with a limited number of environmental and social issues, which can be readily identified and mitigated through appropriate measures. The Company completed the standard environmental and social questionnaire, which was reviewed by ESD. The answers demonstrate on-going compliance with national environmental, health, safety and labour requirements. There are, however, issues which will need to be carefully managed by the Company, particularly health and safety of employees and some lesser environmental issues such as management of wastes.  It is noted that the Company intends to introduce best practice management systems; it had already introduced ISO 9001 for quality last year.  An ESAP will be agreed with the Company to formalise selected actions to ensure that the Project is structured to comply with the Bank's Performance Requirements.  The Company will be required to report annually on environmental and social issues to the Bank and on the implementation of the ESAP.

Technical Cooperation and Grant Financing

(1) Financial Due Diligence, €12,960; (2) Legal Due Diligence, €14,280; (3) Technical Due Diligence, €6,100.

Company Contact Information

Begmuhammet Charyev
marysultanowa@mail.ru
+99365591620
+99352273491
ak-hunji.com
90 Ashgabat Street, Mary, Turkmenistan 745400

PSD last updated

13 Apr 2020

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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