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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 | 24491 |
| Project name | RedMed |
| Country | Algeria |
| Sector | Oil, Gas And Mining |
| Department | Infrastructure |
| Company name | RedMed SPA |
| Environmental category | B |
| Date SPI disclosed | February 6, 2006 |
| Projected board date | April 1, 2006 |
| Status | Completed |
| Previous Events | Signed: June 1, 2006
Approved: May 15, 2006 |
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| Description of company and purpose of project |
The Red Med Group (the Group or the company) comprising Red Med and its subsidiaries, Star Aviation and Laboratory Fechekur, provides integrated logistics support services to foreign hydrocarbons companies in Hassi Messaoud. Such services include the provision of a base camp (a fenced housing and office compound), mobile camps, ground transportation services, air transportation services, and medical testing.
The proposed IFC investment will support the Group’s capital expenditure program to meet increasing demand from foreign hydrocarbons companies for the next four years. The capital expenditure program will be about $32 million in total, including:
- an expansion of the base camp and mobile camp units;
- an expansion of the existing fleet of cranes and trucks as well as the storage yards,
- an acquisition of refurbished aircrafts; and
- a purchase of medical testing equipment. |
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| Project sponsor and major shareholders of project company |
| The Group is owned by Mr. Mohamed Fechkeur and his family members through their holdings of Red Med, which owns other subsidiaries in the Group. |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at $32 million. IFC is providing a $10million senior C Loan with an income participation feature. |
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| Location of project and description of site |
| The Group is located in Hassi Messaoud: the Group’s base camp, ground transportation services, and headquarters, are located on a 12 hectre site, about 5km from the Hassi Messaoud airport and about 10km from the down twon Hassi Messaud along the major road connecting the airport to Hassi Messaoud. The Group’s air transportation services are located within the premise of the Hassi Messaoud airport. The Group’s medical testing service is located in an office in the downtown Hassi Messaoud. |
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| Project Development Impact and IFC's Role |
The project is highly developmental. First, it would help strengthen the local logistics sector, which is crucial for attracting foreign investment in the hydrocarbons sector, the country’s engine of economic growth. Second, by supporting a local company with international service standards, the project will demonstrate that local private-sector companies can thrive by improving their operations to international standards. This is important in Algeria, as lack of entrepreneurial spirit from years of socialism has stymied growth in the private sector, which is critical in addressing high unemployment problems.
The proposed IFC investment is crucial for the Group to meet its growing demand. First, IFC will provide long-term financing necessary for the Group to undertake the proposed business expansion. The local banking sector is dominated by state-owned banks and has limited access to long-term funding resources. Second, IFC’s involvement has helped the Group improve its managerial and accounting standards closer to international levels. At the advice of IFC, the Group hired an international accounting firm to undertake asset revaluation and restructure the Group’s holding structure. The Group is also switching its accounting standards from local to the International Financial Reporting Standards (“IFRS”). Third, IFC support would enhance the Company’s reputation among its international client base and facilitate its future access to international capital markets |
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| Environmental and social issues - Category B |
This is a category B project according to IFC’s environmental and social review procedure. The following potential environmental, health, and safety impacts of the project were analyzed: EHS management systems; aircraft operations safety and emissions; camp-related water, sanitation and life safety; equipment maintenance-related hazardous materials and wastes management; and employee health and safety. The Group has presented plans to address these issues to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with applicable Algerian laws and regulations and World Bank Group requirements.
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:
At the Group’s headquarters office,
Red Med, route de In Aménas,
BP 509 Hassi Messaoud, wilaya de Ouargla. |
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| To contact the project company, please write to: |
Mr. Nadir Fechkeur, Manager,
Red Med, route de In Aménas,
BP 509 Hassi Messaoud, wilaya de Ouargla.
Tel: 213 29 73 92 70/71;
Fax 213 29 73 91 95 |
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