M10 Industrial Park Ukraine
On September 28, 2023, MIGA issued guarantees to UIPH Ukrainian Industrial Property Holding Limited Evolution and Annual Meetings Updateof Cyprus (UIPH) to cover its equity and shareholder loan investments of up to USD 9.6 million into Limited Liability Company “Industrial Park M10” in Lviv, Ukraine. The tenor of the MIGA guarantee is up to 10 years against the risk of War and Civil Disturbance.
The project consists of the development of a new modern multi-tenant warehouse located at the borders of the city of Lviv, west of Ukraine. The project provides new industrial and logistics warehouse space that will help the country expand access to vital services and products both during the war and post-war reconstruction period.
UIPH is a joint venture between the European Bank for Reconstruction and Development (EBRD) and Dragon Capital Investments Limited, which invests in Ukrainian industrial and logistics infrastructure to enhance Ukraine’s access to vital services and products.
Environmental and Social (E&S) Project Categorization
The project is located in an industrial zone, which is situated in the western part of Lviv, 9 km away from the city center, and on the facade of the M10 highway. The project site does not overlap with protected areas and there are no adjacent communities. The project will not store dangerous goods, such as hazardous chemicals, explosives, and flammable materials within the industrial warehouse. The project’s construction is currently ongoing and is expected to be completed in the coming months.
The project is a category B under MIGA’s Policy on Environmental and Social Sustainability because the potential E&S risks and impacts are limited and readily addressed by standard mitigation measures. The key E&S risks related to the project include the capacity and systems to manage E&S risks and impacts, stakeholder engagement, emergency preparedness and response, labor and working conditions, and contractor management.
Although the project was not required by the national law to develop an E&S impact assessment, the project covered potential E&S impacts and proposed mitigation measures in its feasibility assessment and design. The project is expected to adopt the E&S policy and management system of the Guarantee Holder, which is in line with the requirements of Performance Standard 1. The project adopts UIPH’s E&S Action Plan (ESAP), which has been agreed with its lenders, to address the key E&S risks identified. This ESAP was updated to reflect E&S actions specific to Industrial Park M10 (link to ESAP ). Actions in the updated ESAP include the establishment and implementation of a project-level E&S management system; development of an emergency preparedness and response plan; improvement of contractor management; and enhancement of labor practices and occupational health and safety. Through the implementation of the E&S management system and the actions in the updated ESAP, the project is expected to be operated in accordance with the Performance Standards.
The Project is expected to support Ukraine’s efforts to sustain economic activity and industrial advancement by providing state of the art industrial warehouse space in Lviv. The Project will provide an alternative for displaced firms to continue their operations amidst the active conflict, optimizing supply chains and creating a wide range of economic benefits for firms and more broadly the country (including through employment and government revenue generation). The Project will also support the country’s climate change agenda by supporting the development of a modern eco-industrial park facility. At the same time, the Project will send a strong signal to potential investors of the continued support of the multilateral community, including that of MIGA.
The World Bank Group is committed to support Ukraine through the different stages of the conflict. In April 2022, the WBG launched an Approach Paper for Relief, Recovery and Resilient Reconstruction of Ukraine, in which it highlights that the priority during the Relief stage is to preserve as much of the economic capability as possible. By allowing firms to maintain the basic functioning supporting economic activity during the active phase of the conflict the project will be aligned to WBG approach strategy. Additionally, the Project is aligned WBG’s Fragility, Conflict and Violence Strategy – specifically under Pillar 2 (“Remaining Engaged During Conflicts and Crisis Situations”).