ENERGY GENERATION AND SUPPLY

Holding Montealban, S.A. de C.V. ("Puertas Finas" or the "company") is a leader in the production of doors, contract woodwork, plywood, kitchens, and furniture in Mexico. The company has production facilities in various parts of Mexico, and its headquarters are located in Oaxaca. IFC has previous investments with the company, including Puertas Finas II (#33550), currently under supervision. The proposed IFC investment ("the Project") consists of approximately $2 million in the form of an A Loan through the Cleaner Production Lending Facility ("CPLF"). The Project will enable Puertas Finas to: (i) install solar panels; (ii) replace older or obsolete equipment (such as incandescent lamps, motors, industrial dryers), with more energy efficient models in two of its plants located Oaxaca and Guerrero; and iii) change the varnishing system at the Puertas Finas Oaxaca Plant to reduce solvents in the workplace environment. Whilst the energy efficiency components have no adverse environmental and social risks or impacts, the change of varnishing system may potentially transfer pollutants (solvents in this case) from air to water. To mitigate this, the Puertas Finas II environmental and social action plan (ESAP) includes a requirement to recover and reuse the solvents as appropriate.

Mexico