26690 - SEF Altyn-Ajydar III

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Summary of Proposed Investment

Project Number

26690

Company Name

KYRGYZ-CHINESE JOINT VENTURE ALTYN-AJYDAR

Date SPI Disclosed

Jun 4, 2008

Country

Kyrgyz Republic

Industry

Manufacturing

Projected Board Date

Jul 7, 2008

Status

Completed

Sector

Aluminum

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Jun 27, 2008
Signed : Jun 30, 2008
Invested : Oct 3, 2008

Project Description

Altyn-Ajydar, located in Bishkek, was set up in 1995 and has been a long-term IFC client since the late 1990s. IFC provided loans in 1999 to finance the modernization and expansion of the company’s cardboard packaging facility and in 2005 to set up a new corrugated packaging line. Altyn-Ajydar’s management has currently identified strong demand for construction materials in Kyrgyzstan and Kazakhstan due to the long-term growth potential of the construction industry in both countries. The company has approached IFC to assist in the financing of a $3.0 million project to diversify its activity into aluminum. The purpose of the project is to establish production lines for aluminum composite panels and tempered glass/double-glazed window/PVC window frame and stained glass units.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	1.60
Equity

Development Impact

The proposed project will:

- help expand and diversify the company’s product range in a high value-added area and improve its export potential,
- introduce high quality products through the employment of modern equipment and technology that is not available in the sector,
- help promote import substitution for construction materials, and
- enhance energy savings and efficiency in the construction sector.

Altyn-Ajydar’s project will also create additional employment; more than 100 additional employees including 20 women will be hired to work on the new production lines. The project is expected to improve and strengthen local production capabilities of the building materials industry and construction sector as a whole in Kyrgyzstan.

This investment will be an opportunity for IFC to further collaborate with a sound client in a frontier market. IFC will continue to provide long-term support for a successful existing client through a project that will help increase the company’s export potential and support regional trade. The company seeks IFC’s involvement in the project to obtain long-term financing and to support its investment in the construction materials area, which IFC views as a successful diversification and expansion in Central Asia. With IFC participation, the company will be able to further benefit from IFC’s sectoral expertise and advice on corporate governance and environmental health and safety management. IFC will continue its efforts for the introduction of a sound MIS system and supporting the transition to a more institutionalized structure at Altyn-Ajydar through increased employment of professional managers. Moreover, IFC will provide long-term financing to a successful private sector company.

The key environmental and social issues in on-going and proposed operations are:

- capacity for assessment and management of environmental, health and safety performance associated with existing and proposed operations;
- labor practices and terms of employment of direct and contracted employees in the renovation and operations of all facilities; occupational health and safety related to the renovation and operation of all facilities; and
- management of emissions to air and wastewater effluents from existing and proposed operations.

As a result of its due diligence, IFC has concluded that the potential adverse environmental and social impacts presented by the project and by the existing operations are few in number, site-specific and have been or can be readily addressed through mitigation measures, already identified by the company. It is therefore concluded that this is a Social and Environmental Category B project.

Contacts

For Inquiries About the Project, Contact

Addresses:

- 142 Gorkiy Street, Bishkek, Kyrgyz Republic, and
- Eastern Promzona, Bishkek, Kyrgyz Republic

Contacts within Altyn-Ajydar are:

- Pavel Terekhov, President
Telephone: (996 312) 544420
E-mail: altyn_adr@mail.ru

- Liliya Terekhova, Chief Accountant
Telephone: (996 312) 544420
E-mail: altyn_adr@mail.ru

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

Local Access of Project Documentation

Environmental documents will be made available at the following locations:

- 142 Gorkiy Street, Bishkek, Kyrgyz Republic, and
- Eastern Promzona, Bishkek, Kyrgyz Republic

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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