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Summary of Project Information (SPI) |
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| Project number | 9867 |
| Project name | SEF LP-GAZ |
| Country | Kazakhstan |
| Sector | Utilities |
| Department | Global Manufacturing & Services |
| Company name | LP-Gaz, LLP |
| Environmental category | B |
| Date disclosed | November 29, 1999 |
| Status | Completed |
| Previous Events | Invested: February 23, 2001
Signed: June 25, 2000
Approved: December 30, 1999 |
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- Technical Partner and/or Major Shareholders
The company is owned equally by Mr Roustem Tursunbayev and Mr Kanat Dosanov, both of whom have extensive experience in the Liquefied Petroleum Gas (LPG) distribution industry in Kazakhstan.
- Project Cost Including proposed IFC investment
The total project cost is $4 million. The IFC will provide financing of $2 million, consisting of an A loan of $2 million, of which $500,000 will be convertible into equity.
- Location of project and Description of site
The project involves the establishment of four LPG distribution centers in Ust-Kamenogorsk, Astana, the southern suburbs of Shymkent and the Saryn-4 microdistrict of Almaty.
- Description of Company and Purpose of Project
The project involves the greenfield development of a network of LPG distribution centers. From these distribution centers, LP-Gaz will provide LPG in cylinders and bulk tankers to domestic consumers for use in home cooking and, to a lesser extent, heating. The project will have two phases. The first phase is already underway and involves the construction of two stations in Almaty and Shymkent. During the second phase, two stations will be built in Astana and Ust-Kamenogorsk. Work on these two stations is expected to begin in mid-2000.
The company is one of the first small niche operators to emerge after the privatization of the regional LPG distribution centers. Such SMEs provide the necessary competition to ensure that regional distributors do not abuse their strong market position. Although a number of small LPG filling stations have recently been established, they generally have limited services, low safety standards and do not provide a stable supply of LPG to consumers.
LPG is mainly used as a fuel for cooking, where its convenience provides a major advantage over alternative fuels such as wood, coal, kerosene, and natural gas. LPG is also more thermally efficient and cleaner (odorless, ash-free, practically sulfur-less and produces less carbon dioxide) than these alternatives. While natural gas is more convenient to the consumer than LPG, it can only be delivered through a natural gas pipeline, which is expensive to install. The company will help provide a reliable supply of LPG to domestic users, which will lead to an increase in domestic living standards. The investment will also ensure that the company operates according to acceptable safety standards.
- Environmental Category and Issues
This is a category B project according to IFC's environmental review procedure. Out of the four sites, two, which were formerly vacant and have been already purchased, are located in industrial areas with no environmentally sensitive areas in their vicinities. These two lots were acquired through willing buyer/seller commercial transactions. The sponsor will confirm that the two additional sites to be acquired are not located near sensitive environments and that the acquisition is also being carried out as a willing buying/seller transaction. Since the sponsor will use state of the art equipment, they will ensure that only minor amounts of gas will be released during connection and disconnection. The distribution centers will only generate minor amounts of liquid effluent. Sanitary sewage will be disposed in septic tanks. The terminals will only produce minor amounts of domestic solid waste, which will be disposed in accordance with local requirements. Copies of the accident prevention, maintenance, safety and employee training programs satisfactory to IFC will be submitted to IFC prior to first disbursement. Each local filling plant will have an employee responsible for handling local health and safety questions and for following the company rules. By project completion, the sponsor’s operations will be in full compliance with the relevant World Bank guidelines and policies and with the environmental standards of the government of Kazakhstan. The sponsor will annually submit to IFC a monitoring report to ensure ongoing environmental compliance during the life of the project. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the proposed project is being designed to meet Government of Kazakhstan requirements, and World Bank policies, and environmental, health and safety guidelines.
The is from the InfoShop.
| Host country location of environmental documents | The ERS will be displayed at the gates of the existing Almaty and Shymkent sites and at the gates of the proposed sites in Astana and Ust-Kamenogorsk. It will also be displayed in the company's distribution vehicles. |
Date SPI sent to InfoShop November 29, 1999.
“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”
For Additional Information contact:
Corporate Relations Unit
Telephone: (202) 473-7711
Fax: (202) 974-4384 |
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| Environmental documents for this project are available at http://www.ifc.org/projects and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html). |
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