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 a site visit, appraising technical and environmental /social information submitted by the project sponsor, and discussions with the project sponsor and retailers already operating from the complex. The following potential environment, health and safety and social impacts of the projects were analyzed. Land acquisition and project planning; Disruption caused to tenants during construction; Life and fire safety; Effluent discharge and treatment; Emissions to air; Solid waste management; and Safety during construction.

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 project planning. The land upon which the project will be developed, including the old cinema complex has been leased by the project sponsors for ten years. The buildings on the site were acquired by the sponsors through a privatization process in 2004. Project development plans are subject to expert review by the Armenian authorities, and following this review permission for development is expected. Plans have been developed, and review is ongoing for the first stages of this phased project. Plans for subsequent project stages will be subject to equivalent review at the appropriate time. Disruption caused to tenants during construction. The project site has around 1000 existing retail tenants: of these approximately 820 operate one or more small stalls, typically selling footwear, clothing or consumer goods within the old cinema building, and 180 operate kiosks or open air market stalls selling food and beverages in the area immediately south of the subway station which will be redeveloped to form the supermarket. Retention of these tenants in the new retail center is integral to the mall’s business and the sponsor has therefore planned the phased development in such a way as to minimize disruption to these small retail businesses. It is expected that on completion there will be some 1,500 tenants occupying a much larger retail area than today. The first stage of the development is the ground floor of Block B. When complete, this will accommodate retailers from the first floor of Block A, thereby freeing further space for development. This progressive redevelopment and moving will continue. While Block A has the largest plan area, much of this is comprised of two tiered cinema halls which are not currently used except for small scale storage. Around 180 kiosks will be displaced by the construction of the supermarket, which will be the second phase of the project. These kiosks will be accommodated on the roof of Block B, and beneath the seating wings of the cinema on a temporary basis, these areas exceeding the area to be redeveloped, before permanent relocation within building B1. These tenants will pay reduced rent during this transition period. It is expected that individual retail kiosks will be larger in the new mall than those used presently, though it is not expected that rents per unit area will change, simply as a result of the development. The larger unit sizes will meet the requirements of the many tenants who currently occupy several kiosks. Tenants spoken to, operating open air stalls, outside kiosks and stalls within Block A welcomed the proposed development, expecting that it would provide a better working and retail environment, and would be less dusty than the existing building. Life and fire safety. Presently, large numbers of retail stalls operate from Building Block A which can be accessed from Block B. This retail area has the potential to be very crowded and extends over more than one level, yet the building does not have illuminated exits signs or emergency lighting. Exit routes are not clear, nor is it clear that the number, spacing and size of exits meets internationally recognized standards. Building B will be completed by December 2007, at which time Block A will be vacated and redeveloped. The project company will implement short-term fire safety improvements, which will include but not be limited to addition of emergency lighting and exit signs and improved building egress by providing emergency exits in the location of the old cinema exits. In the longer term, Block A will be replaced or redeveloped, with life and fire safety precautions as described below. Designs for the new and refurbished buildings must comply with Armenian seismic codes: designs are checked by Armenian authorities before construction permits are issued. After completion of each building phase, an independent expert will confirm that the building has been built to code or alternatively may recommend revisions such that this code is met. The proposed designs for the new buildings have been developed to be fully compliant with Armenian life and fire safety requirements. Buildings will be fitted with fire suppression sprinkler systems. Individual shops will be equipped with fire alarms and smoke detectors which will also be fitted to common areas of the malls. There will be a centralized alarm system, and dedicated smoke extraction systems. Building drawings will be reviewed by an international fire safety consultant acceptable to IFC who will confirm compliance with internationally-recognized fire safety requirements or alternatively recommend revisions such that the designs will meet such requirements. The consultant shall prepare a life and fire safety Master Plan, incorporating recommendations arising from this review, and on other aspects of fire safety, including but not limited to those listed in IFC’s Life and Fire Safety Guideline, which shall be observed during building construction and operation such that the mall will meet Armenian and IFC life and fire safety requirements. Following completion of each stage of the mall, the consultant shall visit the site to confirm that the construction and operation followed the requirements of the Life and Fire Safety Master Plan. A formal emergency response plan covering the existing and future mall operations shall be developed and implemented. Retail stores within the new mall will be fully equipped spaces, fitted with dedicated electricity meters and lights and simply requiring decoration by retail tenants. The company’s security staff will make regular checks on their clients’ operations to ensure, for example, that there have been no unauthorized additions overloading electrical circuits. Effluent discharge and treatment. Liquid effluents generated by the project will be limited, and will arise from wash rooms and possibly limited catering facilities. All liquid effluents will be directed to the city sewer from where they are sent to a municipal treatment facility to be adequately treated. Emissions to air. The mall will have space heating sourced from four large natural-gas fired water boilers. These have not yet been ordered but will be specified to meet IFC’s NOx emissions requirements. High levels of particulate or sulphur oxide emissions are unlikely with natural gas fuel. Air conditioning will be based upon five water chillers of varying capacities. These will not use ozone-depleting refrigerants. Solid Waste Management. Solid wastes arising from mall operations shall be managed on behalf of the tenants by the mall management company. Card, paper and plastic packaging wastes will be collected, compacted and sent off site for recycling by other companies owned by the project sponsors. Remaining solid wastes will be collected twice daily and removed by city waste removal services. Safety during construction. Construction work, considered to be renovation rather than new construction is underway on the ground floor of Building B. Certain safety shortcomings were identified including lack of personal protective equipment such as helmets and safety glasses for building site workers or visitors, an insecurely fixed staircase, and poor quality scaffolding. As work progresses, new issues such as the need for safe working at height and safe use of cranes will arise. Tenders have not yet been invited for future construction work. The Company will develop management tools to manage safety in construction and will require future project tenderers to submit with their bids method statements describing how they intend to ensure a safe construction site and will ensure that these requirements, and others if necessary are met. Review of proposed methods to promote safety during construction will be part of the tender evaluation.

The following supporting documents provide further details of environmental and/or social issues: Figure 1, a schematic of the proposed development. Environmental Action Plan.

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: (i) the status of implementation of any measures contained in the Environmental Action Plan and (ii) 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.