MOSCOW - EFES

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EBRD originally financed the construction of a "greenfield" brewery in Moscow with a capacity of 1.25 million hectolitres. Subsequently, the Bank provided financing for the expansion of the Moscow brewery and the acquisition of the Amstar brewery in Ufa, Central Russia. In addition the EBRD also invested USD 5.86 m into the ordinary equity of MEB, which was subscribed in 2001 and 2003, and which currently represents a shareholding of 8.76%. The EBRD is now considering providing financing of up to USD 17.6 m. Thanks to continuous investments in the Russian beer sector, EBRD’s financing of MEB is expected to increase competition in the brewing sector, expand the product availability across the country, modernise outdated production equipment, and set standards for corporate governance and business conduct. EBI, a subsidiary of the Turkish Efes Beverages Group, is one of the leading breweries in Eurasia and the CIS with significant market shares in Russia, Moldova, Kazakhstan, Serbia and recently Georgia. MEB is the Russian operation of EBI (c. ¾ of sales). Thanks to its 2006 acquisition of Krasny Vostok Brewing Group, the seventh largest brewing company in Russia, EBI now runs two breweries in Kazan and Novosibirsk, as well as three malteries in Kazan. EBI’s brewing capacity in Russia today is c. 20 mhl per annum (9% market share). Original financing - seven-year loan of US$ 34 million (ECU 30 million) and equity investment of US$ 8 million (ECU 7 million). New financing USD 17.6 m Original project cost: USD 109 m. New project cost USD 17.6 m This operation has been screened B/0, requiring an environmental analysis of the proposed development, including the review of the sponsor's environmental policy and procedures, which would be applied in further stages of the operation. The environmental analysis and an audit of an existing non-operational site were carried out by independent consultants. The consultants' report did not identify any significant environmental risks or liabilities in relation to the existing site or the proposed development which would require major corrective actions. However, the audit reported that the proposed site was formerly used as a non-hazardous waste landfill site and as such, it has the potential to have an adverse impact on both surface water and groundwater. As a condition of the loan agreement, a baseline soil and groundwater study will be undertaken along with a baseline soil gas survey to confirm the level of any potential contamination and the need for corrective actions. The company will assume the responsibility for any corrective action. The site also has some other minor environmental management issues associated with it. These have been set out in an Environmental Action Plan (EAP) and will be addressed within the new project development. The sponsor's procedures regarding design and operational practices have been found fully satisfactory and in line with EU and best international standards and practices. New plant and equipment as well as all construction activities, water supply and waste-water treatment will meet national and EU standards. All water used will conform with the World Health Organisation and all local standards for drinking water. The company will report annually to the Bank on environmental, health and safety matters, including compliance status and progress made on the implementation of environmental protection measures, and will notify the Bank in cases of significant environmental accidents or incidents. None. Burhan Tanik Fax: +7 (495) 797-98-27