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.
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").
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.
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
Total Project Cost
To be determined (TBD)
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
Company Contact Information
+7 727 355 5111 (ext.801)
PSD last updated
26 May 2020
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Independent Project Accountability Mechanism (IPAM)
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