Honeywell Energy Service Co. Multi-Project Facility

completed

Summary Of Project Information (SPI)Project NameGlobal-Honeywell Energy Service Company (ESCO) Multi-Project Facility (MPF)RegionGlobalSectorProject No008441Projected Board DateJune 18, 1998Company NameHoneywell Inc.Technical Partner and/or Major ShareholdersThe Sponsor – Honeywell Inc. — is a Minneapolis-based, Delaware incorporated, publicly traded, international company that supplies automation and control systems, components, software, products and services for homes and buildings, industry, and space and aviation. It is the world’s largest producer of control systems and products used to regulate and control heating and air conditioning in commercial buildings, and of systems to control industrial processes. The company’s advanced-technology products, systems and services provide customers with benefits, such as energy conservation, environmental protection, improved productivity, enhanced consumer comfort and increased safety. The Company employed approximately 57,500 persons in total operations as of December 31, 1997, with about 30,300 employees in the United States.Project Cost Including proposed IFC investment About US$240 million, over four years, for five ESCOs in five countries. IFC investment will comprise: (a) an equity investment of up to US$25 million; (b) A-loan up to US$30 million; and (c) B-Loan on an ESCO-by ESCO basis, as needed.Location of project and Description of siteFive countries (subject to change), beginning in PolandDescription of Company and Purpose of ProjectThe Honeywell ESCO MPF involves the establishment over a four year period of five or more ESCOs globally (initially targeting Poland). Each ESCO will provide energy efficiency-related services for private sector business and public sector entities to reduce the energy and maintenance costs of such businesses and entities.(a) Description of ESCO Business: The Multi-Project Facility (MPF) will finance the establishment and operation of one ESCO in each country. For this purpose, IFC will enter into an MPF Framework Agreement with the sponsor (Honeywell) that will, through its local subsidiaries, provide turnkey project installation, services, performance guarantees, and management services to the local ESCOs. Typically, the ESCOs will enter into Energy Services Contracts (ESCs) with customers, and will provide a range of energy efficiency services. To fulfil all technical commitments under these contracts, the ESCOs will enter into contracts with Honeywell’s local subsidiaries for turnkey installation, energy efficiency services, performance guarantees, and management services, as needed. In addition to multilateral financing, the ESCOs will seek financing from domestic capital markets, wherever feasible.(b) Purpose of the Project: There is a great need for energy efficiency upgrades and retrofits in the Central and Eastern European region and in other countries where Honeywell is developing ESCO operations. These needs are driven by the technical and financial potential for energy efficiency, the need to transfer and apply the best and most suitable technologies, the need for project development and management expertise, the need to mobilize capital for projects, the need to remove institutional barriers, and the ESCO''s ability to integrate these various elements. Honeywell’s ESCO strategy is designed to consolidate its efforts to promote energy efficiency and savings (on energy, maintenance, and avoided repair and replacement costs) for the end users, provide a high profile signal of its commitment to this market, create a vehicle to mobilize corporate and project financing, and formalize long-term relationships with local partners. Honeywell''s strong reputation, base of reference projects in the region, technical expertise, and financial soundness to offer credible energy efficiency projects will support the ESCOs’ marketing, and generally promote energy efficiency and conservation efforts by the private sector in these target regions.Environmental Category and IssuesThis is a category FI project according to IFC’s environmental review procedure. Honeywell has committed to establish an environmental management system that will ensure that each ESCOs’ investments are consistent with applicable host country environmental laws and regulations as well as applicable World Bank environmental, health and safety guidelines and policies; designate appropriate individuals who will have responsibility for environment; have these individuals attend IFC’s environmental management workshops; ensure that Category A projects are cleared by IFC’s Environmental Division; and submit an annual environmental performance report. Date SPI sent to PIC May 19, 1998“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 974-4384C:\WINNT.EN\Profiles\BMishra\Desktop\My Briefcase\SP8441.DOCMay 14, 1998 5:59 PML:\CPW\Binoy\SP8441.DOCMay 18, 1998 7:50 PM