The founding companies for Grupo M were established in 1986 by Fernando Capellan, a Dominican Republic (DR) entrepreneur. Grupo M, the holding company, was established in 1993. Fernando Capellan and family members are the controlling shareholders who, together with senior management and company staff hold 82% of the outstanding share capital. Banco Popular, the largest financial group in the Dominican Republic holds 10% of the outstanding shares, while the remainder is held by other local shareholders.

The total cost of the project is estimated at $43 million of which $11 million is the projected cost for the first phase of the Haiti Project. The proposed IFC financing consists of a $20 million loan for IFC’s account to Grupo M to fund ongoing capital expenditures and debt restructuring and a second $3 million loan for IFC’s account to the Haiti Project development company.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

* These investment figures are indicative

Grupo M’s main production facilities are located in two industrial zones developed by the group in Santiago, Dominican Republic. The Haiti Project is located on the northern border of the Dominican Republic and the Republic of Haiti on the outskirts of the towns of Ouanaminthe (Republic of Haiti, population 56,000 ) and Dajabon (Dominican Republic, population 65,000). The development plan for phase 1 of the Haiti Project will include - site clearing and access roads and utilities, - training center, staff facilities (medical services and cafeteria) and customs clearing offices, and - 3 factory buildings owned by Grupo M.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental/social information submitted by the project sponsor as well as a site visit by an environmental and social specialist in April 2003. The following potential environment, health and safety and social impacts of the projects were analyzed.

- Corporate Environmental and Social Management Systems and capacity;
- Land acquisition and economic displacement;
- Air emissions and noise;
- Water supply and discharge;
- Solid and liquid waste disposal;
- Use of CFCs;
- Occupational health and safety including employee exposure to noise and dust;
- Fire protection and emergency response;
- Trans-boundary and influx migration issues.

The sponsor has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the Environmental Review Summary which has been released for public consultation in parallel with this document.

Location of environmental documents in locally affected community
The Environmental documents and ERS will be made available at the following locations: -a) Dominican Republic On the bulletin board, in the medical center and the cafeteria of the Grupo M @ Caribbean Industrial ParkMatanzasSantiago, Dominican Republic b) Haiti consulate in Dajabon. Consulate in Dajabon C/ Presidente Henriquez Dajabón Jean Bautiste Bien-Aime-Consul Phone: (809) 579-8287 (c) Governors Offices C/ Victor Ml. Abreu Dajabón Casiano Lora- Governor Phone: (809) 579-8268 - Republic of Haiti (d) Police OfficesSaint Pierre, Street OuanaminthePhone: 011-262-5884 (e) Municipal Council Calle Du-Mamche #3 Ounaminthe

Grupo M is the largest private sector employer in the DR. The company has been an innovator in adopting sustainable business practices since its founding. The Group has ISO9002 certification and has won awards for labor practice and corporate citizenship. Financing of Grupo M is an opportunity for IFC to secure the long term growth of the Group. The Haiti Project will have a very significant development impact. This project is the key private sector development in the Republic of Haiti creating an opportunity to rejuvenate the garment sector in the country, which once employed more than 60,000 people but has reduced substantially in the past 10 years. If successful, the development of the zone and the direct investments by Grupo M can be expected to mobilize significant other private sector investments creating as many as 60,000 direct and indirect jobs and thus a dramatic impact to alleviate poverty. IFC is working closely with the Group on additional initiatives in support of sustainability and linkages to the wider community in Haiti. IFC will play a key role in this investment, firstly through its support of a major private investor making a first investment in the Republic of Haiti. IFC’s presence as a long term investor will significantly enhance the attractiveness of the Haiti Project for Grupo M and for other private sector investors who can be expected to follow their lead. The proposed IFC corporate financing of Grupo M will provide otherwise unavailable long term funding to significantly bolster the long term competitiveness and sustainability of Grupo M, the largest employer in the DR and the flagship of the Dominican garment sector.