IFC Supports Rehabilitation of Bosnian Chemicals Company to Revitalize Local Economy
Washington, D.C.
Hannfried von Hindenburg
Phone: +1 (202) 458-5613
Email: hvonhindenburg@ifc.org
Lukavac, Bosnia, March 20, 2007 —
IFC, the private sector arm of the World Bank Group, has agreed to support
the post-war rehabilitation and expansion of a soda ash plant in Bosnia
and Herzegovina to invigorate the local economy. IFC’s €24 million loan
to Sisecam Soda Lukavac will be used to fund a comprehensive turnaround
program designed to return the firm to profitability and full capacity.
The funds also support an environmental improvement program.
Revitalizing SSL’s soda ash operations
in Bosnia’s Tuzla Canton will boost the economy, as the plant is the largest
customer of local limestone and salt mines. Limestone and salt are key
ingredients for production of soda ash, which is used in the manufacturing
of glass containers, fiberglass insulation, and flat glass for the housing
and automotive industries.
After a recent privatization, SSL is
majority-owned by Turkey-based Sisecam Group, an IFC client with significant
investments in Bulgaria and Georgia as well as Turkey. IFC’s support for
the group is part of an effort to foster South-South investments, in which
leading emerging market companies expand into other emerging markets.
“This transaction underscores our long-standing
relationship with IFC and our shared commitment to invest in emerging markets,”
said Dogan Arikan, President and Chief Executive Officer of Sisecam Group.
“We hope to make this transaction a success story for the development
of a globally competitive regional industry.”
IFC’s loan is expected to help increase
confidence in Bosnia’s privatization program, improve SSL’s environmental
performance, and support development of the Tuzla Canton’s limestone and
salt companies.
“The successful privatization and turnaround
of SSL demonstrates interest in Bosnia and Herzegovina from international
private investors,” said Shahbaz Mavaddat, IFC’s Director for Southern
Europe and Central Asia. “We hope that the business environment will continue
to become increasingly conducive to such investments.”
Lance Crist, Manager of IFC’s Chemicals
Division, added: “Bosnia and Herzegovina’s abundant limestone and coal
resources provide SSL with a natural competitive advantage for becoming
a strong regional player in the soda ash industry, an advantage the company
can now capitalize on.”
About IFC
IFC, the private sector arm of the World
Bank Group, promotes open and competitive markets in developing countries.
IFC supports sustainable private sector companies and other partners
in generating productive jobs and delivering basic services, so that people
have opportunities to escape poverty and improve their lives. Through FY06,
IFC Financial Products has committed more than $56 billion in funding for
private sector investments and mobilized an additional $25 billion in syndications
for 3,531 companies in 140 developing countries. IFC Advisory Services
and donor partners have provided more than $1 billion in program support
to build small enterprises, to accelerate private participation in infrastructure,
to improve the business enabling environment, to increase access to finance,
and to strengthen environmental and social sustainability. For more information,
please visit www.ifc.org.
Bosnia and Herzegovina became a member
and shareholder of IFC in 1996. Since then, IFC has invested more
than $250 million in the country, including $11 million in syndicated loans,
to finance over 21 projects across a variety of sectors. In FY06,
IFC’s investments reached $34 million. IFC’s committed portfolio
in Bosnia currently stands at $170 million. IFC has invested in key
sectors including banking, general manufacturing, and chemicals. For
more information, visit www.ifc.org/seca.
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