10296 - PriceSmart

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Environmental Review Summary

Project Number

10296

Company Name

Price Ventures, Inc

Date ERS Disclosed

Aug 24, 2000

Country

Latin America and the Caribbean Region

Region

Latin America and the Caribbean

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Nov 28, 2000
Signed : Jan 26, 2001
Invested : May 2, 2001

Sector

Retail (Including Supermarkets, Grocery Stores, etc.)

Industry

other

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

The project will expand PriceSmart’s (PSMT) existing warehouse-stores in Central America and the Caribbean through the constructing and operation of 13 deep discount, no-frills membership-shopping warehouses -- 7 in Central America (Costa Rica 3, El Salvador 2 and Honduras 2) and 6 in the Caribbean (Dominican Republic 3, Trinidad 2 and Barbados 1). The warehouses, ranging in size from 40,000 to 50,000 sq. ft., will be located in urban areas to take advantage of dense populations and relatively higher levels of consumer demand. These warehouse stores sell a variety of food and consumer goods with an emphasis on quality, low prices and efficient operations. The target customers are consumers and small businesses. PSMT’s strategy is to be the high-volume low-cost operation to provide lower prices in the marketplace. Its goal is to be the "low-price leader" for the markets served. This is achieved by offering a limited range of products in a low-cost, no-frills warehouse type environment.

Environmental and Social

The sponsor has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific measures agreed, comply with applicable host country laws and regulations and World Bank/IFC requirements. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow.

1. The project sites will be located in commercial areas and their acquisition will not cause physical or economic displacement. PriceSmart, Inc. owns the sites for the 5 stores in Costa Rica and El Salvador and has completed the construction of 3 of them (1 in Costa Rica and 2 in El Salvador). The company also owns the land for the warehouse in San Pedro Sula-Honduras and has gained access to a property in Tegucigalpa-Honduras, through a long-term lease agreement. One of the stores in Honduras is under construction and the other has been completed. Construction of the store in Trinidad has not started, but PriceSmart Trinidad &Tobago, Ltd. (a joint-venture company) owns the land required. The site for the store in Barbados has not been purchased yet, but will be located in a commercial area. The sponsor is committed to undertake and provide IFC with details of a future land acquisitions and to comply with World Bank policies and guidelines. Although not anticipated, any land acquisition requiring resettlement will be subject to the preparation of a Resettlement Action Plan to be approved by IFC prior to acquisition of the land.

2. None of the project sites are near sensitive habitats nor include areas with previous contamination

3. PriceSmart discharges effluent into the public sewer system, when this service is available and when it has been confirmed that the public system adequately treats and controls outfall. If no public system exists or if it performs inadequately, PriceSmart will design, construct and operate a wastewater treatment plant. Public or private waste carriers will collect the company''s solid waste.

4. Potable water will be supplied by public sources to the operations in Costa Rica, El Salvador, Trinidad & Tobago and Tegucigalpa-Honduras. In the case of the site located in San Pedro de Sula-Honduras, water will be obtained from a private water well.

5. Electrical power for all PriceSmart locations will be supplied by public utilities. Diesel powered backup generators are utilized for all Price Smart facilities and fuel storage tanks have secondary containment in most of them.

6. PriceSmart''s utilizes refrigerant type AZ-50 (HFC) for product refrigeration and refrigerant type R-134a (HCFC) for air conditioning applications.

7. The company does not utilize any asbestos containing material in the construction of facilities.

8. PriceSmart will provide occupational health and safety training programs, including handling and storage of food, general precautions during the handling and cutting of meat, and the use of safety belts for carrying heavy objects.

9. The stores are designed to high US standards, but where local building codes require, are upgraded to withstand hurricane force or earthquake movements. They are sprinkled with adequate fire escapes, which in any event should not be a major issue in a modern rectangular, one level building. Hose cabinets are provided with a 6000 gallon water back-up and fire pump to generate 30 ft hose stream.

10. PriceSmart will submit to IFC an annual environmental monitoring report to ensure ongoing compliance during the life of the project. PriceSmart''s monitoring reports will be based on the results obtained from their monitoring programs including at a minimum the following components:

Ø project status, including key developments or deviations from the original design;
Ø compliance status with the local authorities;
Ø treated liquid effluents, including effluent analysis;
Ø employee training programs.

Conclusion & Monitoring

IFC will evaluate the project''s compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering: (i) ongoing performance of project-specific environmental, health and safety and social activities as reflected in the results of periodic and quantitative sampling and measuring programs. Periodic site supervision visits will also be conducted.

This Environmental Review Summary (ERS) is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Any documentation that is attached to this ERS has been prepared by the project sponsor or in conjunction with the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. The following ERS is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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