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| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. |
Summary of Project Information (SPI) |
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| Project number | 9862 |
| Project name | SEF CASPI Limited |
| Country | Kazakhstan |
| Sector | Accommodation & Tourism Services |
| Department | Global Manufacturing & Services |
| Company name | CASPI Limited |
| Environmental category | B |
| Date SPI disclosed | August 29, 2000 |
| Projected board date | September 28, 2000 |
| Status | Completed |
| Previous Events | Invested: December 19, 2001
Signed: October 4, 2000
Approved: September 22, 2000 |
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| Project sponsor and major shareholders of project company |
| The project sponsor is Caspi Ltd., a limited liability Kazakh company, which was formed in 1994. Major shareholder of Caspi Ltd. is Khan Tengri Hotels (81%), which was established in 1997 and owns number of hotels in the Western part of Kazakhstan (Caspian side oil development area). Another shareholder of the company is Kazakhstan Caspi Shelf Company (19%). |
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| Total project cost and proposed IFC investment |
| Total project cost is estimated at $5.7 million. The proposed IFC investment is a $2.5 million A Loan for IFC's own account. |
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| Location of project and description of site |
| The principal locations of the project are in town of Atyrau and small south-western settlement Bautino in Western Kazakhstan, which is the main oil and gas producing area of the country. The oil and gas export revenues, combined with the Caspian Sea sturgeon contribute about 22% to the country's GDP. According to Economist Intelligence Unit, the oil and gas sector alone accounts for 44% of total exports and 85% of total FDI flow of Kazakhstan. The region's enormous oil and gas reserves have attracted scores of foreign oil and gas companies (Chevron, Shell, British Gas/Petroleum, Total, Agip and others) since the country gained independence from Soviet Union in 1991. However, the region's basic infrastructure and services are under-developed and exploration work is a real challenge for foreign oil and gas companies. To address the shortage of export capacity, a consortium led by Chevron is in the process of building a $2.3 billion pipeline, that will transport Caspian Sea oil to the Black Sea. An agreement has been signed for another pipeline project which would connect the western Kazakhstan fields with Mediterranean Sea. These projects will clearly boost Kazakhstan's oil and gas production and facilitate developments of new fields, but they will also create an urgent need for accommodation for workers in the oil and gas industry . As the only incumbent Western hotel, the Caspi Ltd. is well placed to capitalise on this opportunity. |
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| Description of company and purpose of project |
Caspi Ltd. is located in the town of Atyrau, one of the sites of extensive oil exploration in western Kazakhstan. The Company owns Chagala Hotel, a three-star hotel in Atyrau, and a small guesthouse in settlement Bautino, south of Atyrau and close to the Caspian oilfields, a site of the marine-supply base constructed by Offshore Kazakhstan International Operating Company (OKIOC).
The proposed project consists of the expansion and development of the Chagala Hotel and of the guesthouse in Bautino. The hotel and guesthouse offer rooms in $80-$120 range and the target market is oil workers and associated staff involved with the oil exploration and development work in the Caspian. This will be IFC's first investment in this strategically important area of Kazakhstan, which is expected to be the prime driver of growth for the next twenty years. The expansion of the Chagala Hotel will meet the growing needs of the international oil companies and related support companies that are developing the new Kashagan oilfield in the Caspian Sea, which is estimated to have reserves several times that of the North Sea. Following this discovery, neither the Chagala Hotel nor the Bautino guesthouse can meet demand.
IFC has a strong role to play in this project through the provision of long-term funding. Term financing is practically unavailable in Kazakhstan and IFC's financing will enable the company to expand the Chagala Hotel and Bautino guesthouse to meet the needs of international clients. IFC’s participation in the project is also expected to facilitate the company's future access to international borrowing. The expansion of the Chagala Hotel and the Bautino guesthouse is a vital component of the business infrastructure in Western Kazakhstan as foreign businessmen require such accommodation to operate. As such, this expansion and development work will contribute to attracting foreign investment into Kazakhstan. The project will provide direct employment to the company's employees and indirectly to hundreds of workers providing goods and services to the company. |
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| Environmental and social issues - Category B |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects, because a limited number of specific environmental and/or social impacts may result which, can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.
To view the environmental documents for this project, click here
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| Location of environmental documents in locally affected community |
Chagala Hotel
K.Ismagulov Str., #6
Atyrau, 465005
Republic of Kazakhstan |
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| To contact the project company, please write to: |
Tim Abson, General Director, Caspi Ltd.
K.Ismagulov Str., #1, Atyrau, 465002, Kazakhstan
Tel: (7-31222) 54033
Fax: (7-31222) 54034 |
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