Olzha loan extension

Location:

Kazakhstan

Project number:

46227

Business sector:

Transport

Notice type:

Private

Environmental category:

B

Approval date:

26 Mar 2014

Status:

Repaying

PSD disclosed:

19 Feb 2014

Translated version of this PSD: Russian

Project Description

The EBRD is considering extending a secured loan to JSC Olzha, a private operator of freight wagons in Kazakhstan. Proceeds of the loan will be used for acquisition of new freight railcars and one shunting locomotive.

Transition Impact

The first loan with Olzha was signed in July 2013 with the key transition objectives: 

(i) private sector expansion in a market which is dominated by the state sector; 

(ii) development of the leasing market which remains underdeveloped (in particular the railcar leasing segment); and 

(iii) setting standards through formal introduction of OHSAS 18001 (safety process and management), which is a key issue for LPG railcars. The proposed loan extension would support further expansion of the original transition objectives.

Rail transportation sector remains dominated by the state-owned railway company. The key objective of the transaction is to support a private ownership and operations in line with the larger railway reform plan. By supporting Olzha in the acquisition of additional railcars, the Project will contribute towards increasing the share of wagons owned and operated by private companies in Kazakhstan.

New wagons will be leased to medium-sized companies and used for transportation of different types of commodities such as LPG, gasoline, coal etc. These companies generally require not more than 100-150 wagons and maintaining their own fleet is often not commercially justified. By supporting the acquisition of additional wagons the Project would indirectly support small and medium-sized companies whose business involve transportation of commodities and thereby improve trade interactions with their customers.

Part of the loan will be used to purchase a locomotive which is required for haulage of Olzha’s growing fleet of wagons and to strengthen competitive position of the company as a provider of rail freight forwarding services.

The Client

The company’s activities include: lease of railcars, transportation and sales of liquefied petroleum gas (LPG) and oil products (mainly diesel and gasoline).

The company operates about 1,500 wagons, mostly LPG and oil tanks.

EBRD Finance

A senior secured loan in the amount of USD 9.0 million.

The EBRD is considering extending final maturity of the loan.

Project Cost

USD 9.0 million.

Environmental Impact

The proposed project has been categorised B in accordance with the 2008 EBRD Environmental and Social (E&S) Policy, as the potential impacts are expected to be site specific and readily identifiable and addressed through mitigation measures.

The environmental and social due diligence for the project, which is ongoing, includes an environmental and social audit to assess the Client’s management capacity and systems to manage environment, health, safety and labour issues in its operations and an analysis of the potential (future) E&S impacts and benefits. It will also assess the Client’s ability to carry out the Project in compliance with the Bank’s Performance Requirements.

An Environmental and Social Action Plan (ESAP) will be prepared  for the project, and a Stakeholder Engagement Plan will be developed that will include a grievance mechanism and information on environmental and social performance and a summary of the agreed Action Plan will be released to stakeholders.

This PSD will be updated when the results of due diligence are known.

Technical Cooperation

None.

Company Contact

Mr Arman Beissekov,
Deputy CEO on Economy and Finance
arman.beissekov@olzha.com

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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 how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

Share this page: