IFC Invests $50 Million in Estonia's Railway Sector
Adriana Gomez
Phone:(202)458-5204
Fax:(202) 974-4384
E-mail:agomez@ifc.org
Washington, D.C., December 20, 2001—The
International Finance Corporation (IFC), the private sector arm of the
World Bank Group, is investing up to US$50 million in AS Eesti Raudtee
(EVR), the newly privatized Estonian freight railway company, to help upgrade
and expand the country’s railroad system and its operations. About 75
percent of Estonia's freight traffic is transported on the railway system,
with major transit cargo from Russia.
In August 2001, the Government of Estonia sold 66 percent of the Company's
shares to Baltic Railway Services OÜ (BRS), a joint venture company owned
by Estonian investors as well as United States and UK railway operators.
EVR is the first railway privatized company in Eastern and Central
Europe. It is a vertically integrated railway which combines the management
of fixed infrastructure (track, bridges, stations, signaling, etc.) and
operation of freight transport services.
Declan Duff, IFC’s Director of the Infrastructure Department, said: “More
investment in railways is crucial for Estonia’s development as an important
trade center and transshipment point. This privatization enables the country
to take advantage of its strategic position." Mr. Duff added
that IFC's investment "will encourage future railway privatization
reforms in neighboring countries, which will bring more efficient cargo
and transport services to the region.”
Baltic Railway Services ( BRS) was founded by four different investor
groups: Rail World Inc.(USA) with 30.1 percent of BRS's shares; Jarvis
International (UK) with 30.1 percent of the shares; Railroad Development
Corporation (USA) with 5.9 percent of the shares and Ganiger Invest
OÜ (Estonia) with 34 percent of the shares.
IFC’s mission (www.ifc.org) is to promote sustainable private sector investment
in developing countries, helping to reduce poverty and improve people's
lives. IFC finances private sector investments in the developing
world, mobilizes capital in the international financial markets, and provides
technical assistance and advice to governments and businesses. Since its
founding in 1956, IFC has committed more than $31 billion of its own funds
and arranged $20 billion in syndications for 2,636 companies in 140 developing
countries. IFC's committed portfolio at the end of FY01 was $14.3
billion.
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