GAC has over 100 operating subsidiaries operating in almost every country in the world. It is structured as a group of four holding companies incorporated in Liechtenstein which are in turn owned by a trust whose beneficiaries are the senior management of the Company along with the daughter of the original founder of the Company. The senior management team has extensive experience in the industry and enjoys a very strong reputation for conservatism and probity.

IFC’s proposed investment is an A loan of up to $35 million to finance the purchase of offshore supply vessels. These would be used towards the Project cost which is estimated to be $47 million.

35.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	35.0
Equity

* These investment figures are indicative

GAC has shipping and logistic operations throughout the world. Its fleet of offshore supply vessels has historically served the following countries/regions: west coast of India, the Arabian Gulf, the Mediterranean, the Caspian and the west coast of Africa including Nigeria. The first vessels being financed by IFC’s loan are expected to operate initially in the Kazakh sector of the Caspian. GAC’s senior management is headquartered in Dubai, UAE.

While Kazakhstan is considered to have substantial oil (and gas) reserves including offshore, poor infrastructure and a lack of support services has prevented it from taking full advantage of these resources. As a result, the development of such services is essential to the development of the country and would in turn unlock economic growth and job creation. The project would also facilitate the export of oil from countries with excess supply (such as Kazakhstan) to countries with a shortage, allowing both sides to benefit and enhancing the efficiency of the global oil market. By facilitating increased trade linkages between the MENA region and the rest of the world, the project would also provide a demonstration effect to regional players of the rewards available from global integration.

IFC’s long term financing would help fill a critical funding gap and allow GAC to match its long term assets with long term finance which remains difficult to obtain following the financial crisis. Traditional shipping banks continue to retrench and remain reluctant to extend additional financing for new investments, particularly for vessels which will operate in frontier regions. Local banks in the Gulf in turn remain reluctant to lend for projects outside the GCC. The success of the Project would serve as a demonstration effect for banks considering financing shipping operations in the Caspian and may also encourage them to consider longer tenors for such investments.

This is a Category B investment because environmental and social impacts associated with GAC’s activities will be limited and easily avoided or reduced through mitigation and management measures that can be readily applied and implemented through adherence to the Company’s policies and procedures. Integrated health, safety, environmental and quality Management Systems are established at each of GAC’s local companies. The Management Systems also support the applicable international maritime codes and standards for GAC’s vessels including the International Maritime Organization (IMO) protocols. GAC is a recognized global operator in the marine, shipping and logistics service industry, and compliance with these codes and standards is a pre-requisite for vessels using international ports and harbors around the world. Effective management of environmental and social issues is also a specific requirement of the GAC’s client base and therefore demonstration of the careful management of risks in this area is essential for GAC’s activities.

Information about potential environmental and social impacts and how they will be addressed by the company is summarized in the Environmental and Social Review Summary.