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Mongolia
55099
Agribusiness
Private
12 Jun 2024
Exploratory
08 May 2024
The provision of a long-term, sustainability-linked loan of up to US$ 51.65 million to MCS Coca Cola LLC, a leading producer and distributor of soft drinks in Mongolia.
The EBRD financing will support MCS Coca Cola to (i) renew, expand and modernise some of its production equipment and facilities, and (ii) realign its capital structure by refinancing financial debt to extend its maturity.
Furthermore, as part of this project and with the support of the EBRD and E&Y Sustainability France, MCS Coca Cola prepared its first Sustainability Linked Loan Framework.
ETI score: 60
The transition impact of the project is expected to derive from the Green quality. It is based on the sustanability-linked loan targets under the SLL Framework, which entail that gradually by 2030: (i) water usage efficiency is targeted to improve by 25 per cent ; (ii) 51 per cent of all plastic used in packaging is targeted to be recycled, (iii) plastic waste collection rate is targeted to increase to 100 per cent. The project is assessed to have a GET share of 100 per cent.
MCS COCA-COLA LLC
MCS Coca Cola LLC was established in 2001 and is incorporated in Mongolia, where it operates as a leading producer and distributor of soft drinks (including Coca Cola brands). MCS Coca Cola is indirectly part of MCS Group and is majority owned by Mongolian businessmen Mr. Odjargal Jambaljamts and Od Jambaljamts. MCS Group is a leading and diversified business group in Mongolia that is primarily engaged in telecommunication, beverages production and FMCG distribution, property development, energy infrastructure services and mining.
USD 51,650,000.00
The EBRD financing will be in the form of senior, long-term, sustainability-linked loan, and it will consist of a capital investment of up to US$ 40.4 million and a refinacing facility of up to US$ 11.25 million.
USD 51,650,000.00
The EBRD financing includes a combination of sizeable loan amount, long loan tenor, and dual US dollars and Euro loan currency, which are the required financing features. MCS Coca Cola would not be able to obtain such financing from other lenders because of the required loan size, limited presence of international banks and security requirements of local commercial banks for loans of such size.
Categorised B (ESP 2019). The installation of and upgrade of bottling lines and packaging equipment, distribution fleet, and in operation assets are not associated with significant environmental and social (E&S) risks. The project will support the first sustainability-linked loan framework in Mongolia and address ESG challenges faced by the soft beverage industry. Of all the project elements, it is noted in particular that the sustainability KPIs include increasing recycled PET content and collection of bottles for recycling. Environmental and social due diligence was undertaken internally and included completion of a standard E&S questionnaire, review of additional documentation provided by the Company, and follow-up on key selected issues. As anticipated, and given that these are Coca Cola compliant facilities, management of environmental and social issues is at a very high level. MCS Coca Cola has embedded E&S issues into its framework of policies and procedures many of which are set at the corporate level. There is dedicated staffing across a range of areas including environment, health and safety, road safety, human resource management and supply chain management. The Company is certified and will otherwise renew its ISO 9001 (quality), 14001 (environment), 22000 (food safety), and 45001 (health and safety) management systems and relevant certificates as needed as part of the Environmental and Social Action Plan (ESAP). For supply chains, the Company undertakes an ESG assessment of its suppliers. In terms of labour and working conditions for PR2, the Company has a range of human rights policies related to a range of topics including non-discrimination, equal opportunity, workplace sexual harassment, overtime, and additionally supports its employees’ right to join a labour union. On resource use and pollution for PR3, the factory has a wastewater treatment facility, an emissions free boiler house, hazardous waste storage and management, and a PET waste recycling project. For health and safety for PR4, the Company is certified to the ISO 45001 system with all tasks, including those of contractors, subject to risk assessment and control. All employees receive routine health checks. The Company will be required to continue compliance with the PRs through the commitments in the legal agreements and provide annual E&S reporting to the Bank.
The Project will benefit from the following Technical Cooperation assignments:
– Project Preparation Support Programme funded by the JECF to partially cover the legal due diligence costs
– FINTECC grant to support MCS Coca Cola’s efforts to prepare and implement SLL Framework.
Boloroo Tsogtbaatar
Info@mcscocacola.mn
(+976) 70165555
mcscocacola.mn
Gachuurt Road 104, Amgalan 13260, Bayanzurkh District, Ulaanbaatar, MONGOLIA
08 May 2024
Further information regarding the EBRD’s approach to measuring transition impact is available here.
For business opportunities or procurement, contact the client company.
For business opportunities with EBRD (not related to procurement) contact:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com
For state-sector projects, visit EBRD Procurement:
Tel: +44 20 7338 6794
Email: procurement@ebrd.com
Specific enquiries can be made using the EBRD Enquiries form.
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.
More information on the EBRD’s practices in this regard is set out in the ESP.
The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
Specific requests for information can be made using the EBRD Enquiries form.
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.