Ramstore

completed

Summary Of Project Information (SPI)Project NameRUSSIA - RamstoreRegionEurope IISectorProject No008447Projected Board DateMarch 6, 1998Company NameRamenka OOOTechnical Partner and/or Major Shareholders The Project will be sponsored by three Turkish entities, ENKA Insaat ve Sanayi A.S., a major international contractor, MIGROS Turk T.A.S., the leading supermarket chain in Turkey, and RAM Dis Ticaret A.S., a foreign trade company. The two later Sponsors are both members of the Koc Group of companies, the oldest and largest privately owned conglomerate in Turkey. The Sponsors together bring a unique combination of useful expertise to the implementation of the Project, including experience with construction and property leasing in Moscow, western retailing knowledge and practice with imports of product into Russia.Project Cost Including Proposed IFC Investment US$140 million, including an IFC “A” loan of US$35 million and a “B” loan of up to US$50 million to be syndicated to commercial banks on a best efforts basis.Location of Project and Description of Site The stores will be located in middle and upper income areas in Moscow’s mid to outer suburbs. These areas typify the suburban dormitory high rise developments common during the communist period, presenting high density populations within a natural catchment area for a retail store. The four new hypermarkets are being constructed on previously undeveloped land. The hypermarkets are situated on major roads and at major intersections and are serviced by public transportation. Each has adequate space for a substantial parking lot.Description of Company and Purpose of Project The construction and operation of four greenfield hypermarkets with integrated mini-malls in suburban Moscow under the name “Ramstore.” IFC’s role in the Project will be to assist the Sponsors in establishing a viable private sector business which will take advantage of an extremely underdeveloped retail market in Moscow by opening western style supermarkets in suburban areas where there are a limited number of retail outlets and a concentration of housing developments. The Corporation is also needed to mobilize the required limited recourse finance and provide the Sponsors with added comfort in relation to political risk. From a developmental standpoint, the Project will make available lower cost, high quality food and non-food items to the domestic market on a consistent basis. It will also introduce state-of-the-art inventory management, marketing and sales techniques which will serve to improve the overall retail sector in Moscow as it will be a model for former state-owned enterprises and others to follow.Environmental Category and Issues This is a category “B” project according to IFC’s environmental review procedure. Environmental, occupational health and safety issues associated with the Project include site selection and site history, liquid and solid waste disposal, use of CFC’s, fire protection and emergency response, and general worker health and safety. The shopping malls will be erected only after all construction permits are obtained. To obtain these permits a comprehensive study on “preservation of natural environment” has to be carried out for each store. IFC has reviewed such a study for the first store and found it to be acceptable and in compliance with World Bank policies and guidelines.The is February 9, 1998 from the Public Information Center.Date SPI sent to InfoShop February 6, 1998“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) 974-4384Environmental 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).