Senior secured loan of up to USD 10.6 million (EUR 9.8 million) to Akabe LLC.
The company is seeking financing for (i) the reorganization of the balance sheet through refinancing of its short-term loans, (ii) increased working capital needs to respond to the challenging market environment and (iii) the construction of a warehouse and auxiliary facilities.
ETI score: 80
The DFF SME framework primarily targets the "Competitive" quality by helping SMEs to restructure and become more efficient or professional. Sub-projects can target any of the other transition qualities as secondary objective. The project is supporting framework objectives by supporting an SME in the following areas: "Competitive" and "Resilient".
Akabe LLC is a retailer of ceramic tiles and home improvement products in Azerbaijan.
EBRD Finance Summary
Total Project Cost
Additionality stems from tenor and repayment structure of the proposed loan, which is necessary to undertake the capex programme for construction of the warehouse. Local banks mostly provide shorter tenor loans with restrictive repayment schedule (amortizing structure without grace period) that limits the company's capacity to implement investment programme.
Environmental and Social Summary
Categorized B under ESP 2014 (Low to Medium Risk). In-house Environmental and Social Due Diligence (ESDD) has established that investments into the working capital and warehouse construction for the distributor of ceramic tiles, bathroom furniture and accessories are associated with site-specific and moderate E&S risks and impacts that will be managed through the implementation of the Environmental and Social Action Plan (ESAP) that has been fully accepted by the client.
ESDD included the completion of a detailed corporate ESDD questionnaire by the company, and follow-up Q&As. ESDD has been established that the company has some elements of the Environmental and Safety Management Systems in place and staff dedicated to the coordination of these issues. The company is in compliance with the national legislation and the project can be structured to meet EBRD ESP requirements.
There has been, however, a number of ESP gaps identified, such as insufficient supply chain and contractor management, lack of the robust Environmental and Social Management systems, stakeholder engagement and grievance management.
An ESAP has been prepared and agreed with the company covering all aspects of the Bank's Performance Requirements including further improvement of the Environmental, Social, Health and Safety management systems, inter alia, appointment of the dedicated EHS coordinator, review and update of the HR procedures, implementation of supply chain management, fire safety, construction safety and, workers and community safety, stakeholders engagement.
The client will be required to provide the Bank with annual reporting on the implementation of this ESAP and on any other environmental and social issues arising in the year.
Technical Cooperation and Grant Financing
Legal due diligence to be financed 80% by "EBRD Shareholder Special Fund" and 20% by the company.
Company Contact Information
Binagadi highway 12, Rasulzade settlement, Baku, Azerbaijan
PSD last updated
29 May 2020
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Independent Project Accountability Mechanism (IPAM)
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