Zhanros Group Expansion Project

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The EBRD is considering a loan of USD 22.5 million to Zhanros Group, an oil field services group in Kazakhstan, for acquisition of a hydraulic fracturing unit, and two drilling rigs for drilling works to be used in the western regions of Kazakhstan. The equipment will be used in conventional oil and gas fields only, where fracking has been used for about 10 years by international majors. The Project will support the technological upgrade of local oil field services (OFS) operators and expansion into new types of high value-added services. The Transition Impact potential of the project is derived from (i) demonstration effects of new products and processes (ii) support of private sector development and increased competition in the project sector and (iii) setting higher standards of business The Zhanros Group is an oil field services group established in Kazakhstan providing integrated drilling services and other maintenance services to oil & gas companies in the southern and western regions of Kazakhstan. Debt financing of up to USD 22.5 million, including new and existing facilities. USD 22.5 million for new investment program and refinancing. EBRD carried out environmental and social due diligence for its first investment with Zhanros Drilling in December 2010. This included an independent audit of the company's environmental, health and safety management systems and of selected operational sites. The company was found to be operating in line with relevant Kazakh environmental and safety legislation, and an Environmental and Social Action Plan was developed to bring the company fully in to line with EBRD Performance Requirements. Zhanros has been diligently implementing this plan and has provided regular progress reports to EBRD. For this new investment EBRD will assess any additional environmental or social impacts associated with the equipment to be purchased and will update the Action Plan if necessary. The Bank also intends to work with the company to review and enhance best practice standards for oil fracking in Kazakhstan. None Elena I. Makhnitskaya Chief Financial Officer Zhanros Drilling LLP 5-A Aiteke Bi street, Kyzyl Orda Kazakhstan