Project Description
A facility that guarantees up to MNT 20 billion (US$ 6.3 million) performance bonds issued to Oyu Tolgoi LLC (OT) copper-gold mining company by GCR Mongolia LLC (GCR) against the its failure to meet the obligations of the contract with OT .
Project Objectives
The project will allow GCR to enter into large scale mining construction contracts with OT and thereby support transfer skills and know-how to the industry.
Transition Impact
ETI score: 64
The project will contribute to the framework objectives by supporting the company in the following areas:
Primary quality "Inclusive": introduce a new replicable and accredited training programme improving skills for 120-140 people from the inclusion target group.
Secondary quality "Competitive": introduce new operational approaches that will significantly improve the efficiency of the client operations.
Client Information
GCR MONGOLIA LLC
GCR Mongolia LLC ("GCR") is a mining contractor company that provides engineering design, procurement and project management services to large scale mining development projects in Mongolia.
It was established in 2017 as a joint venture of three partners including Gobi Infrastructure Partners LLC (later re-organised under Gobi Capital Management LLC), Clough Projects International Pty Ltd and RUC Cementation Mining Contractors Pty Ltd to undertake large scale underground mine construction contracts for Oyu Tolgoi copper-gold project.
EBRD Finance Summary
MNT 20,000,000,000.00
A performance bond of up to MNT 20 billion (US$ 6.3 million) issued by the EBRD to be paid to OT against the failure of GCR to meet its obligations of the contract with OT.
Total Project Cost
MNT 20,000,000,000.00
Additionality
Financing Structure - the EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions, e.g. a longer grace period. Such financing is necessary to structure the project.
Financing Structure - the EBRD offers a tenor, which is longer than available to the client in the market on reasonable terms and conditions.
Financing Structure - the EBRD offers local currency financing on terms not readily available in the market.
Environmental and Social Summary
Category B (2019 ESP). The provision of a performance guarantee to a mining contractor carries little direct E&S risk but the operations of the contractor are related to significant potential environmental and OHS risks. The client completed a detailed EHSS questionnaire on their internal capacity and capabilities in EHSS risk management procedure and practice. The consortium partners in the JV forming the client organisation includes entities with extensive experience of operating to international standards on EHSS. The client's organisation includes personnel with appropriate knowledge and experience, and the risk management structures are appropriate to the risks posed by their operations. The main operations at the Oyu Tolgoi mine are well known to the Bank and Rio Tinto require all contractors to operate to their corporate standards, which are largely aligned with the Bank's PRs. Rio Tinto has an extensive training and monitoring programme for all contractors operating on-site, the monitoring in particular is continuous. Client operations are aligned with the PRs and no ESAP is required for this Project.
Technical Cooperation and Grant Financing
None.
Company Contact Information
Jonon Batdorj
jonon.b@gip.mn
+976-77119797
https://www.gcrmongolia.mn/
New Millennium Building 4F,
15th khoroo, Khan Uul District, Ulaanbaatar 17011, Mongolia
Implementation summary
PSD last updated
26 Oct 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.
