Dragon Capital Real Estate JV

Location:

Ukraine

Project number:

51895

Business sector:

Property and tourism

Notice type:

Private

Environmental category:

B

Approval date:

12 Jan 2022

Status:

Approved

PSD disclosed:

07 Dec 2021

Project Description

The Project consists of an equity investment of up to USD 50 million for the establishment of a joint venture ("JV") with Dragon Capital Investments Ltd (the "Sponsor"). The JV will invest in the acquisition and development of commercial real estate in Ukraine with a focus on industrial and logistics assets in Kyiv region and other regions of Ukraine.

Project Objectives

The Project will support the development and operation of sustainable industrial and logistics real estate in Ukraine.

Transition Impact

ETI score: 75

1) Green: A sample of assets that will be acquired or developed by the JV will be certified with the internationally recognised BREEAM certification.

2) Well-Governed: As part of the Project, the JV will join the GRESB initiative, a leading ESG benchmark for real estate and infrastructure investments globally.

Client Information

DRAGON CAPITAL INVESTMENTS LTD

Dragon Capital Investments Ltd is a limited liability company incorporated in Cyprus and is part of Dragon Capital group. Dragon Capital was established in 2000 and is one of the leading investment and financial services firm in Ukraine.

EBRD Finance Summary

USD 50,000,000.00

Total Project Cost

USD 143,000,000.00

Additionality

The Bank's additionality stems from i) filling the market gap in Ukraine's real estate sector by providing equity financing for the Project; ii) its experience in the field of environmental standards as well as energy and resource efficiency.

Environmental and Social Summary

Categorised B in line with the EBRD's 2019 Environmental and Social Policy (ESP). Equity finance for the Company's investment & operation of industrial and logistics warehouses that have some environmental & social ("ES") issues which can be addressed by standard mitigation measures. ES Due Diligence ("ESDD") has been carried out internally based on the review of the completed ESDD Questionnaire, due diligence reports (2021), Public Grievance Procedure and ES Policy documentation and follow up communication with Dragon Capital. ESDD showed the following: the group complies with national E&S law; the sub-projects are not subject to significant ES risks; the group has contractor management procedures as well as overarching ES risk management procedures. All the sub-projects are not subject to resettlement & economic displacement, significant environmental issues and public grievance. The group has a formal HR policy, including an employee grievance mechanism & labour right of association in line with PR2 and overarching ES policy applicable for each warehouse asset. Dragon Capital is implementing Covid-19 response procedures at the headquarters and all sub-projects in accordance with the national guidelines.

To strengthen their monitoring capacities of construction & operation, contractor management and OHS management, a concise ESAP has been agreed with Dragon Capital. The Sponsor is required to comply with EBRD Performance Requirements ("PR") as well as submit an ES annual report to the Bank. The Bank will monitor the Project's ES performance by reviewing the annual ES report as well as site visits if deemed necessary.

Technical Cooperation and Grant Financing

TC support for this operation will be provided by the Bank's Shareholder Special Fund with contribution by the Sponsor.

Company Contact Information

Volodymyr Tymochko
Volodymyr.Tymochko@dragon-capital.com
+380444927977
www.dragon-capital.com
36D Saksahanskoho Street Kyiv 01033 Ukraine

PSD last updated

09 Feb 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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