Project Description
The provision of a US$ 5 million senior working capital loan to support a producer of fertilizers, Indorama Kokand, and its existing operations in the production of single and ammoniated superphosphate, ahead of its planned expansion programme into new fertilizer products including potassium based fertilizers.
Transition Impact
ETI score: 63
- Competitive: The Project will bring FDI inflows into the country and the chemicals sector where FDI has been limited.
- Inclusive: The Project will contribute to increased employability of students studying in the relevant industry via internships, as well as capacity building to the Borrower's end consumers in terms of knowledge transfer.
Client Information
INDORAMA KOKAND FERTILISERS AND CHEMICALS JSC
Indorama Kokand Fertilisers and Chemicals is a leading manufacturer of phosphate fertilisers in Uzbekistan. The Company was privatised in June 2019 through the sale of state shares to Indorama Corporation Pte. Ltd. In 2020, the EBRD provided US$ 12.5 million capital expenditure and US$ 10 million working capital loans to support the modernization of the plant.
EBRD Finance Summary
USD 5,000,000.00
Total Project Cost
USD 5,000,000.00
Additionality
The EBRD offers a financing tenor that is not available from commercial banks and its long-term relationship with the borrower provides valued comfort for the company to operate in an otherwise state-dominant sector.
Environmental and Social Summary
Categorised B (ESP 2019). Environmental and social (E&S) impacts associated with working capital for the operation of the existing fertiliser plant are site-specific and readily identified and addressed through effective mitigation measures. Environmental and Social Due Diligence was undertaken internally and consisted of a review of Borrower responses to a questionnaire and associated documentation including E&S policies and procedures, the latest Annual E&S report including Environmental and Social Action Plan (ESAP) status and a recent labour audit report. As an existing client of the Bank, the modernisation and subsequent operation of the facility was subject to previous ESDD and implementation of the existing ESAP has generally proceeded on track. The Sponsor's corporate policies including Environment, Health and Safety, Human Rights and Climate and related Borrower level procedures are largely aligned with the EBRD Performance Requirements with some areas that require improvement at the site level to align with the 2019 PRs. This includes upgrading the current supply chain management procedure to align with a management systems approach, to cover all suppliers and develop a risk based approach to supplier due-diligence and monitoring. Improvements are required to the workforce grievance mechanism to handle complaints related to Gender Based Violence and Harassment (GBVH) as well as the systematic logging and management of community complaints and update and disclosure of the Stakeholder Engagement Plan, including the community grievance mechanism. The ESDD has identified that the existing facility has been modified recently to include production of a new fertiliser product and the Borrower has undertaken a management of change and confirmed that the air emissions limits are still within the limits defined by EU requirements. A review of the Borrower's environmental and safety assessment for this process change will need to be undertaken by an independent consultant to confirm alignment with the relevant PRs and recommend any additional mitigation measures if required. In addition, the client will be required to engage experienced expert for the next labour audit of the facility to ensure gaps related to implementation of PR2 requirements are identified and appropriate corrective actions developed and implemented. The Borrower will be required to continue to submit Annual E&S reports to the Bank.
Technical Cooperation and Grant Financing
No associated grants, TCs and non-TCs are involved.
Company Contact Information
Ganesh Chaudhary
Ganesh. Chaudhary@ indorama.com
https://indoramakokandfertilizer.com/
PSD last updated
10 May 2023
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.
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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.
