26457 - Porr AG

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Summary of Proposed Investment

Project Number

26457

Company Name

PORR AG

Date SPI Disclosed

Feb 1, 2008

Country

Southern Europe Subregion

Industry

Financial Markets

Projected Board Date

Mar 4, 2008

Status

Completed

Sector

Construction and Real Estate

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : May 28, 2008
Signed : Jun 3, 2008
Invested : Feb 5, 2010

Project Description

Allgemeine Baugesellschaft-A. Porr A.G. (Porr or the company) will undertake a series of small-to-mid size property development and waste management construction projects between 2008 and 2010 in central and southeastern Europe (CSE). These projects would each have a total project size of less than €30 million (sub-project) and would be located in Bosnia & Herzegovina, Bulgaria, Croatia, Macedonia, Montenegro, Serbia, Romania, and Ukraine (the Target Markets).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	47.78
Equity

Development Impact

By constructing and financing these varied sub-projects, which range from commercial and residential real estate development and waste water treatment and solid waste management, the following benefits will accrue:

- Support to urban infrastructure: The project will support the development of commercial real estate which will provide invaluable infrastructure enabling local and foreign firms to expand their businesses. This will contribute to enhancing their competitiveness as domestic and regional centers, where the sustainable development of multi-purpose real estate plays an essential role in taking advantage of the region''s proximity to Western Europe and its location on several pan-European transport routes.

- Support to public infrastructure: The project will also enhance the private sector participation in public infrastructure development under PPP and BOT structures, which still are not common in the transition economies.

- Improved quality and standards: Given the company’s extensive experience in construction in Western Europe, the project is expected to facilitate the transfer of technology, knowledge and know-how, thereby improving the quality and standards of planned infrastructure projects in the target countries. The company will employ EU standards in all its construction. It will also be expected to have a demonstration effect for other construction companies.

Benefits to the local economies: The project will benefit the local economies as result of increased demand for construction materials, labor and other relevant inputs needed for undertaking the investments. It will also generate significant revenue for the government from wide range of taxes.

Porr has specifically sought IFC’s funding in this project for the following reasons:

- providing political comfort to the company and parallel banks in funding sub-projects in the Target Markets, especially in the Balkans,
- structuring the financing to augment the company’s ability to grow sustainably in risky markets,
helping the company to raise long-term financing from other lenders; and
- helping position the company as a long-term player in the Balkans.

The key environmental and social issues associated with this project are Porr’s environmental and social assessment process, and the use of this process to design suitable mitigation of potentially wide project related environmental issues. These could range from issues of energy efficiency and life and fire safety in real estate projects to appropriate siting and design of environmental controls at a landfill site or waste water treatment facility. Occupational Health and Safety, particularly during projects’ construction phases also requires careful management.

The potential anticipated social and environmental impacts are relatively limited in scope, and may be readily mitigated. This is therefore an environmental category B project.

Contacts

For Inquiries About the Project, Contact

Helmut Beck
Allgemeine Baugesellschaft A. PORR AG
Absberggasse 47, A-1103 Wien, Austria

Telephone: +43 (0) 50 626-3531
Fax: +43 (0) 50 626-3495
E-mail: helmut.beck@porr.at
Website: http://www.porr.at

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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