Translated version of this PSD: Russian
The EBRD is considering providing a new loan to Interglass LLC - a float glass plant located in Tokmok, Kyrgyz Republic. If the loan is approved by the EBRD’s Board of Directors, it will increase the Bank’s existing exposure to Interglass LLC, from €10 million to €18 million. The increase of €8 million will be in the form of a term loan.
If approved, the new project will enable the Company to complete the refurbishment and re-commissioning of the float glass plant. The modernisation of the plant will result in increased production capacity, including improved energy efficiency, improved quality of float glass and reduced production costs.
Transition impact derives primarily from:
Demonstration of successful restructuring
The capital expenditure programme will enable the company to enhance operating efficiency, including energy efficiency, and increase its added value production. It is expected that implementation of this investment will enable the Company to improve the quality of glass (thereby increasing the value of output), to prolong the life of the furnace, to increase the daily production capacity and to reduce energy consumption by 13 per cent. In a country where there is no obvious incentives to undertake energy efficiency investments given low electricity prices, the success of the project could have demonstration to other medium/large companies (albeit could be limited to those primarily consuming gas).
Setting standards of corporate governance and business conduct
The Company has been IFRS audited since 2004. However, it will continue to improve the internal financial accounting and reporting as well as budget and performance monitoring systems.
Interglass LLC, registered in the Kyrgyz Republic, a wholly-owned subsidiary of Steinert Industries GmbH & Co. KG (Germany). Interglass LLC is one of the largest industrial enterprises in Kyrgyzstan and the only float glass manufacturer in Central Asia with annual production capacity of up to 13 million m2, which will be increased to up to 18 million m2 upon the completion of the current modernisation programme
An increase in EBRD commitment to Interglass LLC of EUR 8 million, as a term loan.
In total the Bank’s commitment will increase from EUR 10 million to EUR 18 million.
EUR 27 million.
Categorised B in accordance with the Bank’s 2008 Environmental and Social Policy. Environmental and social issues associated with provision of additional financing for the upgrade of an existing float glass plant are readily identified and mitigated. The environmental and social due diligence (ESDD) has been undertaken based on a questionnaire and review of past due diligence and monitoring documentation.
The ESDD showed that while the Company has limited EHS capability and no operating EHS management systems in place, it has made significant progress in the implementation of its past commitments, especially in upgrading and re-commissioning of the plant. This has included energy efficiency as well as primary air emission control and nitrogen oxide (NOx) emission reduction measures.
The proposed investment programme will result in further environmental improvements and occupational health and safety benefits. The company is reported to be meeting local standards and has agreed, as part of the Environmental and Social Action Plan commitments to undertake a full BAT benchmarking study in 2012. The aim of this study is to achieve long term compliance with EU Best Available Techniques (BAT) requirements as set out by the EU Integrated Pollution Prevention and Control (IPPC) Directive and the Industrial Emissions (IE) Directive. However, the plant will exceed current EU requirements for air emissions of dust and NOx in the short to medium term. Derogation from the Bank’s Environmental and Social Policy is therefore sought. Given the Company’s location in an industrial area, the current air emissions are not considered to pose a significant public health impact or environmental risk.
An Environmental and Social Action Plan (ESAP) has been developed to address priority environmental and social measures and improvements. The Company is also committed to implementing a Stakeholder Engagement Plan and an integrated Environmental Health and Safety management system.
The Bank will monitor the Company’s environmental and social performance and the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing annual reports prepared by the Company and conducting periodic supervision visits when deemed appropriate.
Mr. J.E. Dzhanybekov
Promzone, Tokmok, 722200
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