Oasis Russia

Location:

Russia

Project number:

44203

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Target board date:

16 Apr 2013

Status:

Complete

PSD disclosed:

16 Nov 2012

Project Description

The EBRD is considering EUR 50.0 million loan to Echelon Systems Ltd. (“Echelon”), the sole owner of the Moscow Brewing Company (MBC or the “Company”), beer and beverages producer located in Mytischi, Moscow region. The loan will primarily finance

(i) construction of the first stage of a modern distribution centre and other distribution related capital expenditures; the loan will also finance

(ii) capital expenditures on innovative projects and

(iii) consolidation and extension of maturity of short-term debt (together, the “Project”).

Transition Impact

The Project transition impact potential will derive from demonstration of new replicable behaviour and activities and setting standards for corporate governance and business conduct. The new distribution centre is expected to set higher industry standards for energy efficiency by reducing energy usage significantly thanks to the proximity of the storage and distribution facilities to the plant. An upgrade of a modern waste water treatment plant which would combine anaerobic wastewater treatment with biogas production and a heat and power generation plant are considered innovative for the Russian market and an upgrade of this facility with regard to the new distribution centre would therefore set a new standard to be replicated by other local companies.

The Client

Echelon, which will be implementing the Project.

EBRD Finance

EUR 50.0 million loan for the account of EBRD.

Project Cost

Approximately EUR 69.3 million.

Environmental Impact

The project was categorised B and due diligence was undertaken by a member of the Bank’s Environment and Sustainability Department. MBC does not operate a formalised environmental, health and safety management system but does have a department in charge of labour safety, ecology and industrial safety. The focus of this department is principally on maintaining compliance of the Company with national requirements for environmental management and occupational health and safety. The Company operates a food safety system in compliance with HACCP and the International Food Standard (IFS). MBC is also planning to develop an environmental management system in accordance with ISO 14001 and, at a later stage, ISO 18001.

MBC also has a department in charge of human resources and, again, the focus is on maintaining compliance with national requirements for human resource management. The Company has implemented a number of technological solutions to address the key environmental impacts of its operations including a comprehensive process water purification system, a waste water recycling and treatment system (which treats waste waters above EU standards), and systems for the cleaning of air emissions and the management of potential dust explosions.

The Company has a number of plans to further develop such technological solutions including the further development of its waste water treatment system to include energy production from bio-gas and the installation of a new clean-in-place (CIP) system to reduce water consumption. In terms of the new logistics centre, the Company has undertaken the required environmental impact studies and these are currently going through the process of review and approval by the local and regional authorities. No significant impacts are associated with the construction and operation of this facility.

The Bank will agree an action plan with Echelon to ensure that the Company operations and the project will meet the Bank’s Performance Requirements with the emphasis on formalising management systems to ensure that the Company can manage and monitor the key environmental and social risks associated with its operations. Echelon will be required to provide the Bank with annual reports on environmental and social issues and the implementation of the agreed environmental and social action plan.

Technical Cooperation

Energy efficiency audit funded under the Global Environmental Fund (GEF) funded framework for Russia.

 

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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Text of the PIP

Project Complaint Mechanism (PCM)

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