DFF - Ak Gap Conversion

Location:

Turkmenistan

Project number:

52145

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

C

Approval date:

23 Jun 2020

Status:

Signed

PSD disclosed:

06 Jul 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

Provision of USD 2,500,000 to finance the upgrade of existing equipment for the production of PET pre-forms and screw caps (the "project").

Project Objectives

The main objective is to invest in equipment upgrade which will allow the production of new type and lighter weight pre-forms and screw caps.

Transition Impact

ETI score: 80

1.The project will allow the borrower to convert its production line to manufacture lighter PET performs and caps thus saving on the raw material used resulting in improvements in profitability and contributing to the Competitive quality.
2. As part of the project, the company will be able to increase the production capacity of screw caps. The increased capacity opens up an opportunity for the screw caps exports to the neighboring countries contributing to the Integrated quality.

Client Information

AK GAP ECONOMIC SOCIETY

Economic Society Ak Gap ("Ak Gap", the "company" or the "borrower") is the leading producer of PET preforms in Turkmenistan and through its 50%-owned subsidiary, Turkmen Penjire, it is the local manufacturer of PVC profiles (collectively referred to as the "Group").

EBRD Finance Summary

USD 2,500,000.00

A senior secured long-term loan of USD 2,500,000 million for financing of the Group's capital expenditure.

Total Project Cost

USD 3,500,000.00

Total project costs are USD 3,500,000 of which USD 2,500,000 will be provided by the EBRD and the remaining USD 1,000,000 by the Borrower through internally generated cash.

Additionality

EBRD is providing financing in USD, which is scarce in the local market and with a loan tenor (of three years) which is longer than other available offers on the local market.

Environmental and Social Summary

Categorised C (ESP 20190). The Company is a long standing client of the Bank and performance to date has been satisfactory. An in-depth environmental and social due diligence has been undertaken by the EBRD throughout the past ten years of relationship with the Company, resulting in the drafting of an environmental and social action plan with a particular focus on health and safety issues. The Company has since been providing reporting on both general compliance with EBRD's PR requirements and with the agreed ESAP. All items on the ESAP have been completed nearly all within the time frames agreed with the Company. As a supplier to some of the largest soft drinks and bottled water producers globally, the Company is also subject to a number of environmental and social audits to ensure that the Company complies with the stringent supplier requirements.

Technical Cooperation and Grant Financing

The Project will have a Technical Cooperation (TC) component provided by SME F&D - EU (Investment Facility for Central Asia IFCA). The TC funds will partially cover the legal due diligence costs.

Company Contact Information

Orazmammet Annagurbanov
akgap69@gmail.com
+993 12 295 772
Economic Society "Ak Gap" 171 Taze Zaman Ashgabat Turkmenistan

PSD last updated

06 Jul 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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