While all Performance Standards are applicable to this investment, IFCs 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. If IFC's investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards.

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
PS 8 – Cultural Heritage

The key environmental social issues associated with the Project include: environmental and social assessment and management system of the Company for the Project; labor and working conditions management during construction and operation; resource efficiency of the Project (including, energy, water, and other resources); pollution prevention and waste management; life and fire safety of the Project property during operations; seismic consideration for the design and construction of the project; and the way to preserve the main façade of the existing historical building. The Project does not involve any involuntary resettlement. All the property owners (13 owners) of the existing building signed contracts to transfer the property to Prodeco. The potential adverse environmental and social risks and impacts are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures. It is therefore concluded that this is an Environmental and Social Category B project according to IFC’s Policy on Environmental and Social Sustainability.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Environmental and Social Assessment and Management System:



Prodeco’s “Environmental and Social Risk Management Policy” defines the E&S objectives and principles and responsibility of the Company Director who is appointed as the Environmental (Ecological) and Social Coordinator for Prodeco. The Director is responsible for the successful implementation of the Policy and Prodeco’s environmental and social management system, and for reporting to the Ameria Group on progress at its request. The Policy clearly states that “The Company is committed to complying with local, national, international environmental and social regulations and world best practice applicable to its operations and business services.” This is in line with Ameria Group’s policy to apply best international practice.



Prodeco assessed the Project’s potential E&S issues such as ground water and soil contamination of the Project site, possible asbestos use at the existing building, minimum distance required to the nearby high rise office building, and the preservation of the façade of the existing historical building. No major contamination in ground water or soil, and no use of asbestos were found. The design of the new building was selected through the international architecture design concept competition taking into consideration of how best to preserve the façade of the historical building and in harmony with the nearby office buildings. The number of storey of the Project (nine storey building) was selected due to visual harmonization consideration.



The development of the Project needs to follow several local procedural requirements including architectural design approval, review of compliance with seismic norms of Armenia, demolition permit, excavation permit, and construction permit. Relevant supporting design and assessment needed by these procedures will be conducted by the contractor under the supervision of Prodeco.



Management Programs:



The Project will involve demolition of an existing old building, while preserving the main historical façade of the building, and construction of the new building using the preserved façade. A competent contractor is being mobilized by Prodeco for the detailed design and construction of the Project. The contractor’s “Quality, Health, Safety & Environment Procedure” suggests that adequate mitigation and performance improvement measures and actions will be implemented for the Project.



Organizational Capacity and Competency:

Ameria Group has a dedicated Environmental, Social, Health and Safety (ESHS) Officer. This ESHS Officer and the Director of Prodeco are taking the lead in the responsibility for environmental licensing and for monitoring ESHS matters of Prodeco’s projects, including construction, operation and maintenance contracts. The contractor being mobilized to conduct detailed design of the building and the construction of the new building has track records of developing similar office building p
rojects to international standards in Armenia.



Emergency Preparedness and Response:

Through the contractor’s “Quality, Health, Safety & Environment Procedure”, an emergency preparedness and response plan will be prepared by the contractor for the construction phase. For the operational phase, Prodeco will prepare and implement a detailed emergency preparedness and response plan for Life & Fire Safety aspects and the earthquake situations.



Monitoring and Review:

During the construction phase, the contractor will monitor the implementation status of the required EHS mitigation measures, occupational accidents and corrective actions, and the overall safety programs of the Project. They will report the ESHS related performance status to Prodeco which will supervise the contractor’s performance. During the operational phase of the building, Prodeco will monitor the energy and water utilization efficiency performance, the effectiveness of the Life & Fire Safety programs, and other E&S performance of the Project.

Working conditions and Management of Worker Relationship:



Prodeco’s “Human Resources Management Policy” covers various HR areas such as key values and principles, work ethics, business dress code, employee recruitment, work relations, adaptation to the new environment, evaluation and grading of positions, performance evaluation, motivation, training, planned rotation, vacation, discipline, and labor safety. The grievance mechanisms for the employees are built into various HR policies. About 65% of Ameria Group’s employees are member of a labor union called Ameria Bank CJSC Trade Union. Prodeco has still a small number of employees (less than 10 employees), but they are eligible to join the labor union. Once the Project is under operation, Prodeco estimates that it will hire about 20 people to maintain the Project building. According to the information provided by Prodeco, the Prodeco and Ameria Group do not have any major pending labor issues.



Occupational Health and Safety:



The demolition of the existing building and construction of a new 9 story building will require careful management of occupational health and safety performance. The contractor being mobilized by Prodeco indicated to IFC that they have not encountered major occupational accidents at least during the past several years of operation in Armenia. The contractor will manage the occupational health and safety performance during the construction phase of the Project, and Prodeco will supervise the contractor’s performance in line with Prodeco’s Human Resources Management Policy (which has a section on labor safety) .

Resource Efficiency:



The architectural and engineering criteria for the Project, prepared by Prodeco for the contractor to conduct the detailed design, includes energy and water efficiency criteria. Although the selection of specific efficiency measures is still to be finalized, the key energy and water efficiency measures that Prodeco is considering include: sun shades, high R value windows, very efficient chiller/boiler system, photovoltaic and/or solar collectors, thermal storage, passive motion/infrared detectors, LED lighting, double flush toilets, low flow faucets. The new building will be incorporated with a building management system (BMS) that will monitor the amount of energy used, and the greenhouse gas emissions from business activities within the Project building.



