EBRD is considering providing Sea Brothers’ subsidiary Saltwater Bulk Shipping Company (SBS) with a long term senior loan to finance acquisition of two to three second hand bulk carriers to support the completion of the logistics chain for its sea-rail multimodal freight operations in Russia.
The transition impact of the proposed Project is derived from the fact that this investment will contribute to the development of the private maritime transportation of SBS and its evolution into Russia’s second integrated transport group, offering door- to door logistics services, allowing for greater efficiency and innovation in the transport sector. The project will demonstrate the benefits of an integrated business model, which is expected to be replicated by other companies entering the market following this example. It is expected that the market share of the 3PL logistics companies would increase in the medium to long term.
Saltwater Bulk Shipping Company was set up by a strategic alliance of three Russian transportation companies. The main focus of the strategic alliance is to offer the customers better logistics solutions based on multimodal transportation with efficient utilisation of various elements of the logistics chain, including storage facilities and ship capacity.
To date, the Company has been engaged in providing complex logistics solutions to the clients of the alliance, mostly Russian and international bluechip companies, based on chartering of vessels and it has built up a solid operational base.
USD 21 million senior loan.
USD 30 million.
The project has been categorised B under the Bank's Environmental and Social Policy 2008. The acquisition of second-hand dry cargo vessels is not associated with significant environmental and social issues and will contribute to the completion of the Sponsors' logistics chain for its sea-rail multimodal freight operations in Russia. The main rational for acquiring second-hand vessels built in Japan is their high efficiency, quality, low maintenance costs and high residual value.
A corporate environmental and social review has been undertaken to assess the Company's capacity to implement the project in accordance with international maritime safety and environmental standards and the Bank's PRs. Information on the Company's overall operations, policies, procedures and management systems has been provided by the Company through the Bank's ESDD questionnaire and interviews, including information on environmental, health and safety management, quality control, communication with stakeholders and HR issues. The information provided showed that the Company is overall in compliance with national regulatory requirements, EBRD's PRs and international (including IMO, MARPOL and SOLAS) standards of maritime safety and environment protection and that the Company has appropriate systems and controls in place to manage environmental, health and safety and labour risks. The environmental due diligence confirmed that the company's emergency response and preparedness procedures are adequate.
An Environmental and Social Action Plan (ESAP) has been developed and agreed with the Company in order to address the necessary mitigation measures and improvements which will allow the Company to comply with national regulations and the Bank’s PRs. As part of the ESAP, the Company will implement the following actions:
- Implement Safety Management System (SMS) adequate to International Management Code (ISM Code) and obtain and maintain all relevant safety and seaworthiness certifications and international maritime safety and environmental standards (including IMO MARPOL and SOLAS) for all existing and new vessels;
- Develop and implement environmental, safety, energy-efficiency and GHG emission selection criteria during the acquisition process
- Develop a ship recycling plan for existing old vessels, which will ensure compliance with international regulations of transboundary movement of waste for recovery as well as takes into consideration IMO guidelines for the Safe and Environmentally Sound Recycling of Ships.
In addition, the ESAP includes other improvement measures for the Company, including development and implementation of a Stakeholder Engagement Plan and grievance mechanism. The Company will also disclose information on its environmental and social performance on its web-site.
The Bank will monitor the projects and the Company’s environmental and social performance and implementation of the ESAPs through annual E&S reports.
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