Translated version of this PSD: Georgian
The EBRD is considering providing financing to JSC Wissol Petroleum Georgia for the
- financing of Compressed Natural Gas (‘CNG’) filling stations network for vehicles and
- restructuring of the company’s long term liabilities to refinance an existing co-financing facility and local loans with long term facilities including new international syndicate banks.
The project has the potential to generate a positive transition impact because:
- CNG has only recently been expanding in Georgia and has potential to develop further. Development by Wissol will increase its demand through high quality petrol stations with modern service and shopping synergies.
- The project may have a positive impact on competition in the fuel market as it can compete against petrol and diesel once a critical mass of converted vehicles and service points has been reached.
- The project has the potential to set higher standards for business behaviour through the adoption of the best safety, management and environmental standards at its new CNG stations as main competitors in Georgian CNG market are single product stations of poor standard in terms of equipment and safety with inferior service from a customer standpoint.
- Additionally, the project has the potential to demonstrate new replicable behaviour. This will be a first example of a domestic corporate graduating to long term international syndicated loans which are virtually non-existent outside of the FI and Power sectors.
- The project also foresees the implementation of higher energy and water efficiency standards as compared to the current market practice with the use of advanced technologies with low market penetration; this would serve as a demonstration of best practice in the country.
Wissol Petroleum Georgia is one of the biggest companies in Georgia both in terms of revenues, up to half billion GEL (US$ 300 million) as of 2012, as well as by the number of people employed, 4000 people. Wissol is involved in fuel import and retail business and operates more than120 petrol and CNG station all over Georgia and is one of the major players on the aviation fuel market.
The facility will consist of loans to the Company in the amount of up to US$ 70 million. The loans will consist of a US$ 65 million syndicated EBRD loan and a US$ 5 million co-financing facility loan.
Total project cost is US$ 81.3 million.
The project has been Categorised B in accordance with the Bank’s Environmental & Social (E&S) Policy and Environmental &Social Due Diligence (ESDD) has confirmed that impacts are site specific, readily identifiable and can be managed through appropriate mitigation measures. ESDD included: a visit to Wissol HQ to discuss corporate level policies and procedures; interviews with key personnel responsible for group wide E&S management; and visits to a representative selection of retail stations where the project is to be implemented.
Wissol has a number of mechanisms in place for the management of E&S issues which are broadly aligned with international best practice and the EBRD’s Performance Requirements (PRs). Wissol has detailed management plans in place covering items such as: general Environmental and Social Governance practices including an operations manual and an audit and assurance programme; detailed fuel handling and emergency response plans; regulatory compliance tracking mechanisms; and Health & Safety procedures and training programmes. In addition, the company’s asset base is relatively new and constructed at greenfield locations reducing the overall risk profile of a company of this nature.
A limited number of corrective actions have been identified and are included in an E&S Action Plan (ESAP) covering items such as third party verification that management systems in place are aligned with ISO standards. In addition, best available technologies for vapour recover at pump will be installed as part of the pump replacement and maintenance programme. Finally, a land acquisition plan will be developed to manage the Environmental and Social risks associated with further network expansion as a result of the proposed project.
The project will be monitored in accordance with the requirements of the ESAP and due to the relatively low risk profile of the company and project, monitoring in the first instance will be based on company provided disclosures and furnishing of information to the Bank.
The project may also benefit from an incentive grant provided through FINTECC Framework (BSD 13/249). The Framework is funded by the Global Environment Facility and established in order to support demonstration of energy efficiency, water efficiency, and small scale renewable energy technologies with low market penetration in the early transition countries.
Three technologies were identified as being eligible in incentive grant support under FINTECC: solar collectors, rainwater harvesting, LED lighting and building energy management system. The incentive grant will be equivalent to 23% of eligible costs and will be capped at US$ 220,000. The incentive grant will be payable upon verification of technology installation and commissioning.
JSC Wissol Petroleum Georgia
74b Chavchavadze Avenue
Tel: +995 32 291 53 15
Fax: +995 32 291 56 15
For business opportunities or procurement, contact the client company.
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Tel: +44 20 7338 7168
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