DFF - Hilli Gaplama

Location:

Turkmenistan

Project number:

51477

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

10 Nov 2020

Status:

Approved

PSD disclosed:

11 Nov 2020

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

The provision of a senior loan of up to US$ 2.7 million to support the expansion of a strawberry greenhouse owned by ES Hilli Gaplama, a limited liability company registered in Turkmenistan. The increased greenhouse will annually yield 300 tonnes of berries vs. 58 tonnes, which are expected to be harvested in 2020. The Project will be implemented in two phases.

Project Objectives

The project will enable ES Hilli Gaplama to increase its output, improve its operational efficiencies and increase its market share.

Transition Impact

ETI score: 80

The DFF SME framework primarily targets the Competitive quality by helping SMEs to restructure and to become more efficient or professional. Sub-projects can target any of the other transition qualities as the secondary objective. The majority of projects typically support the Well-governed quality by helping companies improve their financial management, or the Green quality by facilitating energy efficiency or environmental improvements.

Client Information

HILLI GAPLAMA ES

ES Hilli Gaplama (the Company), a limited liability company registered in Turkmenistan. It is part of a group, which includes ES Ter Onum ("Ter Onum") and three entrepreneurs: B. Ravshanov, D. Ballyev and D. Garayev (referred to as "the Group"). The Group is a food supply chain that focuses on perishable fresh produce (vegetables, fruits, berries) and non-perishable products (grain, nuts and snacks).

EBRD Finance Summary

USD 2,700,000.00

Senior secured loan of up to US$ 2.7 m (the Loan) to the Company, divided into committed tranche of US$ 1.7m million (Tranche 1) and uncommitted tranche of US$ 1.0 million (Tranche 2) to finance the phased expansion of the greenhouse. Commitment of Tranche 2 will be subject to completion of Phase 1 of the Project, is at sole discretion of the Bank and is delegated to Management.

Total Project Cost

USD 5,400,000.00

Additionality

1. Financing structure: The EBRD offers financing that is not available from commercial sources on reasonable terms and conditions, e.g. a longer grace period that is rarely available in the market, restricted  financing in foreign currency etc. The local banks (1) are not able to offer US$-denominated loans; t (2) rarely provide loans with a tenor longer than 3 years and (3) tend not to allow grace periods.

2. Risk mitigation: The EBRD provides comfort to clients and investors by mitigating non-financial risks, such as country, regulatory, project or economic cycle risks.

3. Standard-setting: helping projects and clients achieve higher standards: Client seeks/makes use of the EBRD expertise over energy and resource efficiency and climate resilience financing via provision of energy and climate audits, minimum performance standards of technologies, climate related strategies and policies, monitoring, reporting and verification (MRV) systems etc.

Environmental and Social Summary

Categorised B (ESP 2019). The installation and operation of hydroponic greenhouse is associated with a number of environmental and social (E&S) issues although these can be readily addressed through standard mitigation measures.  ESD notes that hydroponic greenhouses have a number of advantages over conventional methods of agriculture particularly in terms of water savings. E&S due diligence included the completion of a questionnaire by the Company and a selection of follow up questions to clarify key issues.  The Company has also participated in a TC-funded health and safety project which included site visit by third party H&S experts and the development of a dedicated H&S action plan.  Due diligence has confirmed that the Company has adequate staffing and procedures in place to manage E&S issues in accordance with national requirements and the Bank's PRs.  The Company will be required to comply with the agreed action plan and the Bank's PRs and report annually on E&S issues.

Technical Cooperation and Grant Financing

(1) Financial due diligence (DD): EUR13.3K; EU IFCA via the EBRD ASB; (2) Legal DD: EUR 1.5K; SME Finance Facility for Central Asia, Phase 2/Special Shareholder Fund ("SSF"); (3) Technical DD: €6.500; SME Finance Facility for Central Asia, Phase 2/SSF. The Company will cover 25 per cent of costs. (3) Green international advisory: €90.000 to improve the organisation and sales, introduce innovative approaches, identify technologies/practices to reduce the environmental footprint; EU IFCA via the EBRD ASB and the EBRD Finance and Technology Transfer Centre for Climate Change (FINTECC). Client contribution: 10 per cent. (4) Investment Grants (Non-TC): Support from the FINTECC; the GEF, SSF and the EU for US$300.000 (FINTECC with US$1.2 million headroom available out of US$ 1.3 million allocation for climate adaptation technology projects in the ETC. This project was approved in the context of the Bank's response to the Covid-19 pandemic. To avoid delays to the delivery of this project, the Bank's President granted a deviation from the ordinary timelines for PSD disclosure, as contemplated by Section V of the Directive on Access to Information.  Details of the Bank's response to Covid-19, and this deviation, can be found on our website.

Company Contact Information

Batyr Ravshanov
bravshanov@gmail.com
+99365860504
79 Beyik Saparmyrat Turkmenbashy Shayoly, 744000 Ashgabat, Turkmenistan

PSD last updated

02 Dec 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
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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.

 

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