1. This project involves the construction of a greenfield yogurt plant to supply the domestic market. The project will also invest in dairy extension services and a modern milk collection system. This is a category B project according to IFC''s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

2. Key environmental, occupational health and safety issues that are of potential concern in this project include:
· site selection;
· air and water emissions;
· solid waste and hazardous materials handling;
· use of CFCs;
· plant hygiene;
· fire protection and emergency response; and
· general worker health and safety.

The information provided about how these issues and potential impacts have been addressed in the development of the project are summarized in the paragraphs that follow.

3. The project involves the construction of processing facilities (main factory, utility buildings, administration areas and water supply and waste water treatment facilities) over an area of 15 ha in Stupino raion 150km south of Moscow. The land is currently farmed and there are no environmentally sensitive areas in the vicinity of the site. No resettlement is required to develop the site, and planning permission for development has been received from relevant planning authorities.

4. Air emissions arise from boilers (for steam generation) as well as dust and odor from processing activities. The site will have two new oil fired boilers (0.5tons/steam/hr each). Emissions are monitored by the company and data will be provided to IFC annually. Odor and (milk) dust levels will be controlled by ventilation and fabric filters respectively. Workplace dust levels will be within World Bank Group guidelines. Refrigeration systems will use ammonia and limited use of R404A a commercially available CFC free refrigerant.

5. The plant will utilize water recirculation and re-use which will reduce water and chemical consumption by between 85-90% and a dedicated wastewater treatment plant will be constructed to treat remaining process discharges. The design of the plant will allow effluents to comply with World Bank Group guidelines for BOD, COD, suspended solids and oil and fats. An oil separator will be included in the storm water drainage sewer for the site''s car park. Local sanitary, epidemiological and environmental authorities are content with discharge arrangements and effluent quality.

6. Solid waste will include polystyrene, card and paper, which will either be re-used (by others) or disposed of in licensed landfills.

7. Hazardous materials that will be used in the plant include; ammonia (for refrigeration) and sodium hydroxide. All chemicals will be securely stored and access will be restricted to staff with requisite training. Storage areas will include secondary containment and a spill action plan will be developed and a fire control system will be installed.

8. With regard to health and safety issues, standard protection measures and personal protection equipment will be employed. Noise levels will be within World Bank Group guidelines. The sponsor is installing new equipment throughout, and plant hygiene will comply with all relevant standards.

9. The company has a formal environmental policy and has appointed a senior staff member with responsibility for environmental matters.

10. IFC will monitor ongoing compliance with World Bank Group environmental, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by Campina and by conducting periodic supervision.

11 Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Campina''s proposed project will meet World Bank Group environmental, health and safety policies and guidelines and host country requirements.