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| Education Capital Holding |
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| Environmental & Social Review Summary |
This Environmental and Social Review Summary is prepared and distributed 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 of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. |
| Project number | 27932 |
| Country | MENA Region |
| Sector | Education Services |
| Department | Health and Education |
| Company name | First Education Holding B.S.C. (c) |
| Environmental category | B |
| Status | Pending Disbursement |
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| Date ESRS disclosed | May 5, 2009 |
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| Previous Events | Signed: June 25, 2009
Approved: June 23, 2009 |
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| View Summary of Proposed Investment (SPI), click here |
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| Overview | Category & Applicable Standards | Key Issues & Mitigation | Community Engagements | Client's Documentation |
| Overview of IFC's scope of review |
| This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects. The review of this project consisted of appraising technical, environmental and social information collected from the project sponsor including visits to Al Zuhour Private School (Sharjah, UAE), Al Maaref Private School (Dubai, UAE), and Baby Academy (Cairo, Egypt). |
| Project description |
Education Capital Holdings Group (the Group) is a Bahrain-based education holding group, established in late 2006, focusing on acquiring schools and education related businesses and providing strategic management support to the acquisitions. The Group is comprised of two separate legal entities/companies with different shareholders: First Education Holding (FEH) is the asset holding company, and Education Capital Holdings (EdCap or the Company) is the management company of FEH investments with a management contract with FEH.
EdCap targets preschool through secondary (K-13) private schools and other education related businesses across the Middle East and North Africa (MENA). The Group currently owns 100% two education businesses located in Dubai and Sharjah (both in the UAE) and 60% of a nursery in Cairo, Egypt. The facilities in UAE serve 2,858 students till grade nine with total of 107 classrooms (Al Zuhour 51 classrooms with 1,479 students & Al Maaref 56 classrooms with 1,379 students). The Baby Academy group has 4 nurseries in Cairo, Egypt hosting about 800 infants to preschool (ages 3 months to 4/5 years); the nurseries are usually 1-2 floors villas (except for City Stars Mall). |
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| Identified applicable performance standards |
While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:
- PS1: Social and Environmental Assessment and Management Systems;
- PS2: Labor and Working Conditions;
- PS3: Pollution Prevention and Abatement; and
- PS4: Community Health, Safety and Security.
The project appraisal also assessed the applicability of PS5: Land Acquisition and Involuntary Resettlement, PS 6: Biodiversity Conservation and Sustainable Natural Resource Management, PS 7: Indigenous Peoples, and PS 8: Cultural Heritage. In regard to PS5, no land is being acquired as EdCap’s current strategy is to acquire established education facilities on a “willing buyer-willing seller” basis, rather than to construct new facilities including the 3 acres of land owned by Al Zuhour which might be utilized for construction of a new facility. With respect to PS 6, the project sites are usually located in heavily modified urban neighborhoods and no impact on biodiversity is therefore expected. Regarding PS 7 and PS 8, no indigenous peoples or cultural heritage resources are affected by development of the project. |
| Environmental and social categorization and rationale |
| No land is being acquired for this project as EdCap’s business model is to acquire existing facilities (schools, nurseries). The nature of EdCap’s operations is such that adverse E&S impacts are minimal, limited largely to the site of each school, and easily mitigated and managed. For these reasons the project has been classified as a Category B. |
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| Key environmental and social issues and mitigation |
The key environmental, social, health and safety associated with the project include implementation of environmental, health and safety management system; employment practices and working conditions; and occupational health and safety, including life and fire safety. The information about how these potential impacts will be addressed by the Sponsor is summarized in the paragraphs that follow.
PS1: Social and Environmental Assessment and Management Systems:
The Group will develop an environmental, health and safety (EHS) management system as well as facility guidelines and maintenance procedures and incorporate them into a comprehensive social and environmental management system (SEMS) to guide the operation of all existing facilities and future acquisitions. The SEMS will ensure compliance to both applicable host country(s) environmental and social regulations as well as IFC’s PSs and guidelines, in accordance with a timeframe agreed with IFC. The SEMS system and procedures will also ensure that EdCap plans and implements its future building program(s) in accordance with the IFC PSs, IFC guidelines and national requirements.
Host country regulatory requirements for educational premises in the UAE and Egypt do not require preparation of an environmental impact assessment, but do require compliance with building codes, including life and fire safety (L&FS) codes prior to receiving an operational license. EdCap’s existing facilities in both the UAE and Cairo have complied with all national L&FS requirements. EdCap is committed to develop corporate guidelines for emergency response planning, including fire, hazard, assault, violence and personal injury and will do so in accordance with a timeline agreed with IFC. EdCap is aggressively working to obtain accreditation from the Commission on International and Trans-Regional Accreditation (CITA) for its operations in UAE. EdCap has consolidated its operations to ensure consistent standards across the acquisitions.
