Kaufland Regional Expansion - Romania

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The EBRD is considering making a loan of up to EUR 150 million to Kaufland in Bulgaria and Romania, to finance the expansion of its compact discounting hypermarket format in these countries. The expansion will mainly focus on small and medium sized towns. The project is the third in regional co-operation to finance the Schwarz Group’s strategic expansion. The proposed project will contribute to increased competition mostly in the secondary cities and relatively disadvantaged areas of Bulgaria and Romania, which are the focus of Kaufland’s expansion strategy. It will bring a new format of modern retail and the convenience of discounting hypermarkets shopping to large portions of the population. Procurement of products locally will generate strong backward linkages and encourage local producers to process according to best business practice. The project will also benefit both countries through the advanced logistic systems and infrastructure that are closely correlated to the group’s store rollout plans. Kaufland Bulgaria EOOD, a company organised and existing under the laws of Bulgaria and Kaufland Romania s.r.l., a company organised and existing under the laws of Romania. Up to EUR 150 million long-term loan (including syndication) to partially finance the further expansion of Kaufland in Bulgaria and Romania. EUR 300 million. This project was categorised B under the EBRD’s Environmental and Social Policy 2008. Due diligence focused on the Kaufland Bulgaria and Romania’s capacity and systems to manage environment, health, safety and labour issues in the development and operation of stores. Due diligence has confirmed that the Companies’ stores are designed, built and operated to EU environmental and occupational health and safety (OHS) standards and stores have emergency evacuation plans for life and fire safety; and the Companies have systems in place to manage their environmental impacts, OHS risks and human resources. The Bank has an existing loan to Kaufland Romania and has received satisfactory reporting on environment and social matters to date. Under the proposed project the Companies will be required to comply with the Bank’s Environmental and Social Policy 2008 Performance Requirements applicable to the project (specifically PRs 1-8 and 10). The Bank will monitor the Companies’ environmental and social performance for the lifetime of the loan through annual environmental and social reporting and via periodic site visits. The Companies will be required to immediately notify the Bank of any incidents or accidents likely to have an effect on the environment or worker and public safety. None. Schwarz Finanz und Beteiligungs GmbH & Co. KG Sekretariat Finanzen Stiftsbergstr. 1 D-74172 Neckarsulm Germany