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.
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.
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
Total Project Cost
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@ indorama.com
PSD last updated
10 May 2023
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