Krenholm

completed

Summary Of Project Information (SPI)Project NameEstonia - KrenholmRegionCentral and Southern EuropeSectorProject No009369Projected Board DateNovember 29, 1999Company NameKrenholm GroupTechnical Partner and/or Major Shareholders Krenholm is 100% owned by Borås Wafveri AB, a publicly traded Swedish textile company.Project Cost Including proposed IFC investment The total project cost is up to US$41.7 million equivalent, including an IFC A loan of up to US$6 million equivalent and an IFC C loan of up to US$3 million equivalent for IFC''s account. The financing plan also includes an IFC B Loan of up to US$9 million equivalent for the account of at least two participant banks. Location of project and Description of site The company and project are located in the city of Narva, Estonia and on an island in the River Narva, which defines the border with Russia. Description of Company and Purpose of Project The Krenholm Group, established in 1857, is a vertically integrated Estonian producer of cotton-based textiles, including bed-sheets, towels, upholstery fabrics, garments, and furnishings. With annual sales of about US$75-85 million, Krenholm is the largest industrial company in Estonia. Over 80% of the company''s sales are exported. The proposed project includes investments in new machinery and equipment for the various operating units (spinning, terry and finishing); an expansion of the sewing plant; installation of energy efficient lighting; and construction of two boiler-houses for steam generation. The project also includes the purchase of the land that the company occupies, an increase in working capital, and debt restructuring. The investments are expected to de-bottleneck the operations, improve quality, decrease operating costs and improve the environmental aspects of the operations. Environmental Category and Issues This is a category B project according to IFC''s environmental and social review procedure. Environmental and social issues associated with this project include: air emissions; water and wastewater management; solid waste management; energy reduction initiatives; occupational health and safety; and social responsibility, as the company is the main employer in the area. Krenholm will as part of the project install two new low emission boilers, which will reduce the load on a local highly polluting power station. At the same time it will allow Krenholm to initiate other energy saving initiatives. Other environmental benefits are described in the Environmental Review Summary.      The is from the InfoShop.Host country location of environmental documents1. The Krenholm head office in Narva (Joala 20).2. The Krenholm head office in Tallinn (Saku 15). 3. The World Bank office in Tallinn (Suur Amerika 1, 13th floor). Date SPI sent to InfoShop October 26, 1999“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:\TEMP\KrenholmSPI.docOctober 26, 1999 10:37 AMEnvironmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).