Translated version of this PSD: Georgian
EBRD is considering providing a secured long-term loan of up to US$ 33 million to Smart Retail, JSC to finance the expansion of the Smart retail chain in Tbilisi and regional cities of Georgia.
The Project’s transition impact is derived from the demonstration effect of expanding the modern retail format in Georgia, especially in the regions outside of Tbilisi. Furthermore, the roll-out of the Smart store network is expected to generate strong backward linkages with local suppliers by providing new business opportunities, but also by incentivising local companies to produce and deliver products of consistent quality. Finally, the Project will also set standards of corporate governance and business conduct in the retail sector in terms of advanced sustainable energy solutions, environmental, health and safety standards as well as financial reporting.
Smart Retail is a grocery retail operator owned by Messrs Samson and Levan Pkhakadze, Georgian entrepreneurs.
Senior long-term loan of up to US$ 33 million.
US$ 56 million.
The Project has been categorised B in accordance with the EBRD Environmental and Social Policy 2008. Environmental and social due diligence (ESDD) has been undertaken by the Bank’s Environment and Sustainability Department based on a review of the Company’s corporate management systems and relevant information provided by the Company as well as a site visit and discussions with the Company’s personnel.
The Bank's environmental and social due diligence confirmed that the Company has adequate corporate systems in place to manage their environmental, health and safety (EHS) issues and that at both the corporate and store level the Company is substantially compliant with local EHS regulatory requirements. All stores have dedicated EHS and hygiene engineers and a HR manager. The Company has advanced supply chain management system adhered to the international standards and undertakes regular audits of the suppliers, hence contributing to the establishing of the high quality standard in the industry and improving the suppliers’ quality performance. However, the ESDD also identified a number of H&S risks related to the construction activities and the fire safety risks present at the operational sites.
An Environmental and Social Action Plan (ESAP) has been developed, and should be agreed with the Company, to address the necessary mitigation measures and improvements which will allow the Company to achieve compliance with national regulations and the Bank’s PRs. Specifically, the ESAP requires the Company to implement corrective measures to improve EHS management at the construction sites and improve fire safety performance at the operational sites.
The Bank will monitor the Company’s environmental and social performance and implementation of the ESAP through annual E&S reports.
An Energy Efficiency Audit was carried out within the framework of the Bank’s Regional Energy Efficiency Programme for the Corporate Sector. This Programme is funded by the EU Neighbourhood Investment Facility, the Western Balkans Fund, the ETC Fund, EBRD Shareholder Special Fund, the Netherlands, Greece, Germany and Italy.
Furthermore, a market study of the Georgian grocery retail sector was commissioned to verify the market’s development, its trends and growth prospects. The study was financed through the Early Transition Countries (ETC) Fund. Since its establishment the following bilateral donors have contributed to the ETC Fund: Canada, Finland, Germany, Ireland, Japan, Korea, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Taipei China and the United Kingdom.
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