Heidelberg Caspi Cement

Location:

Kazakhstan

Project number:

41796

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

A

Status:

Cancelled

PSD disclosed:

16 May 2011

Translated version of this PSD: Russian

Project Description

The EBRD is considering financing to support Heidelberg Cement’s regional expansion by financing a green-field cement plant in South Western Kazakhstan, south of Atyrau and close to the oil producing region. This will be HC’s second cement plant in the country (first one is located in Ust-Kamenogorsk, Eastern Kazakhstan) in addition to its ready-mixed concrete and aggregates plants. The Project will produce up to 800,000 tonnes of cement annually.

Transition Impact

The Project is expected to have a strong transition impact stemming primarily from the following.

Demonstration effect
The proposed Project will support Foreign Direct Investments in Kazakhstan’s economy outside of the oil and gas sector. Western Kazakhstan is an oil-rich region with much of the foreign investment coming to extractive industries, and very little to other sectors. The Bank's support of the Project will encourage other potential investors outside of the oil and gas sector to implement projects in Kazakhstan, and demonstrate viability of such investments.

Setting standards in the area of energy efficiency and environment
The future plant will achieve compliance of its environmental performance with IFC EHS Standards and EU BAT for Cement Manufacturing, including specific air emissions standards for dust, NOx, SOx and other pollutants.

Additionality
In the current business environment in Kazakhstan the Bank’s financial support to a foreign investor has strong additionality. The Bank’s ability to provide debt financing in the proposed tenors, as well as strong track record in the region and in the construction materials sector is valued by the Group. The terms of the Bank’s financing are much more in line with the client’s needs than what can be currently obtained from commercial banks in the country.

The Client

Caspi Cement LLP and Caspinerud LLP both companies, indirectly owned by Heidelberg Cement AG.

EBRD Finance

EBRD is considering a combination of equity and debt not exceeding EUR70 million. The Project will be financed jointly with IFC and DEG.

Project Cost

EUR198 million

Environmental Impact

Categorised A in accordance with EBRD’s 2008 Environmental and Social Policy (ESP).

A detailed project design is being currently revised due to the change of production capacity from 2mln to 800,000 tonnes per year. The initial design passed the local EIA (OVOS) and state expertise in 2009. However, due to the changes a new EIA will be carried out after the design is finalised. Construction and commissioning of the plant is planned to take approximately two years. By 2014 it is expected to operate at full capacity. HC has already invested in the site preparation and connection of the power and water supply, construction of the office building and levelling access roads to the plant site.

The project area is a flat, rural, semi-arid with limited biodiversity. The closest community of Shetpe village is 6 kilometres away from the plant. The respective chalk quarry is located directly next to the plant site, whereas the respective clay quarry is located approximately 15 km northeast of the plant site.

The plant will apply dry-process production technology that has less environmental impact and energy consumption compared to wet-process. No wastewater will be generated from the cement production process. Water supply for technical and drinking purposes will be met from desalinated ground water abstracted on site from five wells.

Key environmental impacts are related to air emissions, namely dust and NOx. To address these issues respective technological solutions (low NOx burners, filters, dust suppressing methods, etc) are envisaged for the future plant, as well as regular ambient air monitoring in line with local regulations. An Environmental and Social Action Plan (ESAP) has been prepared together with IFC and includes provisions for achieving specific concentrations for dust, NOx, SOx, CO2, CO etc in line with IFC EHS Standards and EU BAT for Cement Manufacturing.
Key social issues can be associated with the presence of Chinese construction workers on site as the plant will be built under turn-key contract by a Chinese supplier. The workers will live in a construction camp on site. Joint IFC/EBRD workers accommodation guidelines will be implemented. Additionally, the project will have significant socio-economic benefits for the local area by increasing employment and small business opportunities, taxation revenues, and infrastructure upgrades.

Stakeholder Engagement Plan has been prepared and disclosed at EBRD, IFC and Company’s websites together with NTS, ESAP and full versions of the EIA in Russian and its translation into English.

Technical Cooperation

None.

 

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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