As of today MDM is a wholly-owned subsidiary of MDM Holding SE, an Austrian holding company. Until recently MDM Holding SE was beneficially owned 50% each by Messrs. Andrey Melnichenko and Sergey Popov, two Russian entrepreneurs.

In December 2006 MDM announced an agreement reached by its owners whereby Mr. Popov (who previously owned a 50% stake) will own a 90% share in the Bank and Martin Andersson (a founding partner of Brunswick Group and a former CEO and Chairman of UBS Brunswick Warburg investment bank), member of the Bank’s Strategy Committee, will acquire a 10% stake. As of the date of this Summary, the company, the ultimate beneficiary of which is Mr. Andrey Melnichenko, has transferred its 50% stake in MDM Holding SE to a company controlled by the beneficial interests of Messrs. Sergey Popov and Martin Andersson.

The project consists of a financing package comprising a senior loan of up to $100 million, a $35 million Trade Finance line under the Global Trade Finance Program and an equity investment of about $184 million in MDM Bank.

100.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	100.0
Equity

* These investment figures are indicative

MDM Bank is headquartered in Moscow, and operates 122 outlets and 200 ATMs across Russia.

The project will:

- expand availability of residential mortgages, especially in the regions outside Moscow,
- make available much needed term funding to SMEs, particularly in the regions, and
- facilitate the emergence of a strong and well-governed bank as a model for the Russian banking industry.

IFC’s role/contributions include:

- providing larger tem funding than is available in the market to MDM,
- support and strengthen MDM’s franchise through IFC’s associations,
- help strengthen MDM’s mortgage business through an IFC technical assistance program, and
- help MDM establish an environmental management system.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC analyzed MDM’s portfolio, and the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determined the Applicable Requirements based on an analysis of the potential social and environmental risks associated with MDM’s portfolio and considering IFC’s investment. The Applicable Requirements are:

- The IFC FI Exclusion List; and
- The applicable Russian Federation National Social and Environmental Laws and regulations.
- The IFC Performance Standards

IFC also reviewed MDM’s existing social & environmental procedures and capacity to implement the same.

Based on the Applicable Requirements and procedure and capacity review, MDM will be required to:

-Develop a Social & Environmental Management System (SEMS), or commit to an SEMS Plan detailing time bound actions/enhancements related to the establishment of an SEMS, prior to disbursement to the satisfaction of IFC.
- Identify responsible, qualified persons to manage and implement the SEMS.
- Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Requirements.
- Commit to take action to remedy any gaps in SEMS implementation on an ongoing basis.
- Submit a periodic report to IFC as per a format to be provided by IFC.