IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors. The Summary of Project Information (SPI) also provides details of where the ERS has been made available to the locally affected community. The SPI must be sent to World Bank InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental/social information submitted by the project sponsor. The following potential environment, health and safety and social impacts of the projects were analyzed. - Sites selection and sites environmental and social conditions (including land rights and use); - Power and water supply; - Air and water emissions; - Solid wastes and hazardous materials; - Sale of materials on the IFC exclusion list; - Fire protection and life safety; - Emergency response.

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 Ukrainian 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. - Sites selection and sites environmental and social conditions (including land rights and use). The new stores will be located in Ukraine’s major cities. All sites are close to residential areas and major roads in the respective cities. The company has acquired land lease rights through willing seller/willing buyer purchases or on the basis of a long-term contract with municipal governments. Under Ukrainian legislation the procedure of land designation includes a study on its current environmental, social, architectural and geological conditions. All land plots were designated for the construction of retail outlets in full compliance with the local requirements. Ukrainian legislation also requires that all new developments should carry out an environmental impact assessment (EIA) study and evaluate if the project has any potential negative impacts on environmental and social conditions at the site. If such impacts are identified, the company should develop and implement the corrective actions to avoid, minimize, mitigate or compensate the adverse impacts. The obtaining of positive opinion of State Environmental Review authorities is the obligatory condition to commence the construction. The necessary EIA studies are under preparation, and IFC will require evidence of compliance with these regulations following the review of design documentation by the relevant environmental authorities. - Power and water supply At all sites the local utility company will provide heat and potable water, which will also be used for fire fighting. The electricity will be drawn from the grid. - Air emissions and effluent discharges. Air emissions are limited to those arising from the transport fleet. Through EIA studies the company will identify the optimal transport routes to avoid or minimize the potential impacts (air emissions and noise) on the residential areas. At all sites sanitary sewage will be discharged to the municipal sewage system with the permission from the authorities. Stormwater run off will also go to the sewer separately. The surface run-off will be treated (suspended solids and oil traps, if needed) prior discharging to city sewage and the municipal wastewater treatment system for final treatment. - Solid waste and hazardous materials management Most of the waste generated by the stores will be packaging material and will be collected separately for further recycling. Small quantities of hazardous wastes, such as used fluorescent lamps, or accidentally generated hazardous materials, such as damaged paint or solvent containers, will be collected separately, packed into a (leakage) protection wrapping and removed by specialized licensed companies. Any solid wastes that are not recycled will be collected by municipal authorities and disposed of in a licensed landfill. Currently the company is not selling pesticides or herbicides in the garden sections of its stores. If the market situation motivates the company to start selling pesticides, it will adhere to IFC’s Operational Policy 4.09 and will not sell pesticides falling in the World Health Organization’s Classes 1A, 1B, and 2. - Life and fire safety The company designs and builds its retail outlets to conform to Ukrainian fire safety standards, which are compatible with international standards. The existing stores are equipped with fire and smoke detectors, fire alarm systems, sprinkler systems, appropriate fire exits (1 per 300 m2), and adequate numbers of fire extinguishers and hydrants (1 per 100 m2). The company has developed an emergency response plan and implemented management systems to ensure that safety measures are maintained according to manufacturer’s specification, local regulation and IFC requirements and that employees know how to respond in an emergency. Nova Liniya instructs its employees on safety, fire prevention, sanitary norms, and electrosecurity. They are examined on these areas prior to starting employment and monthly thereafter. The company will introduce the same life and fire safety practice throughout its operations. IFC environmental specialist

This ERS contains the full environmental and social documentation prepared for the project.

Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines upon successful implementation of the agreed mitigation measures.

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 ongoing performance of project-specific environmental, health and safety activities as reflected in the results of periodic and quantitative sampling and measuring programs. Periodic site supervision visits will also be conducted.