Senj Sant debt

Location:

Mongolia

Project number:

43044

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

A

Target board date:

18 Dec 2012

Status:

Disbursing

PSD disclosed:

12 Oct 2012

Translated version of this PSD: Mongolian

Project Description

The EBRD is considering providing financing for the construction, commissioning and operation of a 1500 t per day capacity dry process cement plant to be located in Urgun Soum, Dornogobi Province (450km from the Capital city of Ulaanbaatar), Mongolia.

Transition Impact

The Project would be a very significant industrial Greenfield investment in Mongolia. It would also be the first greenfield investment in the cement sector using environmentally friendly dry process with a well-reputed foreign technical partner (Lafarge). In addition the proposed project is not only directly supporting and nurturing the development of the private sector, but it is doing so in an industry which is relatively underdeveloped domestically and heavily reliant on imports.

Furthermore, this diversification effect is strengthened by the fact that the project sponsor is a local enterprise which is diversifying away from mining, thereby supporting the shift away from country’s reliance on mineral resources towards a deeper and wider economic base.

Against that background, the Project’s transition impact stems from the following elements:

(i) Transfer and dispersion of skills: The technical cooperation with an experienced international producer like Lafarge will demonstrate industry best practice to other companies and projects. Technical and managerial training programmes envisaged in the technical support and O&M agreements will enable the transfer of knowledge and skills to local staff.

(ii) Setting standards for energy efficiency and environment: Investment in the first dry process itself is setting standards and introducing new energy efficient technology in the market. The future plant also will achieve compliance of its environmental performance with EBRD EHS Standards and EU BAT for Cement Manufacturing, including specific air emissions standards for dust, NOx, SOx and other pollutants.

The Client

Senj Sant LLC, the project company currently organised as a fully owned subsidiary of a Monpolymet LLC, a leading gold mining company with diversified businesses in construction, construction material and health food trade sectors. Lafarge SA, a leading player in the global cement and aggregates market as a strategic partner.

EBRD Finance

Equity financing for up to 20% and a loan of up to USD 110 million of which part will be syndicated to commercial banks and/or provided by parallel lenders.

Project Cost

Approximately USD 185 million.

Environmental Impact

Categorised A, requiring a full Environmental and Social Impact Assessment (ESIA) in accordance with the Bank’s Environmental and Social Policy.
An Environmental and Social Impact Assessment (ESIA) has been prepared to meet national standards. This has been supplemented by Environmental and Social (E&S) report, which includes additional information on the local hydrogeology and environmental and social impacts associated with groundwater use, given that water use is sensitive in this part of Mongolia.

The Bank’s Environmental and Social Due Diligence (ESDD) has confirmed that the Company has the capacity to implement the Bank’s Performance Requirements (PRs) and that the Project is structured to comply with the Bank’s PRs, National and EU environmental standards. The plant will be designed and operated in accordance with EU Best Available Techniques (BAT) and includes the implementation of an environmental, health and safety management system and installation of continuous emission monitoring systems. Groundwater use has been assessed and additional mitigation measures have been included to reduce potential impacts, notably on a naturally occurring spring. The Company will maintain an active monitoring programme of groundwater throughout the life of the project. Prior to any expansion of the plant (Phase II), the Company will investigate additional groundwater sources.

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation

None.

Company Contact

Mr. Choinzon Delgerekhbulag, Director of Senj Sant LLC Damdinsuren Street-1, Sukhbaatar District-1, Ulaanbaatar, Mongolia
Tel: (976)-11-311633
Fax: (976)-11-311633
Email: degi@monpolymet.mn
URL: www.monpolymet.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

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Text of the PIP

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Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.