Translated version of this PSD: Russian
The EBRD is considering financing the manufacture of tractors, combines and other agricultural and construction machinery. The investment will be used for the modernisation of the existing production premises of OAO KAMAZ and purchase of modern production equipment. The project will be located in Naberezhnye Chelny, the Republic of Tatarstan. The project will be implemented by a joint venture set up by OAO Kamaz and CNH Global N.V.
The project is expected to benefit the transition process by: transferring skills through backward linkages to the local suppliers as well as training of local employees; setting standards in the area of environmental management through introducing European Union environmental standards; and introducing modern agricultural equipment increasing competition in a developing market.
OOO CNH-Kamaz Industriya, a 50/50 joint venture set up by KAMAZ and CNH, will be the beneficiary of the financing. It will be managed by KAMAZ, a leading Russian heavy truck manufacturer and CNH, one of the worlds’s leading agricultural and construction machinery manufacturers.
The financing will be in the form of a senior secured Rouble-denominated loan to the Company of the Rouble equivalent of up to USD 30 million (about RUB 915 million).
The initial project cost is estimated at USD 70 million (excluding working capital).
Environmental classification and rationale
The project is Categorised IESE. The Bank is awaiting the findings of an Environmental Assessment that is being carried out on behalf of the Company before finalising a full Categorisation.
The Bank has worked with the Company and supported their engagement of an Independent Consultant to carry out a Corporate Environmental Audit of the Company’s operations and a detailed Environmental Analysis of the Project. The due diligence assessment will evaluate the Company’s capacity to operate within the Bank’s Environmental and Social Policy and Performance Requirements. Should areas be identified where improvements are required to meet those standards then an Environmental and Social Action Plan shall be drafted to document the necessary activities.
Disclosure of information and consultation
In the context of the EBRD’s participation in the project, the Company will release locally a summary of relevant environmental issues associated with the project and summarise mitigation measures, action plans and other initiatives agreed.
Monitoring and reporting
The Company will monitor the environmental impact of its operations in accordance with national law and regulations. The Bank will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing annual environmental reports prepared for the project covering:
(i) ongoing performance of project-specific environmental, health and safety activities as reflected in the results of periodic and quantitative sampling and measuring programmes, and
(ii) the status of implementation of environmental mitigation and improvement measures. The Bank’s representatives will also conduct periodic site supervision visits when deemed appropriate.
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