Project number:


Business sector:


Notice type:


Environmental category:


Approval date:

12 Jun 2001



PSD disclosed:

02 May 2001

Project Description

Proposed financing for an expansion of primarily the food retail businesses in Estonia and Latvia through the acquisition and development of retail properties and the financing of retail operations.
The project aims to expand Kesko’s retail operations in the Baltic states and would allow the companies to have appropriate long-term debt funding as well as an equity contribution by the Bank. Proceeds would be used to finance real estate transactions as well as operations.

Transition Impact

The project is expected to increase efficiency and competition and lead to positive developments in the supply chain, including the development of skills.

The Client

The borrowers and investee companies are the Kesko real estate companies in Estonia and Latvia. The operating loan would benefit the Estonian and Latvian operating companies. The operations will be undertaken in a chain of food supermarkets, a chain of DIY/hardware stores, an agromachinery store and a food logistics centre in Estonia. Kesko OYJ, the leading food retailer in Finland, is the sponsor.

EBRD Finance

The EBRD transaction includes long-term loans (€50.4 million) and equity investments (20 per cent shareholding) in Kesko’s real estate companies in Estonia and Latvia as well as an operating loan of €10.9 million. Fifty per cent of the long-term loans would be syndicated to commercial banks.

Project Cost

Total project cost is €122.7 million.

Environmental Impact

The project was screened B/0, requiring an environmental analysis of the company’s future operations. The analysis was performed through a review of the company’s web site and a follow-up questionnaire. The company confirmed that new stores will be constructed in accordance with national and Finnish standards, and the design will incorporate many ecologically beneficial elements (energy efficiency, recyclability of various components). The stores will be operated in compliance with national and Finnish standards and in accordance with Kesko’s own environmental policy, which includes such elements as energy saving, improved logistics, reduced packaging and improving waste management. Finally, the company confirmed that supplied products will be required to comply with national, Finnish and EU product standards. Both own brand and other label products are audited by the company before they are accepted for sale in the stores.

Technical Cooperation


Company Contact


Business opportunities

For business opportunities or procurement, contact the client company.

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