Ikea Moscow

completed

- 2 -International Finance CorporationA Member of the World Bank GroupEnvironmental Review Summary (ERS)Project Name Russia - IKEA MOSRegion EuropeSector ManufacturingProject No. 0095891. This project involves the construction and operation of a 31,000 sq. meter geenfield IKEA furniture store (and associated car park) on a 60-hectare site in the municipality of Khimki, on the outskirts of Moscow. All furniture offered for sale will meet IKEA global environmental standards for the manufacture and assembly of furniture. The store may eventually become part of a larger shopping complex, which would include additional retail outlets such as a hypermarket, a home improvement center, an electrical goods retailer, a food court, a multiplex cinema, and a gallery of 20 to 30 small shops. All infrastructure (electricity, water supply, sewerage, roads) will be supplied through connection to existing municipal systems. The store is planned to be operational in April 2000, and will employ over 350 people.2. This is a category B project, according to IFC’s environmental review procedure because a limited number of specific environmental impacts may result which could be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor to IFC’s technical and environmental department staff. The following potential environmental, safety and health impacts of the project were analyzed:· Site selection, land acquisition, and potential contamination;· Solid waste management;· Sewage treatment;· Fire prevention and life safety; and· Employee health and safety (including training programs). The Company has presented plans to address these issues and demonstrate that the proposed project will comply with applicable Russian Federation and World Bank requirements. The information about how these potential impacts will be addressed by IKEA MOS is summarized in the paragraphs that follow.3. Site Selection, Land Acquisition, and Potential Contamination. The site, which is leased from the local municipality on a 49+ year lease, is an undeveloped parcel of land alongside Leningradskii Prospect outside the Moscow City limits. It is located 25 km from the Kremlin and 5 km from the Sheremetevo Airport. There has been no previous occupancy of the site nor has it being used for any other purpose. All federal and local permits necessary thus far to develop the property have been secured. According to IKEA, there is no potential for contamination of the project site from past activities.4. Solid Waste Management. Most of the waste generated by the store will be packaging material. The Company will put in place a comprehensive waste sourcing and recycling program for packaging materials. IKEA’s aim worldwide is to use a single packaging material only to make recycling easier. Most IKEA packaging consists of corrugated cardboard with a high content of recycled material. No hazardous waste will be generated. Any solid waste that is not recycled will be collected by the local authorities and disposed in a licensed municipal landfill.5. Sewage Treatment. Employee- and customer-generated sanitary sewage will be discharged to the municipal sewage system under an agreement with the local authorities.6. Fire Protection and Life Safety. IKEA MOS will comply with the fire protection and life safety systems set forth in the standards that the authorities have approved for the project. The building will also have in place an Emergency Response Program (ERP) — this program will include evacuation procedures for all types of emergencies, public address systems, employee training, inspections and coordination with local authorities.7. Employee Health and Safety. IKEA will implement programs to ensure the health and safety of all employees. In addition, employees will take part in IKEA’s worldwide environmental training which is in three parts: General environmental knowledge; IKEA’s global environmental action plan; and lastly a more detailed training based on individual needs. 8. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that IKEA MOS’s proposed project would meet World Bank environmental, health and safety policies and guidelines and Russian Federation requirements.9. IFC will monitor ongoing compliance with World Bank environmental, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by IKEA MOS and by conducting periodic site reviews during project supervision.