As part of IFC’s investment, The Group will submit a Life & Fire Safety (L&FS) Master Plan to IFC that identifies major fire risks, applicable codes, standards and regulations, and mitigation measures. The L&FS Master Plan will be prepared by a suitably qualified professional acceptable to IFC who will certify that the design meets the requirements of IFC’s Life and Fire Safety guidelines. On the basis of the Master Plan and its findings and recommendations, IFC will determine whether additional conditions to the attached Environmental and Social Action Plan (ESAP) are needed, and agree with the company on a mutually acceptable time frame for implementing these conditions. The qualified professional who prepares the L&FS Master Plan also will undertake a review of L&FS systems testing and commissioning of existing facilities and new acquisitions and certify that construction of these systems has been carried out in accordance with the accepted design. Findings and recommendations of this review may be incorporated into the ESAP, as needed, along with a mutually acceptable time frame for implementation.
PS 2: Labor and Working Conditions:
All new and existing staff at the school level (teaching and admin staff) will continue to be contracted with their respective school. Only EdCap staff will be transferred to FEH after the merger. At present, full time staff number approximately 255 in UAE (154 at Al Zuhour and 101 at Al Maaref) plus 52 contracted staff/drivers, In Egypt, total staff number approximately 364 with less than 4% part-time and 2% contractors. Staff Manuals and general HR policies are present at the facility level for both Al Zuhour and Baby Academy. All newly-hired employees undergo a probation period of three to six months. Employee benefits include governmental medical insurance in UAE and some health plans in Egypt as well as a policy of offering school fee discounts to children of employees.
The facilities in UAE are equipped with laboratories and appropriate OHS equipment including laboratory goggles, gloves, first aid kits and fire blankets. The Group has agreed to include in its Operation Manual all aspects of laboratory(s) and clinic(s) management to address OHS procedures and safeguards to be standardized in all operations.
EdCap has confirmed that it complies with all host country labor laws in the countries in which it operates. Although at present it does not have a comprehensive corporate human resources (HR) policy that covers all of its operations, The Group will consolidate its employment policies into a formal system, which will be provided to IFC within an agreed timeframe. The system will include an HR Manual, policies and procedures, including grievance mechanism, that conform fully to all PS2 requirements including forced labor forms as well as host country labor law and regulations. EdCap also will put in place guidelines and ensure enforcement of proper E&S management of third party providers to ensure safe transportation, proper hygiene for food/meal providers, and all contractors.
PS 3: Pollution Prevention and Abatement:
EdCap strategy is to acquire developed facilities in urban areas where infrastructure facilities of water supply, wastewater collection and power are supplied by relevant municipalities. In addition to classrooms, the Group’s facilities may include laboratories, cafeterias, washrooms, and auditoriums. None of the facilities includes dormitories as all students are day scholars. The Group has agreed to monitor and annually report on wastewater discharge of facilities from laboratories to ensure that these comply with local requirements as well as IFC Environmental, Health, and Safety Guidelines.
EdCap’s future expansion plans in UAE facilities are to add one store-level in Al Maaref School and additional building at Al Zuhour School to cater for an additional 780 students in grades 10-12 (480 at Al Zuhour 480 and 300 at Al Maaref). In addition, EdCap is considering the possibility of utilizing approximately 3 acres of land at Al Zuhour to construct a new school facility in future. EdCap’s plan is to utilize relatively standard designs for all of the facilities to be developed under the Project. IFC will request additional details on how EdCap will ensure that the facility(s) will comply with PS3 during construction. Submission of this information will be covenanted as a Condition of Disbursement and included in the ESAP.
PS 4: Community Health, Safety and Security:
As noted above, EdCap has agreed to submit for future acquisition(s) fire safety Master Plan to IFC. The company also has agreed to put in place a disaster response plan for earthquakes, fires and other large scale emergency situations. |
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| Client's community engagement |
| EdCap focuses on providing educational services to communities in UAE and expanding to Egypt and other countries in MENA. Al Maaref School currently is engaged with Red Crescent, Dubai Cares Foundation for Charity, and Chivalry Clubs and donates the revenue of open-days to charitable causes. Al Zuhour School is engaged in programs with Red Crescent, Shell Environmental Program, and A Million Tree Plantation Campaign for raising awareness of teachers and students on community responsiveness to environment. |
| Local access of project documentation |
Contact person:
Mr. Louay Khatib
Managing Director, EdCap
P.O.Box 502930 Dubai, United Arab Emirates
Tel: +971 4 364 4818
Fax : +971 4 367 8495
Email: lkhatib@edcapholding.com |
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| Availability of Full Documentation |
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| Information Disclosed |
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