Eastcomtrans Loan

Location:

Kazakhstan

Project number:

51345

Business sector:

Transport

Notice type:

Private

Environmental category:

B

Approval date:

08 Jul 2020

Status:

Concept Reviewed

PSD disclosed:

26 May 2020

Project Description

The provision of a 7-year senior secured loan of up to US$ 24 million equivalent to Eastcomtrans LLP (the "Company"), the largest private rolling stock operator in Kazakhstan.

Project Objectives

The loan contributes to the refinancing programme conducted by the Company and aims to reduce the exposure to foreign exchange related risks and to optimise the maturity profile of the Company's existing debt (the "Project").

Transition Impact

ETI score: 60

The Transition Impact is expected to derive from "inclusive" and "well-governed" qualities.

Namely, the Project will introduce a new, replicable and nationally accredited training programme to equip up to 100 young people with better professional skills in partnership with a local vocational school or university.

Also, the Company will develop and adopt contingency plans aiming at the enhancement of resilience to external shocks and better crisis management systems.

Client Information

EASTCOMTRANS LLP

Eastcomtrans LLP is a private railway operator domiciled in the Republic of Kazakhstan. The Company owns and leases over 12,000 wagons with an average age of below 10 years.

EBRD Finance Summary

USD 24,000,000.00

Total Project Cost

To be determined (TBD)

Additionality

COVID-19 pandemic and market disruption made commercial lenders more sensitive to actions of other investors. The Bank's participation in refinancing efforts of the company provides comfort to other lenders and reduces uncertainty, filling the financing gap on the market.

Environmental and Social Summary

Categorised B (ESP 2014). The proposed Project involves a refinancing programme conducted by Eastcomtrans LLP, which aims to reduce exposure to foreign exchange risks and to optimise the maturity profile of some of the Company's existing debt. Eastcomtrans LLP is a private railway operator domiciled in the Republic of Kazakhstan. The Company owns and leases over 12,000 wagons with an average age of below 10 years. Eastcomtrans LLP is an existing client of the Bank since 2014 and the ESDD was therefore focused on review of existing ESDD questionnaire and annual environmental and social reports, including the Company's annual reports to the Bank on ESAP implementation.

The environmental and social due diligence on the original transaction, undertaken by the ESD team, identified that the Company has robust environmental, process and labour safety procedures in place. Clauses on compliance with relevant environmental, health and safety requirements are included in contractual documentation.  The Company has assigned health and safety responsibilities to a number of managers and employees, and regularly provides health and safety training to its workers and an induction for all new employees.  The  previously  agreed ESAP contains measures aimed at streamlining existing health and safety provisions along with environmental procedures into an integrated management system to benchmark the performance of the Company against relevant national and international standards as well as applicable Performance Requirements; developing a system for tracking the use of railcars against agreed route, cargo type and volume; and developing a procedure for registering accidents and incidents and development of a grievance mechanism for employees.

The Company has fully implemented the ESAP and submits satisfactory reporting on environmental and social issues. The company makes in-house evaluation of the third-party depots to ensure their compliance with licensing, HSE requirements, environmental policies and procedures, hazardous waste management and utilisation and other issues. ESD is in regular contact with the Company and provided them with guidance for any potential future retrenchment. The ESDD on current transaction identified that the Client has in place a robust business continuity plan and follows strict procedures related to the containment of COVID pandemic in line with the WHO and national regulations. Current situation related to COVID restrictions will not have any adverse impacts on implementation of the previously agreed ESAP and general compliance with the EBRD environmental and social requirements. Adequate HSE resources are in place and at the moment there is no retrenchment of personnel.

The Bank will regularly monitor the Project through review of annual environmental and social reports and any additional information as may be required.

Technical Cooperation and Grant Financing

None.

Company Contact Information

Aida Yelgeldiyeva
yelgeldiyeva@ect.kz
+7 727 355 5111 (ext.801)
www.ect.kz

PSD last updated

26 May 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 how to submit a Request for review through our confidential online form, by emailmail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requesters’ identities may be kept confidential, upon request.

 

Share this page: