MIGROS FOODSTORES SKOPJE

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The proposed project consists of construction and start up of a retail complex in Central Skopje. The transition impact of the Project is expected to be good and will derive primarily from: (i) increased efficiency of distribution through introduction of modern retail formats in FYR Macedonia (ii) backward linkages with suppliers as well as regional integration due to the joint operations with the Sponsor's Bulgarian chain (iii) positive demonstration impact as the project is expected to be one of the larger foreign investments in the country in 2004/5. Ramstore Macedonia d.o.o., a majority-owned subsidiary of Ramstore Bulgaria which in turn is owned by Migros Turk A.S. (the "Sponsor"), the largest Turkish retailer with consolidated 2003 revenues of US$ 1.5 billion equivalent and part of the Turkish Koc Group. Up to US$ 8.29 million corporate loan US$ 16.62 million. Environmental Summary - Migros Macedonia 1. Environmental classification and rationale The project has been classified B/0. This project involves the construction and operation of a new shopping complex on a brownfield, inner-city site. This may result in future environmental impacts which have been reviewed through an environmental analysis of the project. 2. Information reviewed during the environmental appraisal The environmental analysis was based on the following information: 3. Environmental issues The principle environmental issues associated with this project include issues which relate to the site of the complex and its suitability for the intended purpose, the impacts created during the construction of the complex (e.g. dust, noise, construction traffic) and the impacts associated with the operation of the complex (e.g. increased traffic flows and solid waste disposal). The site for the complex is a former railway station which was destroyed in the earthquake of 1963. The site has been used as a car park since that time as well as the location for some buildings (a post office, a police station, and clinic) and various kiosks. It is not associated with any contamination from previous use and does not contain any items of archaeological or cultural significance. The buildings on site will be demolished with some, such as the clinic, being re-located to a nearby location to ensure minimum disruption to users. The complex is required to go through a comprehensive planning process including the submission of a full construction plan, covering all phases, to the relevant authorities. In the development of its stores, it is the policy of Migros to follow relevant national and World Bank environmental standards - this applies also to Migros Macedonia. When designing a new store Migros evaluates a range of environmental issues including energy use, hygiene and waste disposal. Wastes, for example, are separated and stored until local collectors licensed by the local authorities come to take the wastes away for recycling / re-use / disposal. Cooling and air conditioning systems currently utilise F22 which is permitted for use until 2010. 4. Environmental opportunities In the design of its stores, Migros incorporates good environmental practice. In terms of energy efficiency, for example, the design and layout of the building is arranged to minimise the energy consumption of the lighting, heating, and air conditioning systems. Foundations, basement, and the structure itself include insulation to minimise heat losses and the entrances of the building include the aero block system, again to minimise heat losses. As another example, when working with local suppliers, Migros requires compliance with minimum standards for quality and hygiene and, if suppliers are not capable of delivering goods at the required standards, works with those suppliers to help them in raising their standards. 5. Summary of Environmental Action Plan  There is no environmental action plan required for this operation. 6 Disclosure of Information and Consultation  Environmental information on the project has been released in accordance with Macedonian law and EBRD's public information procedures for B-category projects. Under Macedonian planning law a detailed construction plan is made available to the public for a period of 15 days in the offices of the local municipality following which a public meeting is organised. After a public discussion, and following any necessary revisions to the construction plans, the project will be approved by the municipality. There have also been a number of press releases and articles on this project published in a variety of daily newspapers. 7. Monitoring and Reporting  Migros will monitor the environmental impact of the project and its operations in accordance with the Environmental Law of Macedonia. Migros will provide an annual environmental and health and safety report to the EBRD as well as notify the EBRD on any changes, incidents and accidents that may have material effect on the environment or safety. None. Mr. Bulent Yildirim, General Manager Mr. Cem Tuncay, Marketing Director Tel: + 359 2 920 05 50 Fax: + 359 2 929 36 71 E-mail: ramstore@ramstore.bg