Project Description
The provision of a US$ 23 million senior secured loan to LLC Meros Pharm, one of the largest private wholesale pharmaceuticals distribution companies in Uzbekistan
Project Objectives
The project supports the Meros Pharm's growing working capital needs associated with its organic growth and expansion to the regions to provide a wider portfolio of branded high quality and affordable medication.
Transition Impact
ETI score: 69
- Inclusive: project will help the company establish a training academy to improve skills-related needs of its core operational personnel.
- Competitive: the company will introduce Good Distribution Practice (GDP) standards for the new warehouses, which will ensure that the quality and integrity of medicines is maintained throughout the supply chain.
Client Information
MEROS PHARM LLC
LLC Meros Pharm is one of the largest private wholesale pharmaceuticals distribution companies in Uzbekistan. It is the main operating and revenue generating company within the Meros Group, a leading vertically integrated pharma group in Uzbekistan covering the entire value chain from production to wholesale distribution and retail.
EBRD Finance Summary
USD 23,000,000.00
Total Project Cost
USD 23,000,000.00
Additionality
The EBRD offers financing not available from commercial banks and helps achieve higher standards including financial reporting and equal opportunities for employees.
Environmental and Social Summary
The Project has been categorised B in line with 2019 ESP. Environmental and social risks related to operation of the pharmaceutical distribution company and warehouse facilities are site specific and can be managed by appropriate mitigation measures. The Environmental and Social Due Diligence (ESDD) was carried out by Environment and Social Department through review of E&S questionnaire and information gathered by the Pharmaceuticals Sector Specialist during site visits and meetings with Company management in July and December 2022.
The Company implemented ISO 9001 quality management systems and has been certified to GDP for Pharmaceutical Products by the Agency on Development of Pharmaceutical Industry of Uzbekistan since 2022, with all its 5 operational warehouses compliant. This is considered as exemplary within pharma sector of Uzbekistan.
While Company's management, with their international experience, have been focused on implementation of quality standards, they understand that E&S considerations need improvement and systematic approach.
The Company has not established formal Environmental policy, however it addresses its key environmental risks related to waste management and expired drugs utilisation in line with national legislation and GDP. Improvements in regards to reuse and recycling of packaging waste has been addressed under Environmental and Social Action Plan (ESAP).
The Company will need to strengthen its H&S management systems through appointment of suitably qualified H&S manager and implementation of systematic approach to managing H&R risk in line with ISO 45001. This effort should be supported by an external H&S consultants, support the Company in occupational H&S training, risks assessments and occupational monitoring. The Company should develop a corporate H&S Handbook outlining company standards and good practices. This will also address the risks related to management of Company's more than 100 car fleet. All of the above H&S improvements are covenanted in the ESAP to be agreed with the Company before signing.
The Client employs ca. 1,000 employees (21 per cent female). The ESDD identified improvements required to the HR policies and procedures, including those covering retrenchment, workers organisations and grievance mechanism. As the Project is supported by TC committed to staff training and development, it will be explored if the same consultant may support the Company in addressing the above risks in line with PR2 and ESAP actions.
As the Company is in the rapid growth phase it also needs to improve its Contractor Management practices with development of standard E&S requirements, monitoring and capacity raising of in-house engineers in regards to Contractors EHS performance.
ESAP has been developed and will be agreed with the Company prior to the signing. The Bank will monitor the Project and the ESAP implementation through review of Annual E&S Reports and site visits as required.
Technical Cooperation and Grant Financing
€ 20,000 supported by the Japanese-EBRD Cooperation Fund to cover 50 per cent of associated legal due diligence costs;
€ 66,096 from the Shareholder Special Fund to improve the Company's financial reporting practices and prepare first-time audit;
up to € 100,000 to establish a training academy, supported by the Action for Equality and Gender Fund or by the Shareholder Special Fund.
Company Contact Information
Suhrob Pulotov
suxrob.pulotov@merospharm.uz
+998 97 915 40 25
www.merospharm.uz
1/5 Beruniy street
Samarkand, 140100
Republic of Uzbekistan
PSD last updated
10 May 2023
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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More information on the EBRD’s practices in this regard is set out in the ESP.
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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.
