Russia: Fesco II

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The EBRD is considering providing a senior loan to FESCO as part of the overall restructuring of its corporate balance sheet. The transition impact of the proposed investment is derived through its support and strengthening of the private sector. The Project will have a strong demonstration effect in terms of effective restructuring: the proposed financing will allow the Company to implement a detailed restructuring plan developed in response to the challenging market conditions. Far Eastern Shipping Company OAO. USD 100 million senior loan as part of a corporate balance sheet restructuring plan alongside other lenders. USD 465 million. Categorised B. The proposed balance sheet restructuring facility has been assessed to result in no or limited future adverse environmental or social impacts. The Bank undertook a corporate environmental and social due diligence of FESCO in 2008, prior to the Bank’s equity investment in the Company. Additional environmental and social due diligence has been conducted so as to assess the Company’s corporate policies, procedures, practices and management systems as well as the potential risks and liabilities associated with the Company's assets and operations against the Bank’s environmental and social Performance Requirements (PRs). The due diligence showed that these risks are limited and well managed by the Company. Following its long history and proven track record in the strictly regulated shipping operations and the Company has developed high awareness of environmental, heath and safety issues associated with its operations and is committed to continuous improvement in managing these aspects. The Company has obtained integrated quality, environmental and occupational health and safety management system certifications for its shipping operations. Similar, comprehensive management systems are being developed for the rail and port stevedoring operations. A corporate environmental and social action plan (ESAP) was agreed in 2008 to further develop FESCO's operations and management systems to meet EU standards and good international practice. The Company’s progress with the implementation of the ESAP has been satisfactory. The ESAP is being amended to ensure that the FESCO’s management systems and operations achieve compliance with the full scope of the Bank's PRs. None. Yury Gilts Vice President & CFO Phone office: + 7 495 926 8000 E-mail: Yuriy.Gilts@fesco.com Website: www.fesco.ru