While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards: PS1: Social and Environmental Assessment and Management Systems PS2: Labor and Working Conditions PS3: Pollution Prevention and Abatement PS4: Community Health, Safety and Security The site was initially vegetated with the Gmelina Aborea species (Beechwood tree). Although not indigenous to Malawi, many areas in Lilongwe have been planted with the species for harvesting as firewood. In 2000 the trees were cleared and maize was cultivated on the land by one adjacent private residence. In 2008 the Government declared that the land should remain fallow to accommodate the planned shopping centre. The residence has since commenced cultivating maize on vacant Government owned land adjacent to the site. On the site’s north-western boundary, local community members also undertook small scale sand winning operations. In 2008 these activities relocated to an adjacent area. Thus PS 5: Land Acquisition and Involuntary Resettlement does not apply to the project and this equally applies to PS 6: Biodiversity Conservation and Natural Resource Management. There are no Indigenous Peoples in the area and, given the site’s historical use, PS: 8 Cultural Heritage is also not applicable.

This is a Category B project according to IFC’s Environmental and Social Review Procedure because of the limited number of specific impacts that may occur are site specific, and those impacts can be avoided or mitigated by adhering to generally recognized performance standards, procedures, guidelines or design criteria. The shopping centre will be located on a vacant portion of land in an area that is largely undeveloped. The project Sponsors are both prominent organizations in Malawi and have engaged reputable companies in the design and construction of the centre. All the design parameters are based on recognized South African standards, and the relevant local and national government departments have been engaged on the project. The local municipality will provide the requisite services for the project, and the road network in the vicinity of the centre will be upgraded to accommodate the development. Specific actions have been defined in the project Environmental and Social Action Plan (ESAP) to enhance environmental and social performance, and the project Sponsor’s have the capacity to ensure compliance.

The company has presented plans to address the potential environmental and social impacts to ensure that the project will, upon implementation of the specific agreed mitigation measures, comply with policies and standards internal to MPICO, applicable national laws and regulations, IFC’s Performance Standards on Social and Environmental Sustainability and IFC’s applicable Environmental, Health and Safety (EHS) Guidelines. The information about how these potential impacts will be addressed by the project is summarized in the paragraphs that follow, and in the ESAP which is disclosed with this document. PS1: Social and Environmental Assessment and Management Systems In terms of the national Environmental Management Act (1996), an EIA is required for the project. MPICO commissioned a Malawian environmental consultancy to undertake the EIA. In March 2010, the Draft EIA was made available to stakeholders for comment. Subsequently, in April 2010 the Draft Final EIA Report was submitted to the National Council for Environment for a decision on whether to approve the project. This decision is considered imminent. Assuming a favorable outcome, the Final EIA Report, which includes the conditions of approval and the manner in which these will be addressed, is to be made available to stakeholders. In 2009 the Lilongwe City Planning Committee, which includes representatives from various City departments, approved the center’s conceptual design. Final planning approval is expected by end April 2010. The project is being managed by the TCI Group (TCI), a South African company specializing in developing and managing capital projects. The centre has been designed by Stauch Vorster, a reputable South African architectural company. The South African National Standards (SANS) have been applied to all aspects of the design, including that related to architecture, structural and civil works, and life, fire and safety. The final designs have been submitted to the Lilongwe City Council for approval. Construction is expected to commence in May 2010 once MPICO receives all the necessary approvals. The managing contractor for the construction phase is Stefanuti Stocks, a large construction company based in South Africa. Stefanutti Stocks has accreditation for ISO 9001: 2008, a quality management system that will be applied to the project. The company also has a NOSA 5 Star rating and their occupational health and safety system will also apply in the construction phase. This requires that a full-time Safety Manager be appointed to the project. The EIA included a conceptual Environmental Management Plan (EMP) for the construction phase which identified key issues requiring mitigation. As per the ESAP, a detailed EMP will be compiled for the construction phase. The EMP