A proposed second long-term loan to finance the expansion of Gap-Turkmen’s production capacity of yarn and denim fabric and to enable the company to diversify its product range by producing gabardine trousers and fashion jeans in addition to its current classic denim jeans.
The loan is intended to finance the purchase and installation of the additional textile equipment necessary for the Gap-Turkmen production capacity increase and product range diversification. The project would ensure the long-term viability and competitiveness of Gap-Turkmen, increasing its sales and profitability, by enabling the company to meet market demand increases for yarn and denim, including that for gabardine trousers and fashion jeans.
The project is in line with the Bank’s strategy to provide financing for selected enterprises in Turkmenistan, which support export-oriented private sector development.
The transition impact is related to: (1) better links and quality control over the supply network and associated government bodies, and (2) the transfer of skills through close cooperation with the Ministry of Textiles.
As this project is the only successful export-oriented textiles venture thus far, it will act as a model in the region for export-oriented private sector development.
Gap-Turkmen, a joint-stock company incorporated under the laws of Turkmenistan.
US$ 10.7 million (€11.6 million) senior secured loan with the repayment term of 5 years including a 12 month grace period.
The original project cost was US$ 89 million, including the existing plant valued at US$ 40 million. After a capital increase of US$ 15 million in 1999, and with the new expansion project, total costs will be US$ 115 million (€ 125.5 million).
Screened B/1. Gap-Turkmen facilities have been constructed to meet both local and international environmental standards. Environmental due diligence carried out by independent consultants in October 2000 confirmed that the company fully complies with environmental, health and safety standards in Turkmenistan as well as with the relevant EU directives. In January 2001, Gap-Turkmen was awarded ISO 14000, an International Environmental Management Quality Certificate, which confirms the company’s environmental awareness and compliance with the applicable international standards. The company is considered by the regulatory authorities to be the most modern, well-equipped and environmentally friendly company operating in Turkmenistan.
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