Egyptian German Company for Industrial Corporation

Project Description

Provision of a USD 50 million long-term working capital facility to the Egyptian German Company for Industrial Corporation ("EGIC" or the "Company") to support their working capital requirements for 2024.

Project Objectives

The project will help secure part of EGIC's hard currency denominated working capital needs for 2024 amidst the current volatile economic environment to provide a stable and reliable supply of products to the market. Furthermore, the Loan will help diversify the Company's access to essential USD funding to import its raw materials and decrease its reliance on short term funding.

Transition Impact

ETI score: 67

Primary quality - Resilient: In light of the tightening foreign currency availability, the envisaged long-term working capital financing will support the resilience of the Borrower by securing their imported raw material needs for the year 2024.

Secondary quality - Inclusion: EGIC continues its commitment to impact human capital development within the plumbing sector as well as its professionalization by: i) establishing the country's first dedicated vocational school for sanitary and plumbing occupations in partnership with Egypt's Ministry of Education and Technical Education (MoETE); and 2) broadening the roll-out of its entry-level training for young plumbers in several under-served regions of Egypt.

Client Information

EGYPTIAN GERMAN COMPANY FOR INDUSTRIAL CORPORATE SAE

Egyptian German Company for Industrial Corporation S.A.E. ("EGIC or the "Company") is an Egyptian joint stock company specialized in manufacturing plastic water pipes. The Company is the leading player in the local market.

EBRD Finance Summary

USD 50,000,000.00

Total Project Cost

USD 50,000,000.00

Additionality

Financing Structure: The EBRD facility will provide stable working capital funding compared to the current short-term working capital facilities available to the Borrower.

Non-Financial Additionality: EGIC will launch a new Leadership Incubator Training Program that will enhance staff members' skills towards promotion into middle-managerial and more senior roles within the Company. EGIC will dedicate an agreed quota for female staff to foster more open and diverse career progression opportunities for them.

Environmental and Social Summary

Categorised B (2019 ESP). EGIC is an existing client of the EBRD and has been exhibiting well qualified management and reporting practices as part of their standard ESMS which is fully and systematically integrated into broader company management and certified to ISO 9001, 14001 and 45001 by independent bodies. The Bank's due diligence included a detailed review of their previous audit reports, E&S documentation and a site visit to one of the main operation sites in the industrial zone of 6th of October city, Egypt. Due diligence focused on the corporate systems and current performance as the transaction involves the provision of working capital needed for importing essential raw materials needs amidst the current volatile FX and economic environment. The site visit confirmed that the facility operates in accordance with the HSE policies of EGIC, which in turn follows the Bank's Performance Requirements. No major non-compliance was identified from the previous audits. EGIC demonstrates a strong leadership on HSE both at corporate and facility levels while ensuring that Contractors align with EGIC's HSE requirements via contracting process. There is a grievance mechanism in place with a good track of monitoring records. Due diligence did not identify any significant issues related to PR2 and PR4. The key environmental aspects included compliance with emission levels on SOx, COx and NOx subject to regular monitoring and resource efficiency. In terms of workplace air quality management, regular monitoring practices for fugitive air emission sources is deemed as essential. There is no environmental non-compliance reported. EGIC also adopted several resource and energy efficiency measures while exploring opportunities for on-site generation of renewable energy. The project is considered Paris aligned for climate mitigation as it is not defined as high-emitting and it features in the joint MDB "aligned list". The PC risk score of the project is 2. The project is deemed not significantly exposed to physical climate risks and is considered Paris aligned for climate adaptation. There is no GET component associated with the project. An ESAP has been developed and agreed prior to the Final Review in line with the findings of the site visit associated to those PRs.

Technical Cooperation and Grant Financing

N/A

Company Contact Information

Omar Safeyeldin
omar.safeyeldin@egic.com.eg
+2 01001691313
https://www.egic.com.eg/
53, al manial street, Cairo, Egypt

PSD last updated

21 Aug 2023

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