Azmeco

Location:

Azerbaijan

Project number:

38568

Business sector:

Natural resources

Notice type:

Private

Environmental category:

B

Approval date:

21 Oct 2009

Status:

Cancelled

PSD disclosed:

19 Aug 2009

Project Description

The EBRD is considering providing financing of up to USD 120 million to Azmeco to allow for the purchase, construction and operation of an approx. 561,000 tonne p.a Methanol Plant including the possibility of a CO2 Capture Unit. AzMeCo intends to include urea and ammonia production in future development phases

Transition Impact

i) introduce new and proven technology to Azerbaijan with respect to the construction and operations of the methanol plant,
ii) setting standards of corporate governance, transparency and environmental conduct:

The Client

Azerbaijan Methanol Company (“AzMeCo”or “the Company”) is a limited liability company created specifically to own and operate the plant.

EBRD Finance

Up to USD 120 million financing with 2 separated tranches:

  • a USD 90 million senior loan up to 9 years;
  • a USD 30 million Senior Performance-Linked Financing fully re-paid in year 10.

Project Cost

Over USD300 million.

Environmental Impact

Screening category

The potential environmental and social impacts of the project are site specific and can be readily addressed through mitigation measures. Therefore, the project has been screened B/1 in accordance with the EBRD Environmental Policy (2003).

Environmental and social issues

An Environmental Analysis of the proposed project and an Environmental Audit of the existing facilities were carried out by independent consultants in 2008.

One of the results of the audit was that the soil and groundwater at the project site was found to be contaminated with arsenic. The Company promptly put in place the necessary actions proposed by the Consultants to improve the environmental and safety conditions during the ongoing construction activities (personnel protective equipment, handling and disposal of contaminated soils, wastes, etc.). Other areas that were identified as needing attention were air emissions, waste management, community interaction, and emergency preparedness and response. Mitigation measures have been agreed for those issues.

The results of the due diligence indicates that the plant was designed to operate to international standards, and therefore operation of this plant with the provisions of the EAP will ensure that the project complies with National and pertinent EU environmental standards. The Bank has reviewed the potential for an accident or emergency situation, and, the company will complete a series of studies and plans (including development of emergency response plans, HAZOP studies, monitoring plans, etc.) to minimise these risks to the extent possible. The Bank will review these studies when completed.

Summary of Environmental and Social Action Plan

An Environmental Action Plan (EAP) has been developed as part of the due diligence process. The main items addressed in the EAP can be summarized as follows:

  • The EAP requires an EHS Policy and an EHS Management Plan to be developed and implemented prior to start of works. The Policy and Management Plan has already been developed and started to be implemented
     
  • A comprehensive waste management plan and hazardous material handling procedures will be developed and implemented to improve waste management and hazardous material handling activities at the site, covering both the construction and operations phase of the project.
     
  • There are several processes included in the project that have the potential to result in emissions to atmosphere. The EAP includes actions to limit these emissions including the use of vapour recovery units. Dust suppression during construction is also addressed in the EAP.
     
  • An Environmental Monitoring Plan, schedules and processes will be developed and implemented as required by the Environmental Audit and Analysis Report.
     
  • Detailed environmental mitigation plan will be developed in accordance with the general direction given in the environmental due diligence reports and IFC Guidelines;
     
  • A comprehensive training programme for the EHS management staff will be developed.
     
  • The company has not completed any community interaction to date since this is not required by national law. The EAP includes provisions providing information to the local population.
     
  • There are several elements of emergency planning that require improvements and actions, including spill prevention program, environmental response for chemical release, chemical hazard planning and leak detection and repair, fire and explosion prevention and major accident prevention planning in accordance with the requirements in the EU Major Accidents Hazard Directive. The EAP includes the list of actions required for each of these items and the client has agreed that these will be completed before plant start up.

The Environmental Review Summary has been placed at the following locations accessible to public:

  • AzMeCo Head Office, 28 May kuc., 5 Baku Azerbaijan
  • AzMeco Construction Site, Garadagh District, Salyan Highway Baku Azerbaijan
  • AzTurkGas LTD gas plant, Garadagh District, Salyan Highway Baku Azerbaijan
  • The Baku Weighting Materials OJSC plant, Garadagh District, Salyan Highway Baku Azerbaijan
  • Garadagh Executive Authority
  • Company’s website at http://www.azmeco.com

 

Technical Cooperation

None.

Company Contact

Sertaç Yener, CFO, AzMeCo
E-mail: Sertac.Yener@AzMeCo.com
Tel: +994 125983540

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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 how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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