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| Bangladesh National Schools |
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| Summary of Proposed Investment |
| 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. 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. |
| Project number | 25771 |
| Company name | Scholastica Private Limited |
| Country | Bangladesh |
| Sector | Education Services |
| Environmental category | B |
| Department | Health and Education |
| Status | Pending Approval |
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| Date SPI disclosed | August 6, 2007 |
| Projected board date | September 6, 2007 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The project will be the construction of four K-12 schools located in Dhaka and in other main cities of Bangladesh. Each school will have a capacity of 3,000 students at maturity. The schools will be opened one after another over four consecutive years, with a construction period for each school of two years. The project will be pursued by a new company. The schools will provide a combination of international and local curriculum, taught in English. When the four schools will be fully operational, total enrollment will exceed 12,000 students. |
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| Project sponsor and major shareholders of project company |
The sponsor is Scholastica Group (Scholastica), a group of companies owned by the Murshed family which started as an English-language private school in Dhaka in 1977 (Scholastica School). For a number of years, Scholastica School was the only business of the Murshed family. In the last decade, the Murshed family established new companies to provide certain school services –particularly, transportation, catering and supplies, interior design and construction. Today, these companies have diversified their business beyond the provision of services to the Scholastica School, and operate retail establishments and provide design, real estate and construction services to individuals and businesses.
The shareholders of the new company that will be developing the project will be as follows:
- Scholastica companies and individual members of the Murshed family, holding approximately 50.2% of the shares of the new company after project completion;
- IFC, holding approximately 19.9% of the shares of the new company after project completion;
- FMO, holding approximately 29.9% of the share of the new company after project completions, including approximately 10% in preferred shares. |
| Total project cost and amount and nature of IFC's investment |
| The total project cost is estimated at $20 million equivalent. IFC’s proposed investment is a common equity investment of approximately $2 million, split into two tranches, aimed at the construction of the two first schools, and approximately $5 million, split into two tranches, to finance the construction of schools three and four. |
| Location of project and description of site |
| The schools will be located in Dhaka and in other major cities of Bangladesh. It must be noted that the main Scholastica operations to date have been in Dhaka. |
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| Anticipated development impact of the project |
The project will have a strong development impact by expanding access to quality English-language K–12 education in Bangladesh for boys and girls. At full maturity, the project will provide additional spaces for more than 12,000 students, half of whom girls. The project will have a strong demonstration effect, which is particularly important given the significant quality problems faced by the Bangladeshi education system, in particular at the secondary level.
The project will also contribute to a much needed upgrading of general skills in the economy. The labor market increasingly demands workers with bilingual language skills (English and Bengali) and there is currently very little provision of English-language education available for children outside Dhaka. |
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| IFC's expected development contribution |
| IFC will be providing a combination of equity and debt to launch and ramp-up the project. IFC’s equity contribution will provide risk capital which is extremely difficult to source locally. The loan will offer longer maturities and grace period than are currently available to the sponsors in Bangladesh to permit student build up. Additionally, IFC will help facilitate endorsement of the project will play a catalytic to bring in other investors and give credibility to the project. |
| Environmental and social issues - Category B |
This is a Category B project according to IFC’s Policy and Performance Standards (PS) on Social and Environmental Sustainability. Review of this project consisted of appraising technical, environmental and social information submitted by BNS related to environmental management, life and fire safety, and occupational health and safety; as well as meetings with the BNS management team in February 2007 to discuss IFC’s requirements.
BNS will develop an environmental, social and health and safety (ESHS) management system and procedures to guide the operation of all BNS facilities that will ensure compliance with both IFC PSs, IFC guidelines, and relevant national and local government requirements. This includes mainly the areas of Labor and Working Conditions, Pollution Prevention and Abatement, Community Health, Safety and Security, Land Acquisition and Involuntary Resettlement, Cultural Heritage and Community Engagement. |
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| For inquiries about the project, contact: |
Mr. Syed Maher Murshed
Khawaja Tower (11th floor), 95 Mohakhali
Dhaka, Bangladesh
Telephone: (8802) 885 6018-20, ext. 114
E-mail: maher@scholasticabd.com
The environmental documents will be made available at the above location. |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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