The Sponsor is Groupe Auchan SA, the 4th largest retailer in France with a 9.2% market share and the 10th world’s largest food retailer in terms of revenue. Groupe Auchan operates 774 hypermarkets and 817 supermarkets in 15 countries, with 302.525 employees. The Group has 4 complementary business lines: (i) hypermarkets, (ii) supermarkets, (iii) commercial real estate (Immochan), and (iv) consumer banking activities (Banque Accord). Groupe Auchan SA is a privately-held company with two main groups of shareholders: 88.1% owned by the Mulliez family (“Association Familiale Mulliez” or “AFM”), and 11.9% owned by employees.

The proposed investment is a €250m facility to finance the retail expansion of AuchanSuper in emerging markets and developing countries over the period 2014-2016, for an estimated project cost of €600 million. The facility will be used to provide debt and possibly equity to the country operations of Auchan to finance existing or new country operations (the sub-projects) in countries in Eastern Europe, Asia, or Africa. The first two sub-projects are (i) the expansion of the supermarket operations of Auchan in Russia and (ii) the opening of supermarket operations in Vietnam.

345.73 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	304.24
Equity	41.49

* These investment figures are indicative

The first two subprojects are located in Russia and Vietnam. The future subprojects will be located in countries to be identified in due time, in Eastern Europe, Asia and Africa.

i) Affordable goods for lower to middle-income households: consumers will benefit from increased access to better quality and variety of products at lower prices. Auchan''s target is explicitly the lower bracket of the middle income class in urban areas.
ii) Employment generation: Auchan''s projects will create significant local direct employment (with a significant portion of female employment) and in addition also indirect employment in the retail value chain. Typically a retail store creates approximately three full time positions for every 100 square meters of building area.
iii) Expansion in second-tier cities and frontier regions: Auchan''s expansion will not only target large cities but also second-tier cities in frontier regions of countries such as Russia.
iv) Best practice transfer: Auchan''s projects are expected to (a) facilitate the transfer of modern retail and management techniques, which allow lowering food prices without compromising the food quality, to the targeted regions and (b) enhance the efficiency of the supply chain in the countries and promote efficient logistic system.
v) Impact on Food Safety: The expansion of modern food retail formats will contribute to food safety by improving supply chain efficiencies, and reducing food waste. The procurement of products locally sourced will generate backward linkages and encourage local producers to process according to best operating standards in terms of safety and quality.

The proposed IFC investment will have the following additionality features:
i) Accompanying a global retailer in difficult markets: Auchan values IFC''s country knowledge, country risk appetite and knowledge of the global retail market
ii) Provision of long-term financing from debt to equity in local or hard currency: Long-term financing is not easily available in Auchan''s targeted countries and IFC capability to match the profile and the currency of the Project''s cash flows is valued by the Group. Furthermore IFC is able to provide both loan products and equity for Auchan''s development.
iii) Standard setting: IFC will ensure that the Project is implemented based on best practice environmental, social, health and safety standards.

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. These impacts can be avoided or mitigated by adhering to generally recognized performance standards, procedures, guidelines or design criteria.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.