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| Summary of Project Information (SPI) |
| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
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| Project number | 22739 |
| Project name | Galnaftogas |
| Country | Ukraine |
| Sector | Chemicals |
| Department | Oil, Gas, Mining And Chemicals |
| Company name | OJSC "Concern Galnaftogas" |
| Environmental category | B |
| Date SPI disclosed | April 13, 2005 |
| Projected board date | May 20, 2005 |
| Status | Active |
| Previous Events | Invested: February 14, 2006
Signed: July 29, 2005
Approved: July 15, 2005 |
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| Description of company and purpose of project |
| Joint Stock Company “Concern Galnaftogaz” (GNG or the company) operates one of Ukraine’s new and fastest growing network of service stations selling petroleum products and related services. It is based in Western Ukraine, which is where it has the strongest market presence. IFC’s investment will provide financing for further expansion of the company’s network to other regions in the country, which will result in a significant increase in its market share and profitability. |
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| Project sponsor and major shareholders of project company |
| The sponsor is Financial and Investment Energy Holding (FIEH), a Liechtenstein based company with interests in various sectors in Ukraine including energy, agriculture, construction, banking and insurance. FIEH owns directly and indirectly about 71% of the shares of GNG. |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at $115 million over five years. The proposed IFC investment consists of an A loan of up to $20 million and equity/quasi-equity of up to $5 million |
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| Location of project and description of site |
| The company is headquartered in Lviv, Ukraine. Its network of service stations is concentrated around Western Ukraine, however, as a part of the project, GNG has plans to spread its network throughout Ukraine. |
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| Project Development Impact and IFC's Role |
The project will allow GNG to gain economies of scale, improve its operating efficiencies, raise quality standards, and ultimately increase competition in the domestic retail petroleum product sector. It will employ and train more than a thousand Ukrainians over the five-year project horizon, and is likely to generate further positive downstream impacts including higher construction spending and development of small entrepreneurs through outsourcing of supplies and services. GNG is among the few pilot companies in IFC’s Ukraine Corporate Governance program and the company’s success in attracting international financing could have a demonstration effect on other domestic firms.
IFC's key roles in the project include:
- providing long-term financing to a local company with good growth prospects;
- providing inputs on environmental and social aspects to ensure that the company’s facilities comply with international standards; and
- supporting the company’s efforts toward achieving corporate governance best practices. |
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| Environmental and social issues - Category B |
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 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. The following potential environment, health and safety, and social impacts of the project were analyzed.
- Environment, Health, and Safety (EHS) management;
- General conditions of storage terminals;
- General conditions of service stations;
- Water sources and liquid effluents;
- Air emissions, workplace monitoring, and ambient air quality;
- Hazardous materials, and solid/hazardous wastes;
- Fire prevention, occupational health and safety, and emergency response (ER) plans;
- Community relationship and community development;
- Land acquisition for new service stations.
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 of the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
Environmental documentation will be made available at the following location:
13 Kotsubinskogo Street
Lviv, Ukraine 79005 |
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| To contact the project company, please write to: |
Mr. Yuriy Kuchabskiy, Executive Director
13 Kotsubinskogo Street
Lviv, Ukraine 79005
Fax: +38 032 298 96 02 |
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