DFF - Gemza Group

Location:

Azerbaijan

Project number:

53015

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

09 Nov 2021

Status:

Signed

PSD disclosed:

11 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

The provision of a Senior secured loan of up to € 8.0 million to Gemza Group LLC with the proceeds to be used for capital expenditure and working capital needs.

Project Objectives

The Project will enable the Group to (i) expand local production capacity, (ii) manufacture more complex spare parts, and (iii) widen the range of maintenance, repair & overhaul services. It will also allow Gemza to carry out ongoing and pipeline projects.

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 following areas: "Competitive" and "Well-governed".

Client Information

GEMZA GROUP LLC

Gemza Group LLC, together with its sister companies, supplies rotating equipment, manufactures spare parts and provides repair, maintenance and overhaul services for the rotating equipment (pumps and valves), in Azerbaijan, CIS Region, UAE and Turkey.

EBRD Finance Summary

EUR 8,000,000.00

Total Project Cost

EUR 8,000,000.00

Additionality

Additionality stems from the tenor and repayment structure of the proposed loan, which is necessary to undertake the capex programme that includes the procurement of the manufacturing equipment for the new production workshop. Local banks mostly provide shorter tenor loans with restrictive repayment schedule (amortizing structure without grace period) that limits the company's capacity to implement the investment programme.

Environmental and Social Summary

Categorised B (ESP 2019). The ESDD was conducted on the basis of a review of the E&S questionnaires completed by the Client. The ESDD identified that the Client has certified environmental, health and safety, energy and quality management systems in place. The Client aims to implement resource efficiency measures through its operations. The Client has an approved list of suppliers and checks the availability of ESG policies. Sufficient environmental, health and safety personnel are employed. The Client also has a Human resources Policy and a grievance mechanism in place. The construction of the workshop and the supply of engineering, maintenance and repair services to third parties are not associated with any significant impacts and any impacts can be readily mitigated through implementation of the management systems. The land plot required for construction of the maintenance and repair workshop was acquired through a negotiated settlement and no physical or economic displacement occurred. The Project will not trigger any impacts on biodiversity or cultural heritage. While there is no formal stakeholder engagement plan in place, the information on the Company's activities are published on the corporate website. There is no GET share associated with this Project. The Project is considered to be Paris-aligned for climate-adaptation. The Client will need to comply with the Bank's Performance Requirements and submit annual environmental and social reports to the Bank.

Technical Cooperation and Grant Financing

Not yet confirmed. 

Company Contact Information

Anar Gaziyev
info@gemza.az
+994123770200
www.gemza.az
Alasgar Gayibov , 10, Baku, Narimanov AZ1029, AZ, Baku/Azerbaijan

PSD last updated

11 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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