Geo Steel

complete

The proposed project is for the construction and operation of a steel mini-mill of 175 k ton capacity in Georgia. The plant will use local scrap (which is currently exported). The main product of the steel mill would be reinforcement bar. It is envisaged that the annual production would be sold principally in Georgia and neighbouring Armenia. The Company is located in the industrial area Rustavi, circa 40 km from Tbilisi. The Project will have a significant demonstration effect as a large industrial foreign direct investment in the country, marking an increasing confidence of foreign investors in the country. One of the most efficient Indian steel producers is supporting this project and will facilitate know-how transfer to the Borrower. The Project would be the first steel-making operation in Georgia since the closure of the integrated steelworks in its vicinity and it will enhance the ability of customers to source reinforcement bar locally, thus increasing their efficiency. Geosteel, a limited liability company in Georgia. The Project is supported by JSW Steel (Netherlands) B.V., which is part of one of the largest producers of steel in India. Up to USD 28 million senior loan, to be syndicated to commercial banks and USD 7.125 million working capital facility. USD 61.5 million. Screening category and justification The project was screened as B/1 requiring an Environmental Audit of the existing site and Company and an Environmental Analysis of the proposed investment plan to ascertain future compliance with Georgian and EU environmental standards. Due diligence undertaken and outcomes An environmental due diligence of the Project was undertaken by the Bank and included a site visit to the site and meetings with the Company’s technical team to discuss the planned Project and planned technology to be employed. Additional meetings where held with the Ministry of Environment in Tbilisi. The Company has undertaken an Environmental Impact Assessment of the project in line with Georgian requirements inclusive of public consultations. The due diligence confirmed that the plant is designed to meet both national and applicable EU environmental standards and, given the industrial setting of the proposed plant, impacts will be limited. The Company is implementing best practice and will for instance include dust abatement equipment and continuous monitoring of emission from the arc furnace. The due diligence concluded that the plant is not located in a sensitive location and environmental and social impacts are not significant. Based on the environmental due diligence an Environmental and Social Action Plan (ESAP) was developed and agreed with the Company. The ESAP requires the Company to structure the design, construction and operation of the plant in line with national and EU environmental standards and includes among others, a commitment to install continuous monitoring as well as the implementation of an Environmental Management System (EMS). Implementation requirements None. Mr Hardeep Singh Chief Executive Geosteel 36 David Gareji Street 3700 Rustavi Georgia E-mail: hsingh@geosteel.com.ge Fax: + 995 24 141 097