Linstow Varner Retail

completed

More specifically, the Project consists of the following investments: Alfa Retail Park – a US$44.6 million redevelopment of a former semiconductor factory into a big-box shopping mall, mainly for home appliances and home improvements retailers. The site is located 8 km from Riga centre on a heavily trafficked Brivibas street. It will comprise about 60,000 m2 of retail space through refurbishment of existing buildings and construction of new premises.Riga Central Railway Station – this US$50.1 million project consists of three parts: renovation of the existing station, development of a new shopping mall/department store building, and a new retail building on the station square. The potential for a parking garage underneath the Railway Station square is also being considered. In addition to having commercial merits, the project is expected to strengthen the public transport infrastructure in Riga by making the railway a more attractive means of transportation and helping to relieve traffic congestion. It is estimated that around 170,000 people pass through the Riga Railway Station every day.Mols Shopping Mall - a US$27.4 million extension of the first modern car-based shopping center in the Baltics. This regional shopping center will improve its competitive position through an addition of 10,000 m2 retail space as well as expansion of parking facilities.IFC’s involvement in the Project is central to the Company’s ability to raise the financing necessary for its expansion as there is limited availability of long-term commercial bank financing in Latvia today. In addition to its own funds, IFC would provide a syndicated B loan and work with local financial institutions to raise financing for expansion of the Company’s traditional retail mall. Before IFC''s involvement, a major Scandinavian commercial bank failed to raise financing for the Company on a project finance basis.This Project fits well with IFC’s strategy as it would contribute to the modernization and restructuring of the retail sector in Latvia, including a large number of local SME’s. With IFC’s support, the Project will demonstrate that longer-term financing is available in Latvia on a project finance basis for non-export oriented projects and, perhaps more importantly, that transparent FDI can be successful despite a difficult business environment.The Project will have strong direct and indirect development impact. It will act as a catalyst for private sector development by:establishing “Retail Parks” where local and international retailers are brought together in a symbiotic environment, which promote exchange of information and know-how, thereby contributing to the growth and efficiency of the private sector;providing much needed retail floor space, which currently is in short supply in Riga;delivering consumer benefits by providing wider choice of higher quality merchandise and service at lower prices to a broad cross-section of the Latvian population;improving transparency and good corporate governance, which contribute to the reduction of the size of the informal, unreported sector of the Latvian economy (currently estimated to represent 30-40% of the overall economy) and improve tax collection;restoring and rehabilitating landmark buildings in downtown Riga, cleaning up the environment around the buildings, creating additional parking space and resolving traffic congestion and public safety issues; andhiring and training of Latvian nationals, and job creation in the SME sector.