ALH Retail, is part of Fawaz Alhokair Group (the “Group”), a diversified corporation with core businesses in retail, real estate and entertainment, mainly across Kingdom of Saudi Arabia (“KSA”). Established in 1989, the Group is controlled by the Al Hokair family, one of the most prominent business families in Saudi Arabia. ALH Retail owns franchising rights to more than 80 established global apparel and other consumer brands (women’s wear, menswear, children’s wear, footwear, intimate wear and accessories), which it sells throughout its extensive network of mainly leased stores across the KSA and other countries, including emerging markets, such as Egypt, Jordan and Kazakhstan. The Company holds a market leader position in its business in the KSA. Thirty percent of ALH Retail is a publicly traded at Tadawul, the KSA stock exchange. The remaining 70% of the Company’s shares directly and indirectly (through the Group) are controlled by the founding family.

The proposed IFC investment comprises a corporate package of long-term loans to ALH Retail and its majority-owned subsidiaries in emerging market countries of operations for a combined amount of up to $75 million.

75.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	75.0
Equity

* These investment figures are indicative

ALH Retail’s new leased stores to be opened as part of the Company’s corporate expansion program and to be financed with proceeds of IFC’s loans will be located in modern malls with good access to transportation routes and other necessary infrastructure in cities throughout the Kazakhstan, Azerbaijan and Georgia.

Consumer Benefits: the expansion of the Company’s retail chain in the Central and Eastern Europe, as well as in the Middle East and North Africa regions, will enable ALH Retail to provide for its customers better access to a more diverse selection of high-quality, affordable apparel. This will be especially important for consumers in such countries as Azerbaijan and Georgia where modern apparel retail sector is still nascent. Stronger bargaining positions vis-a-vis suppliers, economies of scale achieved through geographical expansion, as well as improved inventory management are expected to result in cost savings, which eventually can be passed on to the end customer; Employment Generation: the expansion of the Company’s operations will create 1,000 permanent jobs. In addition, ALH Retail’s large-scale expansion will involve numerous leasehold improvements, which will generate temporary employment; Life and Fire Safety (“LFS”) Improvements: As a condition of the IFC investment, ALH Retail will commit to implement an improved LFS Action plan; Supporting IFC's reach in frontier regions and south-to-south investments: establishing a long term partnership with an important local player in its expansion plans to surrounding developing countries;

Long-term financing: providing long-term financing at competitive terms with the adequate tenor required for the Company's corporate program involving expansion across Central Asia, the Caucasus, Eastern Europe as well as Middle East and North Africa; Risk Mitigation: IFC's knowledge of the retail sector is important in assessing the feasibility of ALH Retail’s expansion. IFC's financial structuring expertise will ensure that this project is bankable and that its risks are properly mitigated;

Key environmental, social and health and safety issues associated with Sekem’s expansion include: occupational health and safety and terms of employment, child labor, environmental planning and permits required by national authorities; solid waste management, air emissions from all sources; energy consumption and energy efficiency; terms of employment; life and fire safety; and security arrangements.

IFC’s project review comprised site visits to several of ALH’s retail stores in Saudi Arabia, Egypt and Kazakhstan. In addition, the review included a review of information provided by ALH on environmental and social management and performance including the Group’s Human Resources policies and procedures, loss prevention program, security policy and procedures, and detailed questionnaires on each of its country operations; as well as meetings with ALH’s management team in Riyadh and regional management team in Almaty. A detailed description of IFC’s environmental and social due diligence of this investment can be found in the Environmental and Social Review Summary (ESRS) and associated Environmental and Social Action Plan (ESAP), which are also available on IFC’s website at http://www.ifc.org/projects.