will include a procedure for engagement with the community which incorporates a mechanism for receiving, addressing and resolving community grievances and complaints. Further, the EMP will be audited on an ongoing basis by an independent environmental consultant to ensure compliance. MPICO are to appoint TCI to manage the shopping centre. Although the company has experience in managing similar developments, they are not currently operational in Malawi. Thus TCI are still to define the management structure for the centre and who will be responsible for environmental and social issues, including occupational health and safety. As defined in the ESAP, MPICO are required to define responsibilities for the management of these issues prior to the centre being operational. Further, the company will appoint a person responsible for ensuring compliance with the project ESAP, including any conditions of approval from the Department of Environmental Affairs. PS2: Labor and Working Conditions During construction, a maximum of 500 individuals will be employed at any one time. Stefanutti Stocks will employ local skilled and unskilled persons where available. On-site occupational health and safety will be managed via application of the Stefanutti Stocks systems and procedures and will apply to all personnel. Stefanutti Stocks’s application of their occupational health and safety system will be independently audited to confirm implementation. Stefanutti Stocks’s are also required to confirm their Human Resources documentation complies with this Performance Standard prior to IFC’s investment. In addition, as the managing contractor, the company needs to ensure that all subcontractors comply with national labor legislation. These requirements are defined in the ESAP. The number of employees during the operational phase is still to be confirmed. While TCI will manage the centre, personnel directly employed by the company will be limited primarily to management functions. Activities such as cleaning, security and garden maintenance will be subcontracted. TCI previously managed a commercial development in Malawi which required development and implementation of a Human Resources Policy and related procedures. In addition, the company currently manages several commercial developments in South Africa which require the management of human resources in accordance with South African labor legislation; this is consistent with the requirements of this Performance Standard. Prior to commencement of operations, the company is required to provide IFC with documentation confirming that TCI’s Human Resource Policy and procedures comply with this Performance Standard. In addition, any subcontractors directly engaged by TCI for the provision of ongoing services at the centre will be required to demonstrate compliance with IFC’s requirements. PS3: Pollution Prevention and Abatement Potential pollution issues during the construction phase include the discharge of contaminated (high silt loads / oil and grease) stormwater and hydrocarbon spills. Whilst the management of soil erosion during the initial site clearance will be important, one of the reasons for commencing the project in May is that this is the start of the dry period in the Malawi. In addition, there is the potential for nuisance impacts (e.g., noise and dust) on adjacent communities. These issues will be managed via implementation of the EMP and the ESAP emphasizes the management of the key issues. Once full occupied, the centre will use 72 m3 of water per day which will be provided by the local municipality. As stipulated in the ESAP, a potable water quality monitoring program will be implemented to ensure the water is of an acceptable quality. Solid waste will be collected in on-site containers and disposed of at the Lilongwe municipal waste disposal site. All the retail operations that process or produce food e.g., the individual food outlets, will have grease traps installed on their waste water outlets. This waste water, along with that generated by the ablution facilities and cleaning is expected to result in 69 m3 of sewerage per day. The sewerage will be discharged into the Lilongwe municipal sewerage treatment works. This facility has sufficient capacity to accommodate the centre’s sewerage and complies with the national standards for waste water discharge. IFC is currently assessing various opportunities to improve energy efficiency at the centre in conjunction with TCI. These include the installation of reflective sheeting on the roof to reflect solar radiation, insulation in the roof to reduce heat gains in the centre and low energy lighting, amongst others. Electricity will be provided by the local municipality with the total annual consumption is estimated to be 8,4 million kWh. Typically there is load shedding for three hours every day in Lilongwe. Thus three standby generators will be installed, each of which will have a dedicated 5000 liter above ground bunded diesel storage tank. The combined electricity usage and fuel usage equates to 16,500 tons of CO2 per annum during the centre’s operational phase. Stormwater will be collected