38274 - FCS Viva Fresh Kosovo

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Summary of Investment Information

Project Number

38274

Company Name

VIVA FRESH RKS

Date SPI Disclosed

Nov 18, 2019

Country

Kosovo

Region

Europe

Projected Board Date

Jan 31, 2020

Environmental Category

B - Limited

Status

Active

Last Updated Date

Dec 17, 2021

Department

Regional Industry MAS LAC & EUR

Industry

Tourism, Retail and Property

Previous Events

Approved : Jun 3, 2020
Signed : Jun 30, 2020
Invested : Dec 14, 2021

Sector

Retail (Including Supermarkets, Grocery Stores, etc.)

Project Description

The proposed investment is a senior secured corporate loan to Viva Fresh sh.p.k (the “Company” or “Viva Fresh”) that will be used to fund the Company’s medium-term retail expansion plan. Founded in 2002, the Company is the largest food and non-food physical retailer in the Republic of Kosovo having a diversified portfolio of fast-moving consumer goods, fresh foods, fashion, footwear, and home goods categories. At the end of September 2019, the store network operating under the Viva Fresh Store banner comprised 63 units, of which one in Skopje, Republic of North Macedonia.

Associated Advisory Engagement

The Company is working with IFC’s advisory services to improve its corporate governance practices, including governance of environmental and social issues. IFC has provided Viva Fresh with a set of recommendations tailored to strengthen internal processes, decision-making and strategic oversight. Viva Fresh is currently working on implementing these recommendations.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.57
Equity

Development Impact

The Project is expected to have a positive development impact, the most significant expected Project-level impact is derived from: (i) economy-wide, employment and supply chain development effects through the expansion of the Company retail network and; (ii) stakeholder effects through improve access of local lower and middle-income consumers to a more affordable and diverse selection of high-quality food products. Beyond the Project, IFC investment will help companies along the supply chain in the Republic of Kosovo to integrate into domestic supply chain.

With the proposed Project, IFC provides financial additionality through the provision of long-term financing that is not readily available in the market and non-financial additionality through standard setting. Financial Additionality: IFC will provide a long-term local-currency loan that will have a longer grace period than available from local banks. The loan will improve the Company's debt profile and enhance its access to outside complementary capital, thus reducing its domestic-bank dependence, which will make the Company less vulnerable to financial and domestic banking shocks. Moreover, IFC's long term financial commitment in local currency will allow the Company to continue with the expansion strategy amid an elevated political risk in the country, which negatively impacts the supply of credit. Non-financial Additionality: IFC will support the Company to (a) enhance its E&S practices and develop an E&S management system; and (b) improve its corporate governance and reporting standards. Additionally, IFC will provide technical knowledge and advice on green building standards and work with Viva Fresh to introduce EDGE green-building certification system in Kosovo. Moreover, IFC will share its global industry knowledge and experience to help Viva Fresh become even more resilient and innovative.

E&S Category Rationale / Risks and Mitigation

This project is categorized as B according to IFC’s Policy on Environmental and Social Sustainability as the E&S impacts are expected to be mostly site specific and localized and can be avoided or mitigated by adhering to the performance standards, guidelines or design criteria and adequately managed through the implementation of a project specific Environmental and Social Management Plan.

Specific key environmental and social issues reviewed include: i) project sponsor’s corporate environmental and social management capacity to operate in a manner consistent with IFC Performance Standards; ii) labor and occupational health and safety aspects of the operations; iii) efficient use of energy and water in operational phase; iv) life and fire safety (L&FS) conditions of the project; v) solid waste management; vi) customers health and safety issues such as potable water, food safety and emergency response; vii) supply chain elements related to potential risks of child or forced labor; and viii) transport management. Land acquisition for new stores and warehouses in Kosovo and the region were reviewed and a contextual risk analysis completed.

Contacts

For Inquiries About the Project, Contact

Viva Fresh Sh.P.K
Korab Hoxha
Deputy CEO
+383(0)38408888
Korab.Hoxha@vivafresh-rks.com
Veternik P.N,10 000 Prishtine Kosovo
https://www.vivafresh-rks.com/

For Inquiries and Comments About IFC, Contact

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Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

Local Access of Project Documentation

Viva Fresh Sh.p.k.

Fshati Suhodoll pn, Gracanice, Republic of Kosovo

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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