DFF - Agromar

Location:

Turkmenistan

Project number:

51693

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

03 Nov 2020

Status:

Disbursing

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 US$ 2.5 million senior secured loan to ES "Milli Hasyl" to support the expansion of the existing hydroponic greenhouse business from the current 5.2 hectares to 10.2 hectares.

Project Objectives

The Project will support the installation of new hydroponic greenhouses and fitting them with an advanced cooling system allowing a longer cultivation season / additional harvest. 

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 secondary objective. This Project is supporting framework objectives by supporting an SME in the following areas: Competitive and Green.

Client Information

MILLI HASYL ES

The Borrower is a limited liability company incorporated and operating in Turkmenistan and engaged in the production of greenhouse tomatoes.

EBRD Finance Summary

USD 2,500,000.00

US$ 2.5 million senior secured loan to ES "Milli Hasyl".

Total Project Cost

USD 6,910,000.00

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 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. Hydroponic greenhouses are recognised as having a number of advantages over conventional methods of agriculture particularly in terms of water savings. E&S due diligence for this project included the completion of a questionnaire by the Company and follow up with the Company clarify key issues. The Company has also participated in a TC-funded health and safety (H&S) project which included site visit to the Company 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 H&S action plan and the Bank's PRs and report annually on E&S issues.

Technical Cooperation and Grant Financing

1. Review and Restatement of Financial Statements Consistent with IFRS: € 13,000. Funding source: EU-EBRD SME Finance Facility for CA- Phase 2.
2. Legal due diligence: €28,160. Funding source: EU-EBRD SME Finance Facility for CA- Phase 2 and GET Framework.

3. Technical due diligence on verification of construction expenditures: €R 6,100. Funding source: EU-EBRD SME Finance Facility for CA- Phase 2.
4. Green International Advisory project: € 60,000. Funding source: EU IFCA through the EBRD Advice for Small Businesses in Turkmenistan programme and € 30,000 GEF through the EBRD Finance and Technology Transfer Centre for Climate Change (FINTECC) programme.
5. Occupational Safety and Health Support in the Agribusiness Sector in Turkmenistan: € 39,000. Funding source: Shareholders Special Fund.

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

Mr Toyly Amansahatov
toyly.amansahatov@mail.ru
+99361006611
+993 12 754555
www.agromarglobal.com
744000, Turkmenistan, Ashgabat, Geldi Bashiev street, No. 93

Implementation summary


PSD last updated

11 Nov 2020

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

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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 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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