Pollution Prevention:



Technical specifications of the wastewater treatment and backup generators are still to be determined through the contractor’s engineering design. The Project’s wastewater will be connected to the Yerevan Municipality sewage pipeline network, and the level of wastewater treatment requirement for the Project is still to be confirmed with the Yerevan Municipality. Prodeco will treat the wastewater as required by municipality. For the backup generators, it is likely that clean diesel fuel will be a possible fuel source, and the generators will have exhaust filters that will remove particulates to meet the Armenian and WBG EHS guideline limits. If clean diesel fuel is stored within the Project’s premise, adequate storage facility with bund will be used to minimize the risk of leakage. The construction phase waste, including excavated soil, will be transferred to special storage areas in acceptable distance from community following the Yerevan Municipality requirements. After construction phase is complete, and the Project enters into leasing phase, the solid waste generated from tenants activities will be contracted to specific waste removal company under the management of Yerevan Municipality. Prodeco plans to have a recycling program for different types of solid waste (paper, glass, plastic).

Community Health, Safety and Security:



Prodeco will incorporate European Life & Fire Safety (L&FS) standards into the design of the project. On conclusion of building design Prodeco will retain a suitably qualified life and fire safety professional to review and certify that the final detailed design of the building meets internationally recognized L&FS standards. On completion of construction, a suitably qualified professional shall review the completed building including the L&FS measures, and confirm that these are compliant with the design previously approved.



The Project site is within an existing city center and there are commercial buildings and apartments in the surrounding area. Prodeco will require the contractor to implement mitigation measures to minimize adverse impacts (dust, noise, vibration, traffic) on those surrounding receptors.



The territory of Armenia is divided into 3 seismic zones, and Yerevan (where the Project is located) is in the zone 3, which is 9-point seismicity. Prodeco and the contractor will design and build the building in full compliance with the Armenian seismic norms. Prodeco will have an independent body certify that the design and construction of the Project have met the required Armenian seismic norms.

The existing building consists of three parts: (i) the original bank building part constructed in 1910; (ii) the second building part constructed in 1911 and 1927, and (iii) the third bank building constructed in 1927. The Armenian Government Decision #1616-N of the RA Government dated October 7, 2004 has the list of Architectural Historical Monuments of both “local significance” and “republic (or national) significance”. The existing building of the Project site is listed under “local significance”. The existing building and its surrounding area has historically recognized as financial center of the city. Prodeco, being a member of Ameria Group, which owns Ameria Bank, one of the major banks in Armenia, wants to develop the Project to re-establish the old existing building into a modern office building, but still preserving the façade of the building so that historical memory of the banking building of over 100 years can be maintained. The Company conducted an international architecture design concept competition from December 2010 to March 2011and selected the design to build a new building using the main façade of the existing building. Several public hearings were held in 2012 to review the Project design involving the Ministry of Culture and Yerevan City Urban Council, before the basic design concept was approved in July 2012 by the Architectural Committee of the Urban Council under Yerevan City. Details of the public hearings held are explained under the Client’s Stakeholder Engagement section below.

Prodeco conducted an international competition on architectural design concept for the Project from December 2010 to March 2011. All the design concepts submitted to the competition were exhibited in the Republic of Armenia Union of Architects Hall for free exposition from March 15, 2011 to March 31, 2011. Several public hearings were held to date about the Project from the perspective of preserving the façade of the existing building, and how the Project’s new building will be designed in harmony of the surrounding urban design. The public hearings held so far include (i) May 11, 2012 – Session on Scientific Methodological Council of the Ministry of Culture, (ii) May 15, 2012 – Architectural Committee of the Urban Council under Yerevan City Mayor at City Hall, (iii) July 13, 202 – Architectural Committee of the Urban Council under Yerevan City Mayer at City Hall, (iv) November 22, 2012 – Meeting with leading architect of Armenia and students of Architectural higher Educational Institutions, Union of Architects Hall. The architectural design concept of the Project has been modified considering the suggestions and comments provided through these hearings.

Other key E&S issues identified during the public hearings and meetings included health and safety measures, construction area cleaning and the influence of the construction activities to the nearest community, dust control, and relocation of people. Prodeco managed not to relocate people, and will ensure that adequate mitigation measures will be implemented through the contractor to address other issues raised (i.e. dust, construction waste, health and safety measures).
Prodeco has “Communication and PR Support Plan – Business Center Development Project by Prodeco” which describes various stakeholder engagement and information dissemination programs. This includes Infoboards to be installed next to the Project site, launching Prodeco’s website, media campaign about the history and current status of the existing building, press conference, film programs for TV channels, and articles for media publications.

Mr. Artashes Kazakhetsyan
Director,
Prodeco Property Development Company CJSC
9, G. Lusavorich str. Yerevan 0015
Republic of Armenia
Phone: +374 10 56 1111
Fax: + 374 10 51 31 33
e-mail: mailto:artashes@ameria.am
http://www.prodeco.am

Prodeco Property Development Company CJSC
9, G. Lusavorich str. Yerevan 0015
Republic of Armenia
Phone: +374 10 56 1111
Fax: + 374 10 51 31 33
e-mail: mailto:artashes@ameria.am
http://www.prodeco.am

Site location
Bd. 2, V.Sargsyan 4,
Yerevan 0010
Republic of Armenia
http://www.prodeco.am

Broad Community Support is not applicable for this project

Current client performance is aligned with applicable Performance Standards and EHS Guideline requirements. No ESAP is required.