RF - BM Kazakhstan

Location:

Kazakhstan

Project number:

52047

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

12 May 2020

Status:

Disbursing

PSD disclosed:

25 Jun 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$ 25.0 million (€ 23 million) in favour of Borusan Makina Kazakhstan LLP (BMK), a limited liability company incorporated in Kazakhstan, to finance its working capital needs.

Project Objectives

The proposed transaction will provide short-term liquidity to BMK for working capital financing and help maintain its financial stability. The project willl preserve and help achieve transition gains set forth under the project and ensure the availability of short-term working capital financing to BMK, supporting them in overcoming the implications of the COVID-19 pandemic.

Transition Impact

ETI score: 63

The aim of this operation to support BMK's short-term liquidity needs and preserve its financial viability. The Company's financial stance is critical to support the project for delivery of the originally expected Transition Impact.

Primary TI Quality: Inclusive;

Secondary TI Quality: Competitive.

Client Information

BORUSAN MAKINA KAZAKHSTAN LLP

Borusan Makina Kazakhstan LLP ("BMK") is involved in the distribution, sales and service of Caterpillar heavy machinery equipment (excavators, loaders, asphalt pavers, off-highway trucks, and etc.) in Kazakhstan. BMK is a 100 per cent owned subsidiary of Borusan Makina ve Guc Sistemleri Sanayi ve Ticaret A.S. (the "Sponsor" or "BMGS"), which is engaged in the distribution and sales of Caterpillar heavy machinery equipment, power systems, spare parts and provision of related services for these products.

EBRD Finance Summary

USD 25,000,000.00

A senior loan of up to US$ 25.0 million (€23 million) in favour of Borusan Makina Kazakhstan LLP.

Total Project Cost

USD 25,000,000.00

Additionality

COVID-19 crisis response: The impact of the COVID-19 crisis is being seen in liquidity stress for corporate clients as it imposed constraints on commercial banks' lending and renewal of financing facilities. The Bank provides a liquidity facility for short-term liquidity needs of the Borrower, which is not readily available to raise in the capital markets due to the COVID-19 outbreak.

Environmental and Social Summary

Categorised B (2019 ESP). The provision of short-term working capital to BMK is not associated with any new environmental or social risks or impacts. Due diligence for this transaction has comprised review of the Company's response to Covid-19 and progress with implementation of the environmental and social action plan (ESAP) for the Bank's previous project with BMK. BMK formed a dedicated Covid-19 task force and has been implementing crisis management plans to safeguard employees and customers. Adequate measures have been put in place with regards to OHS and HR. In-house E&S due diligence carried out for the previous transaction concluded that the Company is largely compliant with the PRs in key areas such as health and safety, air emissions, waste management, labour and supply chain management. The Company has been making satisfactory progress in implementing the agreed ESAP. This solidarity loan does not require additional monitoring or reporting. The EBRD will continue to monitor BMK environmental and social performance via reporting for the previous transaction. There is no GET component associated with this Project.

Technical Cooperation and Grant Financing

N/A

Company Contact Information

Berna Demir Yegenoglu
bedemir@borusan.com
+902123935563
+902122938882
www.bmgs.com.tr
Gebze Organize Sanayi Bölgesi 1500. Sokak, No: 1501

PSD last updated

25 Jun 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.

 

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