In March 2012, Lukoil Overseas signed agreement with international banks consortiums on attracting a loan for up to US$500 million within implementation of the product-sharing agreement on project “Kandym-Khauzak-Shady-Kungrad”. The loan was directed at financing investment programme on development of Kandym Group of fields and increasing mining at Khauzak-Shady field.

This event was the first large-scale loan of private company, working in fuel-energy industry of Uzbekistan. The consortium included the Asian Development Bank (ADB), Islamic Development Bank (IDB), Credit Agricole CIB (France), BNP Paribas (Switzerland) and Korea Development Bank (KDB). The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, provided investment guarantee for US$100 million.

An independent evaluation of the project, made by MIGA, confirmed the completeness and effectiveness of the measures implemented by LUOK in accordance with international practice in the management of environmental and social impacts of oil and gas projects. The project shall comply with MIGA standards on social and environmental sustainability.

In addition LUOK prepared and implemented an action plan for the conservation of biodiversity near the area of wetlands in Dengizkul Lake. Once this project is completed, the company will become the largest employers, the source of foreign currency earnings and revenue for the economy of Uzbekistan.

A group of the ADB and MIGA experts visited production sights on 5-16 November, where LUOK produces and develops gas fields and held talks with the LUOK officials. The visit was aimed at conducting ecologic and social assessment of Kandym-Khauzak-Shady project.

The delegation included representatives of international organizations, such as Normandeau Associates, Inc (U.S.), ERM (UK), and Institute of Zoology of Uzbekistan Science Academy.

Within two week visit, the foreign experts familiarized with current status of gas projects, visited camps, drilling fields, technologies and cleaning establishments. They analyzed system of management of industrial security, protection of labour and environment, etc.

To monitor execution of agreement liabilities on social aspects, experts talked with LUOK workers on work and life conditions, as well as citizens of neighbouring areas.

In the result, it is planned to prepare a report on results of ecologic-social monitoring, which will be assessed by independent experts, including ADB and MIGA experts. Based on expert assessment, further measures on social-economic policy will be adopted by LUOK.