in on-site drains and discharged to a stormwater retention pond located on the site’s north-western boundary. To control stormwater contamination, oil/water separators will be installed at the primary discharge points from the parking areas. The stormwater retention pond has been designed to attenuate a 1:50 year flood event. Water from the pond will then flow via stormwater pipes into the natural drainage line located north-west of the site. On occasion the property and gardens will be fumigated for pests. As defined in the ESAP, MPICO are required to compile and implement a pesticide management plan that is consistent with the IFC’s General EHS Guidelines. PS4: Community Health, Safety and Security Kaunda Road constitutes the site’s western boundary and intersects with the main road between Lilongwe and Zambia approximately 300m to the south. Immediately north of Kaunda Road are light industrial and commercial properties. A small electrical substation is located on the site’s south-western boundary, with the remaining land to the south being vacant. To the east there is one residential property located approximately 100m from the site boundary, with the remaining land in this direction being vacant. To the north the ABC Clinic and African Bible College are located. The distance between the boundary of these two facilities and the site varies between 40-80m. Given the proximity of clinic, college and residential property, the management of noise and dust during the construction phase is important. Equally, noise could affect these properties during the operational phase, although the Government is in the process of acquiring the residential property to accommodate future development. The management of dust and noise during the construction phase will be addressed via the EMP. This will include a community engagement procedure to resolve community grievances and complaints. In addition and as defined in the project ESAP, ambient noise monitoring will be undertaken to ensure compliance with IFC’s General EHS Guidelines during the construction and operational phases. This monitoring will focus on the residential property, clinic and college. Where impacts are identified, mitigation measures will be identified and implemented by MPICO. Kaunda Road is to be upgraded by the Municipality to accommodate access to and from the centre. This includes increasing the road width at the intersection with the centre’s access point, and constructing a traffic circle at this position. In addition, a pedestrian route will be constructed parallel with Kaunda Road to the intersection of the link road between Lilongwe and Zambia to the south. The shopping centre has been designed taking into account potential wind loads and seismic events. In addition, relevant South African life, fire and safety standards have been applied to the design and submitted to the Lilongwe Fire Department for approval. As defined in the ESAP, MPICO need to compile a Master Plan (engineering design) for the centre confirming compliance with IFC’s General EHS Guidelines for life, fire and safety, including the applicable South African standards. Thereafter and following construction, MPICO will undertake a post construction audit to confirm that the centre has been constructed in accordance with the Master Plan. Given the influx of workers to the area, some of whom will not be permanent residents of Lilongwe, there is the potential for an increase in the transmission of HIV/AIDS. The Malawian Government recently updated the national strategic framework to address the impact of HIV/AIDS. One of the specific goals is to limit the HIV/AIDS infection rate in Malawi. In accordance with this goal and the related objectives, the project EMP will define specific actions to be implemented by the construction companies to limit the potential impact of HIV/AIDS. While the number of security personnel is to be defined, they will be unarmed and may call on the local police service if required.

Consultation with stakeholders has been undertaken during the EIA process, and stakeholders will also have opportunity to review the Final EIA report. As required under the Environmental Management Act, the decision on the EIA will also need to be advertised in the local print media. A community engagement procedure will also be defined in the project EMP and communicated to key stakeholders.

The ESRS, companion ESAP and the Draft Final EIA for this project are available directly from MPICO and the national Department of Environment, details below. In addition, once the detailed project EMP has been compiled, this will be made available to the municipality, the occupants of adjacent properties and will be disclosed to IFC’s website with this ESRS. MPICO Mr. Gray Nthinda Managing Director Old Mutual House Area 19, Robert Mugabe Crescent City Centre Lilongwe Tel: +265 (0) 1770622 Fax: + 265 (0) 1772270 Email: gnthinda@mpicomw.com Department of Environmental Affairs Ms Tawonga Mbale Assistant Director Lingadzi House Area 19, Robert Mugabe Crescent City Centre Lilongwe Tel: +265 (0) 1771 111 Fax: + 265 (0) 1773 379 Email: tawongam@yahoo.com