Through the proposed financing, the Bank will contribute to transition impact in three areas:
(1) Setting high standards of transparency and environmental and health and safety (EH&S) conduct: The Bank will work with Centerra to ensure continued vigilance with respect to not only its existing operations, but also within its future funded projects.
(2) Transfer of knowledge and skills: in the Kyrgyz Republic and Mongolia: the Bank will support the introduction of new technology and development of SMEs working in the region.
(3) Support the development of the Extractive Industries Transparency Initiative in the Kyrgyz Republic.
Centerra Gold Inc., the largest Western-based gold producer in Central Asia, listed on the Toronto Stock Exchange.
US$ 150 million revolving credit facility.
US$ 150 million.
This project has been Categorised B in accordance with EBRD 2008 Environmental and Social Policy. As the Project involves a revolver facility, the Bank is restricting the use of funds to corporate acquisitions within the Countries of Operation (CoO) and capital expenditure projects or working capital with respect to operational facilities with the CoO. Environmental and social due diligence carried out prior to Board Review of this Project therefore focussed on the current operational facilities and the corporate Environmental, Health & Safety and Social risk management capacity. Environmental, Health and Safety and Social audits of the Kumtor mine in Kyrgyzstan and the Gatsuurt and Boroo properties in Mongolia were conducted in late 2009 (Kumtor) and summer 2010 (Mongolia) by an independent environmental consultant retained by the Bank. The Bank has a relationship with the Centerra operations at the Kumtor facility which dates from the 1990s and numerous visits have been carried out during this time to view these operations. The main findings of the due diligence were that the operational facilities were generally in compliance with the Bank’s Performance Requirements and that the Company was operating in line with the principles of International Best Practice.
A number of areas for potential improvement were identified during the due diligence site visits, which resulted in specific mitigation measures or other actions being included in Environmental and Social Action Plans (ESAPs), which were drafted for the Kyrgyz and Mongolian operations. At the Mongolian operations, these actions included the strengthening of the corporate management capacity, upgrades to waste management protocols and implementation of Stakeholder Engagement practice. At the Kumtor facility, the elements include enhancements to Stakeholder Engagement practice, the management of waste rock dump facilities including the cessation of the practice of disposing of waste rock direct onto glaciers, monitoring of the Petrov glacial lake and engineering review of infrastructure below the lake, and review of Emergency Response procedures. The ESAP has also incorporated the implementation of procedures in line with the International Cyanide Management Code.
Since the time of the Project being approved by the Bank’s Board, a series of monitoring visits have been carried out to view operations and review progress against the items agreed in the ESAP. These visits have included Kumtor (2011, 2013 2014 and 2015); Boroo and Gatsuurt (2012 and 2015); and Oksut (2013 and 2015). Oksut represents the Company’s exploration territory near the city of Kayseri in Turkey. The Bank continues to be satisfied with the level of EHSS management at the corporate and operational levels and appropriate progress has been made in regard to the ESAP action items. At Kumtor, the practice of placing waste rock on glaciers has ceased and significant improvements in waste handling procedures have been seen over the period of the Project; while Stakeholder Engagement has been strengthened in Mongolia. It has been noted that the Company has made other improvements to Environmental and Social Risk Management outside the scope of the ESAP with for example, the community engagement and social investment programmes associated with Kumtor being significantly strengthened.
For future use of Revolver funds on specific investments, the Company is required to liaise with the Bank prior to the investments being made to address due diligence and EHSS assessments and Environmental and Social Action Plans.
The Bank is currently actively supporting the State Agency for Geology and Natural Resources with a regulatory capacity building and training programme.
Darren Millman, Treasurer
1 University Avenue, Suite 1500
Toronto, ON M5J 2P1
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