BM Kazakhstan 2

Location:

Kazakhstan

Project number:

53689

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

07 Sep 2022

Status:

Concept Reviewed

PSD disclosed:

25 May 2022

Project Description

The provision of a senior unsecured loand of up to US$ 60 million to Borusan Makina Kazakhstan LLP (BMK), a distributor ans seller of heavy machinery and the EBRD's existing client. The loan will be provided in two tranches of US$ 30 million each.  

Project Objectives

The loan will be used to fund the BMK's 2022-2023 captila expanditure plans (including expansion of component rebuild centre in the city of Karaganda and the acquisition of new equipment) as well as for working capital needs.

Transition Impact

ETI score: 65

Transition impact is expected to derive from: 

Primary Quality: Green

Secondary Quality: Inclusive

Client Information

BORUSAN MAKINA KAZAKHSTAN LLP

Borusan Makina Kazakhstan LLP 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., 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 60,000,000.00

A senior loan of up to an equivalent of US$ 60 million (€57 million) to Borusan Makina Kazakhstan LLP, the Bank's existing client. The Loan is planned to be provided in in two tranches of US$ 30 million (€28.5 million) each. The loan will be fully guaranteed by the Turkey based parent Borusan Makina ve Guc Sistemleri Sanayi ve Ticaret A.S.

Total Project Cost

USD 60,000,000.00

Additionality

The EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions, i.e. longer tenor for WC loan and US dollars and Kazakhstan tenge denominated loans. 

Client makes use of the EBRD expertise for the adoption of gender standards and/or equal opportunities action plans (e.g. improving women's access to safe transport and/or women-led businesses participation in the client supply chain).

 

Environmental and Social Summary

Categorised B with Low-Medium risk (ESP 2019). 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 environmental and social risks associated with this transaction are related to land acquisition due to additional physical expansion of the existing facility, potential past land contamination issues, supply chain, contractors' management, labour, working conditions in the new operational workshops, occupational health and safety, traffic management and stakeholder engagement. The project is assessed as Paris aligned for climate mitigation as it features in the joint MDB "aligned list". The Physical Climate risk score for the project is 1 as the counterparty is considered highly diversified as it operates at several geographical locations, across multiple business lines with no significant concentration in its customer base.

Technical Cooperation and Grant Financing

Technical Cooperation on Inclusion - equal opportunities

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 May 2022

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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