KHUJAND PACKAGING

complete

Installation and operation of a fruit and vegetable juice packaging line in Khujand, Tajikistan. Project objectives: To radically improve the quality of packaging and remove a major bottleneck in the Tajik agribusiness sector related to the mismatch between growing and processing capacity. The project will have high transition impact stemming from: (i) the improved quality of packaging; (ii) the transfer of technological and managerial know-how; (iii) the increased utilisation and reduced waste of local agricultural produce; (iv) the increased amount of value added in the country; (v) the increase of the country's hard currency earning capacity. As the EBRD's first investment in Tajikistan outside the financial sector, the project will also have a high demonstration effect. The borrower under the proposed project will be Khujand Packaging (KP), a joint venture created to operate this new enterprise. KP was registered in late 1996 as a joint-stock company in Tajikistan by the Khujand Canning Factory, Oeko-Pack from Austria and San-Bravo from the Czech Republic. Loan of US$ 1.7 million (ECU 1.35 million equivalent) with the option to convert up to US$ 250,000 of the outstanding principal into shares of the borrower. US$ 3.97 million (ECU 3.12 million equivalent). Khujand Canning Factory is a Tajik packaging enterprise which employs 700 people and has been in existence since 1936. The proposed project is for the establishment of a joint venture in Khujand (the centre of the Leninabad Region of Tajikistan), to be operated by a private foreign entity, which will produce and package fruit juices and wine made from local inputs. The project was screened B/0, requiring an Environmental Analysis to examine the impact of the proposed development and any action necessary to mitigate these impacts. The EBRD commissioned an environmental analysis including a review of the company's environmental policy and procedures. The environmental analysis, along with an audit of an existing operational site, was also carried out by independent consultants. The operations conducted at the new facility will be strictly limited to the storage of fruit juices in batch reactors and the packaging of these juices in Tetrapack-type packages. No hazardous or dangerous substances will be used; air emissions and wastewater discharge will be limited and will be in compliance with both Tajik and EU legal requirements. The company complies with national and international health and safety legal requirements. Since 1996, the company has been implementing a programme of quality improvements, including creating product standards based on EU legal requirements. The most important environmental issue is likely to be related to waste management, and a waste management and recycling system will be developed to address the extra waste generated by the packaging unit. This will be based on the company's existing and effective system of recycling and reuse. The company has all the required permits for water abstraction, the use of landfill and wastewater discharge, which were reviewed by the Bank's consultants during a site visit. The company will report annually to the Bank on environmental, health and safety matters, including compliance status and progress made on the implementation of environmental protection measures, and notify the Bank in case of significant environmental accidents or incidents. None