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Project summary document

Project name:Minsk Retail Network
Country:Belarus
Project number:35362
Business sector:Property
Public/Private:Private
Environmental category:B
Board date:22 March 2005
Status:Cancelled
Date PSD disclosed:
Date PSD updated:
16 February 2005
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Project description
and objectives:

The proposed project is the development of three modern retail outlets, including food, DIY and ancillary retail formats, in Minsk, Belarus. The project involves establishment of a real estate company and an operating company incorporated in Belarus.

The sponsors of the project include UAB SSPC, a sizeable property developer and owner in Lithuania, UAB Senuku Prekybos Centras, the largest DIY retailer in Lithuania and OOO OMA, a large retail company in Belarus.

Transition impact:

The project will have significant backward and forward linkages to local private companies, particularly SMEs. The project will introduce a modern and more efficient form of trading of food stuffs, construction materials and other DIY goods. Due to the importance of this format it will lead to increased overall efficiency of the construction sector and linkages with many other sectors that use, develop or renovate real estate. It could also have extensive impact on improving the overall efficiency and advancement of modern business practices across the economy and with particular focus on the suppliers of locally produced goods, material and tools.

Transfer of skills and best international practice from established and successful international retailers, particularly working in partnership with local businessmen, should also benefit the Belarusian business environment. The broad representation of well-managed retail operators will contribute to transfer of skills, increased competition and effectiveness of overall retail sector in Belarus.

The client:

The beneficiaries are real estate company and an operating company (both to be established). The sponsors of the project include UAB SSPC a sizeable property developer and owner in Lithuania, UAB Senuku Prekybos Centras, the largest DIY retailer in Lithuania and OOO OMA of Belarus.

EBRD finance:

Loan of EUR 13.7 million to the real estate company and an equity investment in the operating company. Co-financing will be sought for part of the Loan.

Total project cost:

EUR 31.1 million.

Environmental impact:

Environmental classification
The project involves the construction and operation of three new retail outlet centres in Minsk, which may result in some environmental impacts. The potential impacts can be readily identified, assessed and mitigated through an environmental analysis. Therefore, the EBRD has classified the project B/0.

Information reviewed during the environmental appraisal
The environmental analysis focussed on reviewing on the Sponsors’ corporate environmental and health and safety safeguard procedures for the future construction and operation of the new retail outlet centres. The review was based on the environmental, health and safety (EHS) questionnaire completed and submitted to the Bank by Senuku as well as EHS information gathered by the Bank on its earlier projects.

Environmental issues
The principle environmental issues associated with this project include those related to the sites chosen for each store and their suitability for the intended purpose, the impacts created during the construction of the stores (e.g. dust, noise, construction waste management, construction traffic) and the impacts associated with the operation of the stores (e.g. increased traffic flows, air emissions, wastewater discharges and solid and hazardous waste management).

The Environmental Analysis showed that Senuku has a comprehensive understanding and control of the EHS aspects of its operations and potential environmental impacts associated with the construction and operation of new stores. The new outlet centres will be designed to conform to Belarusian environment, health and safety requirements as well as to achieve international standards for retail outlets. The site selection and construction of each store will be preceded by environmental site investigation.

The design, construction and operation of the stores and their car parking areas involve a number of environmental mitigation and energy efficiency investments and measures, including drainage and wastewater treatment systems, solid and hazardous waste management as well as noise abatement. Modern European technology is used for heating systems. No environmentally harmful materials or substances (asbestos, formaldehyde, oil-cooled transformers etc.) will be used. Belarusian requirements for fire safety and emergency response will be complied with.

Environmental opportunities
In the design of its stores Senuku incorporates good environmental practice. The procurement of main equipment takes into consideration the environmental performance and energy efficiency. Solid waste management is organised in accordance with principles of waste minimisation and recycling.

Disclosure of information and consultation
Each new retail outlet centre development undergoes an environmental investigations and public consultation in accordance with Belarus law. The competent Belarus environmental authorities take the public comments into consideration when defining the conditions and requirements for the project design and implementation fro the planning, construction and operation permits.

The Sponsors will ensure that the newly established companies will follow the Belarus public disclosure and consultation requirements as well as release locally a summary of the relevant environmental issues associated with the project and the mitigation measures, action plans and other initiatives in accordance with the public disclosure provisions of EBRD’s Environmental Policy (2003) for B-category projects.

Monitoring and reporting
The newly established companies will monitor the environmental impact of the project and its operations in accordance with Belarus environmental law and in consideration to best international practice. The Bank will monitor the companies’ ongoing compliance with applicable Belarusian and EU standards on the basis of annual EHS reports provided by the companies. The companies will also inform the Bank on any changes, incidents and accidents that may have material effect on the environment or safety.

Technical
cooperation:

None.

For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.

Company contact:

Mr Dmitry Nikolaevich Petrusha, Finance Director
OOO OMA
Promyshlenniy pereulok 12A
Minsk 220075
Belarus

P.O.Box 104
220026 Minsk

E-mail: petrusha@oma.by
Tel: +375 17 210 53 94 ; +375 17 244 93 03;
Fax: +375 17 210 53 94 ; +375 17 244 93 03; +375 17 210 52 85

EBRD contact:

Sergei Gutnik, Operation Leader: gutniks@ebrd.com

Business opportunities:

For business opportunities or procurement, contact the client company.

General enquiries:

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com


Project Summary Documents are created before consideration by the EBRD Board of Directors. Details of a project may change following disclosure of a Project Summary Document. Project Summary Documents cannot be considered to represent official EBRD policy.
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