23495 - Scancom Limited

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Environmental Review Summary

Project Number

23495

Company Name

SCANCOM LIMITED

Date ERS Disclosed

Jan 3, 2005

Country

Ghana

Region

Africa

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Apr 6, 2005
Signed : May 27, 2005
Invested : Oct 20, 2005

Sector

Mobile Telephony

Industry

other

Department

TMT, Venture Capital & Funds

Project Description

Scancom Limited (Scancom or the company) is the leading provider of GSM mobile telecommunication services in Ghana, with just under one million subscribers or a 65% market share expected end of 2004. The company launched its operations in 1996. As of December 2, 2004, Scancom is a fully licensed operator (Scancom, like all the other operators in the country, was only authorized operator until then) for a duration of 15 years. The company has also been granted a license to operate its own international gateway.Scancom currently offers coverage in all major cities in Ghana. In addition to its GSM mobile phone services, Scancom has developed alternative wireless GSM products, including community-shared GSM handsets offering substitution for fixed line access. Scancom is also in the process of introducing a broad range of value added services. The project supports the expansion of Scancom’s network in capacity and coverage to sustain the subscriber base growth over the next three years (subscriber numbers are expected to more than double by end of 2007). The project also supports Scancom’s improvement of its operating status through the funding of the company’s new operating license. The project will allow also the optimization of Scancom’s capital structure by increasing its leverage (the company currently has no long-term debt, the only long term liability it has is the one for the repayment of license fee). The project is expected to cost approximately $160 million throughout 2005-2007. Scancom is seeking total external financing of $50 million.

Environmental and Social

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

- Land Acquisition and site selection:

Scancom''s expansion plans are to add approximately 884 new radio base stations into the network and approximately 500 new microwave links during the period 2005-2007. The proposed locations of these stations and links will be a mix of urban, sub-urban and rural sites. Scancom primarily leases space for its antennae and base stations from land owners through a willing lessor/willing lessee relationship. It typically places its equipment on roof tops or existing structures to minimize cost, and most sites will be located within towns or cities. Thus, changes in on-the-ground land use are likely to be minimal. Almost none of the Scancom sites will require building of access roads. For any site that does require building of such a road, the land needed is identified in consultation with the local land department and local traditional chiefs, and compensation is agreed with the land owner(s) and an agreement entered. As the needed roadway would be sub-urban or rural, it would be a muddy road with drains on both sides for rain water, and would be designed by a qualified road engineer and constructed by qualified registered contractors.

- Impacts on sensitive areas:

Scancom has given assurances that
- new installations will minimize impacts on sensitive areas, such as national parks, forests, wetlands, or cultural sites, and
- existing installations will be used where feasible.

In identifying new sites, Scancom assesses potential impacts on the local neighborhood and minimizes them. The neighborhood is informed about the project through local meetings, and Scancom seeks prior verbal approval of these neighbors as well as approval from the local environmental protection agency.

- Air emissions and noise abatement:

Existing base station and tower sites have generators and batteries to protect strategic equipment from power loss, as will new sites. The generators are housed in their own noise-insulated structures and only operate in case of power failure. All of the generators are small in capacity and are considered under World Bank Group guidelines to have minimal impact on air emissions. Scancom will follow World Bank Group ambient noise guidelines. For example, ambient noise outside the generator room must be below 45 decibels in residential areas during the night. Scancom will follow a routine preventative maintenance schedule that ensures the generators operate according to manufacturers'' specifications and, thus, minimizes the air emissions and ambient noise.

Hazardous materials, waste, and disposal:

All solid and liquid waste management is carried out under maintenance and operations procedures that specify

- containers for handling, transportation and disposal, and
- monitoring of actual practice to improve performance.

Contractors are required to follow these procedures as well. Solid and liquid waste generated as part of the network installation and operations is limited and will be disposed of in accordance with local regulations. The equipment for the project does not use polychlorinated bi-phenols (PCBs) or chlorofluorocarbons (CFCs). Scancom will not install equipment that uses either of these substances. All fuel storage will have secondary containment. The batteries are acid-free and thus present a low risk for environmental damage. Additionally, Scancom uses special racks for their transportation and uses clear procedures for their handling to avoid accidents. A recycling program for batteries is in place.

- Life and fire safety:

To ensure adequate fire protection, all sites will have fire extinguishers for suppressing electrical or diesel fires, as appropriate, placed outside fire-risk areas against highly visible backgrounds. Scancom has a regular equipment inspection program in place that includes the testing of fire safety equipment, and Scancom conducts regular fire drills.

- Environmental/social management system and worker health/safety:

Investcom, the parent company of Scancom, is in the process of developing an Environmental and Social Management Policy and Procedures Plan (ESMP) at the corporate level. Scancom will be following the same approach to worker health and safety and environmental management as Investcom. With respect to worker health and safety, this approach will include a continuous assessment of occupational risks and improvement in internal procedures and processes; a Safety Management System; and a company-wide definition of responsibilities and training programs to implement the safety management system. With respect to environmental management, the approach will focus on minimizing electromagnetic emissions, visual impact, and management of the solid waste stream. The ESMP will be a vehicle for transferring the best practices of Investcom to Scancom, and is expected to be implemented by mid-2005.

- Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC environmental and social policies and the environmental, health and safety guidelines.

- 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 the ongoing performance of project-specific environmental, social, health, and safety activities as reflected in the results of periodic and quantitative sampling and measuring programs; and
- Conducting periodic site supervision visits as needed.

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:

- the status of implementation of any measures contained in the Environmental and Social Action Plan and
- 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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