Project Alexin

complete

Translated version of this PSD: Russian EBRD is considering providing a corporate loan to the company Oil and Gas Systems to finance the construction of a greenfield hot press stamping plant near the town of Sukhodol, Tula region; the modernization of the foundry shop in the Alexin plant; and the refinancing of existing loans. The new press secures own supply of half-body casings for the production of pipeline valves and enters the growing market of large stamped parts used in various industries in Russia. The project supports a regional private company to develop the value-added production facility and promotes best international standards in the metal processing and pipeline valve sectors with a core focus on energy and resource efficiency. The transition impact objectives of the project include: Oil and Gas Systems, a leading Russian producer of pipeline valves which owns and operates Tyazhpromarmatura plant, and Sukhodol construction project, a greenfield hot press stamping plant. The EBRD will provide €123 million senior loan with up to €50 million to be syndicated to commercial banks. DEG and Alef bank are expected to provide up to €27 million as a parallel loan. The total financing will comprise approximately €150 million. Categorised B. The Bank has an existing loan with Oil and Gas Systems and a good understanding of the company's environmental and social performance. The company is implementing the existing Environmental and Social Action Plan (ESAP) action items and has provided appropriate reporting to the Bank. To date, progress against the agreed ESAP actions has been good, and ESD has noted that the company's EHS management has been significantly strengthened throughout the period of the Bank's relationship and that the company has introduced, and continues to introduce, international best practice as standard. The Environmental and Social Due Diligence undertaken by independent consultant in line with the Bank’s Environmental and Social Policy confirmed that the construction and operation of a new state-of-the-art hot press stamping facility in Sukhodol and modernisation programme in the existing valve manufacturing plant in Alexin (AZTPA) are associated with a limited number of potential environmental and social impacts, which are site-specific and readily identified and mitigated. None. Mrs Irina Yumangulova CFO Oil and Gas Systems Tel: +7 (495) 411 77 57 Email: yumangulova@ogscomp.ru