Circle Maritime Invest (CMI)

Translated version of this PSD: Russian

Project Description

The EBRD is considering providing a senior loan of up to US$ 65 million to Circle Maritime Invest (‘CMI’ or the 'Company’). The Company will use the funds to finance part of the post-delivery acquisition costs of three shallow draft icebreaking tug boats in order to meet its commitment under a long-term time charter with Agip KCO - a company acting as an agent on behalf of the Kashagan Oil Consortium - to provide offshore support services in the Kazakhstan’s sector of the North Caspian Sea. The Project Vessels will be used in icebreaking management operations, as well as in towing, transportation, and rescue activities and other support services to the artificial islands (acting as oil platforms) constructed in the surrounding areas of the Kashagan oilfields.

Transition Impact

The following transition impact is expected to be achieved as a result of implementation of the proposed project:

• Increase local private sector participation
  Owing to high entry barriers, the number of local private players in the market is limited. The Bank’s participation in the Project will help raise the profile of the offshore support sector which will encourage more private and local participation.
• Setting Standard of governance and best business practice through:
  
  1. Environmental and safety standards and energy performance in the sector. The Bank’s involvement will highlight the high standards required of a service provider operating in the offshore support sector and also promote the awareness of the need for energy efficiency in shipping. In addition to the existing ISO 9001:2000 and ISM certification, the Company will also implement ISO 14001 certification as part of the enhancement of its environmental standard;
  
  2. Modern standard of business conduct to improve transparency and best practice. The Company will document service agreements with its operating company to promote transparency and accountability in its management practice. The Company is also committed to adopting best business practices, including the publication of its procurement policy which requires contracts exceeding a certain level to be tendered out.

The Client

JSC “Circle Maritime Invest” registered in Kazakhstan, is a privately owned marine service company. Through its operating company, Caspian Offshore Construction (also registered in Kazakhstan), CMI provides operation and maintenance services to offshore support service vessels in the Caspian Sea. It currently has 38 vessels in operation consisting of ice-classed push/pull tugs, emergency evacuation vessels, crew boats, and barges as well as floating hotels; 10 of which are owned by the Company. The Company’s main client is Agip KCO N.V. which is the operator on behalf of the seven international oil companies representing the Consortium involved in the exploration of the Kashagan oil fields, and other deposits such as the Aktote, Kairan and Kalamkas discoveries in the northern part of the Caspian Sea.

EBRD Finance

A senior loan of up to US$ 65 million.

Project Cost

The total investment cost of the Project is US$ 122 million.

Environmental Impact

Project Categorisation

The acquisition of three new tug boats is associated with limited environmental and social impacts that can be readily identified and mitigated. Therefore, the project is categorised as B.

Issues Identified and Mitigation Measures

The Environmental and Social Due Diligence (ESDD) for the project included:

• A corporate environmental and social review of the Company focusing on its current regulatory compliance status and management systems;
• An environmental and social analysis of the acquisition of the new tug boats covering the Romanian shipyard; and
• A review of AGIP's specific requirements and operational procedures relating to the use of the boats for servicing off-shore oil field developments in the Caspian Sea.

The operations of CMI are overall in compliance with regulatory requirements, EU environmental standards and international (including IMO, MARPOL and SOLAS) standards of maritime safety and environment protection. Also the Company has appropriate systems and controls in place to manage environmental, health and safety and labour risks. The main client for the Company is Agip KCO, which also has an established EHS management system. CMI has a contractual obligation to comply with all relevant environmental and maritime safety, OHS and labour requirements, standards and operational procedures of Agip KCO. The shipyard contracted to construct the project vessels was found to operate under strict environmental, health and safety policies and good and safe working practices.

An Environmental and Social Action Plan (ESAP) has been developed to further improve the environmental and social performance of the Company and to ensure compliance with the EBRD PRs. The main action items in the ESAP includes the following:

• Development of a grievance mechanism for workers;
• Development and adoption of a corporate public information policy and procedures;
• Implementation of an energy management improvement programme.

Monitoring

Monitoring of the environmental and social performance of the project will be carried out through annual reporting.

Technical Cooperation

None.

Company Contact

Gulam Aliyev, Chief Investment officer of JSC “Circle Maritime Invest”

7th floor,
Business Center of Rixos Hotel
506/99 Seifullin Ave.,
Almaty, Kazakhstan, 050012

Tel: +7 (727) 259 73 33

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