DESCRIPTION
Founded in 2001, Great Rich Technology Co., Ltd (GRT, the Borrower) is a premier Chinese manufacturer specializing in functional coating composite materials.
Having established three production facilities housing over 30 advanced production lines in China, GRT is establishing its first overseas manufacturing base in Türkiye. This move aims to enhance its capacity to produce energy-saving and emission-reducing film materials, catering to the increasing global demand for such materials that help reduce greenhouse gas emissions. These innovative film materials will play a crucial role in reducing industrial carbon footprints in GRT’s targeted emerging markets while facilitating technology transfer through localized production.
The proposed Project aims to finance the establishment of GRT’s first manufacturing facility abroad, to be situated in Kırklareli, Türkiye. This new plant will produce primarily energy-saving window films, materials for capturing CO2 and volatile organic compounds (VOCs) absorption materials, and paint protection films.
International Finance Corporation of the World Bank Group (IFC) is expected to be a co-financier.
ENVIRONMENTAL AND SOCIAL INFORMATION
Applicable Policy and Categorization. The Project is co-financed with the IFC. In alignment with the common approach, the Project is governed by AIIB’s Environmental and Social Framework (ESF), including the Environmental and Social Standards (ESSs) and the Environmental and Social Exclusion List (ESEL). ESS 1 (Environmental and Social Assessment and Management) is applicable to address the Project’s environmental and social risks and impacts. ESS 2 (Involuntary Resettlement) is not triggered, as the Project will not result in involuntary resettlement. ESS 3 (Indigenous Peoples) is also not applicable, as no communities meeting the ESS 3 definition of Indigenous Peoples are present in the Project vicinity. The Project is classified as Category B, reflecting its site-specific, reversible, and non-significant environmental and social (ES) risks and impacts.
Environmental and Social Instrument. The Environmental and Social Impact Assessment (ESIA) incorporates an Environmental and Social Management Plan (ESMP), which is currently being finalized by the client’s appointed ES consultants. Additionally, an Environmental and Social Management System (ESMS) will be established by the client to systematically manage the ES risks and impacts. AIIB Project team (PT) will review these instruments during the Environmental and Social Due Diligence (ESDD). This ESDD will also identify gaps with AIIB’s ESF and propose an Environmental and Social Action Plan (ESAP) to align the Project with AIIB’s ESF principles and standards.
Environmental Aspects. The Project is proposed within an established Organized Industrial Zone (OIZ) with existing utilities and waste management infrastructure. Surrounding land use is predominantly industrial, with the nearest residential receptors located approximately 4 km from the site; potential construction- and operation-phase impacts (noise, air emissions, and dust) will therefore be assessed and managed through a comprehensive ESMP covering, inter alia, topsoil protection, chemical handling, spill prevention and response, waste management, and environmental monitoring. During operation, the facility is expected to generate volatile organic compounds (VOCs) from solvents, adhesives, and coating processes. The Project is proposed to install a Regenerative Thermal Oxidizer (RTO) with heat recovery, designed to achieve up to 99% VOC abatement in compliance with Industrial Air Quality Control Regulations while improving energy efficiency and reducing fuel-related emissions. A critical habitat, assessment is ongoing. Preliminary analysis indicates that the project area is not a part of any critical habitat and does not have any protected natural areas in the immediate surrounding. However, the project team will review the findings of critical habitat assessment and accordingly if required, necessary measures will be included in the ESAP. In addition, the Project is also expected to generate hazardous wastes, including chemical residues, spent catalysts, metal compounds, VOC residues, and batteries, necessitating robust segregation, storage, transport, treatment, and disposal procedures in line with good international industry practice. PT will review the ESIA and ESMP to identify gaps and corrective actions through an ESAP will be agreed accordingly.
Social and Gender Aspects. The client acquired the land for the Project from a commercial entity that had held the plot for over a decade, during which time it remained idle. The due diligence process will include a review of land use. Should any legacy issues or unresolved matters relate to land acquisition and resettlement be identified, corresponding mitigation measures will be incorporated into ESAP. Key social risks associated with the Project include community health and safety, labor and working conditions and occupational health and safety. To address these risks, an ESIA is being finalized, which includes an ESMP. Additionally, to mitigate risks of sexual exploitation and abuse (SEA), sexual harassment (SH), and gender-based violence (GBV) in the workplace, the Project will develop and implement a Code of Conduct explicitly prohibiting SEA, SH and GBV.
Occupational Health and Safety, Labor and Employment Conditions. Occupational Health and Safety (OHS) risks associated with the Project arise from exposure to rotating/moving equipment, noise, vibration, electrical hazards, chemical handling, and working at heights. The related risks have been assessed by draft ESIA. To address these risks, the Project will prepare an OHS Management Plan including control measures. Additionally, an Emergency Preparedness and Response Plan (EPRP) will be developed to ensure systematic responses to potential incidents.
Stakeholder Engagement, Consultation and Information Disclosure. During the preparation of the ES instruments, the Project conducted consultations with key stakeholders. A Stakeholder Engagement Plan (SEP), as part of ESMP, will be prepared to guide activities throughout the Project cycle. The ES instruments will be timely disclosed by both the client and the Bank in an appropriate manner to the public.
Project Grievance Redress Mechanism (GRM) and Monitoring Arrangement. Two GRMs will be established to receive, acknowledge, evaluate, and resolve complaints related to ES issues. The first GRM is designed for external stakeholders, and the second GRM is dedicated to Project workers. Records of grievances received, corrective actions taken, and their outcomes will be properly documented and maintained. The information of established GRMs and Bank’s Project-affected People's Mechanism (PPM) will be disclosed in an appropriate and timely manner. More detailed arrangements for ES monitoring and reporting, including reporting format and the frequency, will be discussed and determined during ESDD.
