Global Beer Georgia

Location:

Georgia

Project number:

48332

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

07 Sep 2016

Status:

Complete

PSD disclosed:

14 Jun 2016

Project Description

A syndicated long-term loan package of up to €18.5 million to Global Beer Georgia LLC, a project company incorporated in Georgia and established by JSC Teliani Valley, a Georgian wine producer and distributor of beverages. The Company was established to setup and operate greenfield beer production facility in Georgia.

 

Project Objectives

The loan proceeds will be used to finance greenfield brewery in Georgia.

Transition Impact

ETI score: 60

The project's transition impact is expected to derive from:

1) Greater competition in the project sector - the project will facilitate the entry of a new player in a market currently dominated by only few players. The establishment of the new brewery will expand the choice of products available to consumers, leading to greater competition in the beer sector, resulting in overall improved price/quality balance.

2) Setting standards for corporate governance and business conduct - the project would integrate modern water and energy efficient technologies in the production process thus enabling to achieve energy performance levels in line with Best Available Techniques.

Client Information

GLOBAL BEER GEORGIA LLC

The company is a project company, established to operate greenfield beer production facility in Georgia. Global Beer Georgia is fully owned subsidiary of Teliani Valley, a joint stock company listed on the Georgian Stock Exchange. Teliani Valley is one of the leading Georgian wine producer and distributor of beverages.

 

EBRD Finance Summary

EUR 6,166,667.00

The financing will consist of a senior (A/B) and a parallel loan in aggregate amount of up to €18.5 million consisting of: A Loan for the EBRD's own account in the amount of €6.17 million, a B Loan in the amount of €6.17 million for the participant and a parallel loan in the amount of €6.16 million.

Total Project Cost

EUR 32,561,322.00

Environmental and Social Summary

Categorised B (ESP 2014). Independent third party environmental and social due diligence was commissioned to assess both the potential impacts related to the project, and the capacity of the Client to implement the Bank's Performance Requirements.

 

The land plot for the project was purchased in 2007 and was formally agricultural land.  GBG successfully applied to have the land re-zoned in order to construct the brewery.  Near neighbours include another brewery; a confectionery plant; a water bottling company, and soft drink manufacturer. The is also located across the road from the Tsilkani Refugee Settlement (established for Internally Displaced Persons (IDPs)  who were displaced from Samachablo/South Ossetia in 2008); is approximately 1km from the village of Akhalubani; and 3-4km from the Tserovani Refugee Settlement (also for IDPs from Samachablo in 2008).  Under Georgian regulations, a formal Environmental Impact Assessment is not required for the Project as the construction of a brewery in the proposed location is not considered a high risk activity.  A permit has however been obtained for drilling a water supply borehole and an abstraction permit will obtained at the appropriate time under Georgian regulations.

 

The results of the Bank's environmental and social due diligence are that there are few significant potential environmental impacts.  A hydrogeological study has shown that water resources are of high quality and the planned abstractions are not expected to impact the water availability for other local users.  There may be limited impacts from construction such as noise, dust, and traffic though these will be monitored by the Construction Supervisor and will be confined to working hours only.  Waste water impacts are typically the most significant environmental issue in relation to brewing. The facility will require a waste water treatment facility to be constructed in compliance with Georgian and EU waste water discharge standards.  The treated waste water will likely be discharged to a local river (Narekvavi) which currently receives a number of other industrial discharges, and the design on the treatment plant will therefore require to consider cumulative effects.

 

Consultations with the IDPs and local villagers living in the settlements closest to the Project area indicated that  the general approach of local people towards the project is positive.  The Company will need to develop a Local Employment and Training Management Plan and will need to include local employment objectives, labour and working conditions and employee grievance mechanism into the Contractor's Management Plans to address these issues in line with PR 2 requirements.     Other social impacts identified during  ESDD include construction and operation related disturbances such as noise, vibration, potential damage to local infrastructure (i.e. power supply network, gas supply network and on the road infrastructure), traffic safety, community safety,  odour impacts, and impacts on communities' water resources  which will be  addressed with clear actions in the ESAP.

 

The Company has developed a Stakeholder Engagement Plan and a grievance mechanism to manage community issues in line with PR 10 during construction and operation of the plant. The SEP will include measures to ensure vulnerable groups such as IDPs will not be negatively affected by the project activities and operations.

 

An environmental and social action plan (ESAP) is being developed and will be agreed with the Company.  The ESAP addresses the issues described above, in particular in relation to the water treatment plant and the PR2 issues.

Technical Cooperation and Grant Financing

Subject to the implementation of eligible climate technologies and of the approval of the Bank, the project might benefit from an incentive grant under the EBRD programme FINTECC (http://fintecc.ebrd.com)

Company Contact Information

Temur Jankarashvili
t.jankarashvili@globalbeergeorgia.com
+995 32 231 32 45
+995 32 231 32 49
www.globalbeergeorgia.com
Tsilkani village, 3319, Mtskheta , Georgia

Implementation summary

The EBRD's A/B loan and the parallel loan were prepaid in June 2019 as the Client received financing with more favourable terms from two local banks. At the time of prepayment, the Client completed the construction of a greenfield beer plant and was producing and distributing beer. The Project partly achieved its TI objectives by increasing the competition in the Georgian beer market and by setting industry standards through the installation and operation of a CO2 recovery system and ISO certification. As a result, after prepayment, the Project received a PTI of 40.  

PSD last updated

02 Sep 2020

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP 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 following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

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 more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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