The project sponsor is Kuibyshevazot Open Joint Stock Company, existing IFC client. Located in Togliatti, Samara region, KuAz is the leading Russian manufacturer of caprolactam (the raw material for synthetic fibers, engineering plastics, automotive and other downstream products) and one of the top Russian producers of nitrogenous fertilizers.

The total project cost is estimated at around US$54 million. The proposed IFC investment is a senior loan of up to US$10.0 million.

125.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	125.0
Equity

* These investment figures are indicative

Project investments will be implemented in Togliatti, Samara region, Russian Federation.

Investment to be financed under the proposed project will help KuAz implement its energy efficiency and clean production program, and ultimately achieve reduction of greenhouse gases emissions and reduction in energy consumption.

The proposed loan will provide KuAz with long term financing that is currently not possible to secure from commercial banks or capital markets locally, to implement energy efficiency and clean production program. Also, as a result of the proposed investment the company would benefit from gaining further access to World Bank Group''s experience in the area of energy efficiency and cleaner production, helping secure successful implementation of the project.

The proposed loan will support three projects, each individually small in the context of KuAz which is a large chemical manufacturing complex spread over approximately 300 hectares.

The projects are replacement of :

an old alkaline waste incinerator, with a new unit with modern air pollution control equipment, and heat recovery equipment. The new unit will have much lower emissions to air and deliver energy savings to KuAz;
steam reducing valves by steam turbo-generators; and
several old low concentration nitric acid production lines, with a new energy efficient unit. The new unit will have lower emissions and deliver energy savings to KuAz;

The aggregate annual reduction in GHG emissions attributable to these projects is estimated at around 110,000 tonnes CO2 equivalent. Simple payback on energy cost savings will be less than four years. In addition to energy and cost savings, the projects will reduce KuAz’s pollutant discharges to air and water.

Potential adverse E&S risks arising from the Project relate to safety in construction. In the context of KuAz, a major chemicals manufacturing site with continuous ongoing construction and maintenance activity these risks are considered minimal. The only offsite impact of the Project will be to reduce conventional pollutant and GHG emissions.

Kuaz is a long-standing IFC client, and has progressively improved its environmental performance in the course of the 8 years relationship with IFC. The proposed project will substantially correct outstanding non-compliances with IFC’s EHS guidelines, and one other outstanding item is under management.

Due to the minimal potential adverse E&S impacts of the proposed investment, this is considered an E&S Category C project.