Summary of proposed guarantee
Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.
- Project name
- Turkmenistan Coca-Cola Bottlers
- Project ID
- Fiscal year
- Guarantee holder
Coca-Cola Icecek A.S.
- Investor country
- Host country
- Environmental category
- Date SPG disclosed
- April 30, 2012
- Project Board date
- June 22, 2012
- Gross exposure
- $11.5 million
- Project type
- Strategic priority area
- Environmental and Social Review Summary for Coca-Cola in Turkmenistan
This summary covers an investment by Coca-Cola Icecek A.S. (CCI) of Turkey in Turkmenistan Coca-Cola Bottlers (TCCB) in Turkmenistan. The investor has applied for a MIGA guarantee of $11.5 million (including standby option) for a period of up to 7 years against the risks of expropriation, transfer restriction, and war and civil disturbance.
MIGA is currently covering a total of $2.8 million under the project. The investor has requested modifications that include an increase in the guarantee amount and the addition of transfer restriction and temporary business interruption coverage. The former contract of guarantee will be cancelled and the new contract will be in effect for up to 7 years.
The project consists of the continued expansion and modernization of a soft drink bottling facility in the city of Ashgabat. TCCB bottles, distributes, and sells soft drink products throughout the country.
CCI has been an active investor in this project since 1999. Since 1999, TCCB has continued to grow and meet growing local demand by installing three additional production lines. TCCB has widened its reach by increasing its distribution and warehousing network.
TCCB’s expansion and modernization contribute to the strengthening of local businesses through the procurement of raw materials. Eighty percent of plastic pre-forms are sourced from a local supplier and TCCB procures pallets and propane from the local market. The project’s investment in human capital has continued to grow—from 185 jobs in 1999 to approximately 360 jobs in 2011 with wages and benefits 10 percent higher than the country-wide standards; additional staff is also expected to be added. Workers also benefit from substantial transfer of technical and managerial expertise. There is anticipated employment growth among local suppliers of goods and services as TCCB’s production increases.
The project is aligned with MIGA’s strategic priority of supporting South-South investments.