DFF - Universal Pro

Location:

Azerbaijan

Project number:

52598

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

30 Nov 2021

Status:

Passed Concept Review, Pending Final Review

PSD disclosed:

29 Nov 2021

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

Senior secured loan of up to USD 3.5 million (EUR 3.1 million) in local currency equivalent to Universal Pro LLC for the development of a four-storey B class office building with gross leasable area of 3,700 square meters.  

Project Objectives

The project will allow the Universal Pro to create a diversified cash flow stream from the property segment by capitalizing on the growing demand for modern office spaces in central districts of Baku.  

Transition Impact

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 areas of "Competitive" and "Well-Governed".

Client Information

UNIVERSAL PRO LLC

Universal Pro LLC is one of the leading companies in Azerbaijan for distribution of construction materials and industrial tools. 

EBRD Finance Summary

AZN 5,950,000.00

Total Project Cost

AZN 6,800,000.00

Additionality

Additionality stems from tenor and repayment structure of the proposed loan, which is necessary to undertake the capital expenditure programme for construction of the office centre. 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

Categorised B (ESP 2019) Environmental and social issues associated with the construction and operation of a four-storey office building building are site specific and will be addressed by adequate mitigation measures. Environmental and social due diligence (ESDD) has been carried out by the EBRD's Environment and Sustainability Department internally, including reviews of the completed E&S Questionnaire and documents provided by the client. The ESDD showed that the project has obtained the permits required by the national law. The site and project are not associated with significant environmental and social issues. The client is in compliance with national E&S regulations. An Environmental and Social Action Plan (ESAP) has been developed to ensure the project's compliance with the Bank's Performance Requirements (PRs). For the project, the company is required to comply with relevant PRs as well as submit an annual E&S report. 

The ESDD showed the following: the project is located in an urbanised area, previously used as parking area of a nearby shopping centre with no past contamination issues. The project and the site are not associated with resettlement and economic displacement or other land acquisition issues as the project site was acquired by the client from another private entity. The ESAP developed for the project addresses environmental and occupational health & safety management and capacities, the third party life and fire safety audit and public and employee grievance mechanism. The Bank will monitor the project's environmental and social performance by reviewing an annual environmental and social report as well as site visit if deemed necessary.

Technical Cooperation and Grant Financing

1. Commercial, Technical Due Diligence and Valuation to be financed 100% by the EBRD Shareholders' Special Fund.

2. Legal Due Diligence to be financed 60% by the EBRD Shareholders' Special Fund and 40% by the Company. 

Company Contact Information

Ismayil Aliyev
i.aliyev@universalgroup.az
+994515550555
http://www.universal-az.com/web/
Izmir street 8, Hyatt Tower 3

PSD last updated

29 Nov 2021

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 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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