IFC Signs $75 Million B-Loan for Lukoil Karachaganak with Commercial Banks
Jan Van Bilsen
Phone: (202) 473-9056
Fax: (202) 974-4387
E-mail: jvanbilsen@ifc.org
Washington D.C., January 31, 2003—Commercial
banks have joined the International Finance Corporation (IFC), the private
sector development arm of the World Bank Group, in its loan agreements
with Russia’s premier oil company, Lukoil. IFC had launched a syndicated
loan in November after having signed loan agreements with Lukoil on October
30, 2002, to participate in one of the most significant projects in Kazakhstan’s
oil and gas sector. This multibillion dollar projectone of three large-scale
oil field developments in the country and the first syndicated oil and
gas transaction involving long-term tenors—includes development of the
world-class Karachaganak oil, gas, and condensate field. It also includes
a 635-km connecting pipeline from the oil field to the Caspian Pipeline
Consortium (CPC), which will transport the oil through Kazakhstan and Russia
to the Black Sea. When completed in early 2004, the project will form a
key part of Kazakhstan’s total oil and gas exports.
“We are very pleased to be associated with a project of such importance
to Kazakhstan, and one which will contribute to the country’s efforts
to increase its oil and gas production,” said Mr. Rashad Kaldany, IFC
Director for Oil, Gas, Mining, and Chemicals.
IFC’s US$150 million financing package to Lukoil Overseas Karachaganak
B.V. (Lukoil B.V.) will support the company’s share of development costs
and consists of a $50 million A-loan for IFC’s account; a $75 million
B-loan for the account of commercial banks; and a $25 million subordinated
C- loan, also for IFC’s account. IFC, as the sole arranger and syndicator
of the B-loan, has broken new ground by bringing in international commercial
banks for a long-term financing in Kazakhstan under IFC’s umbrella. All
banks invited for the syndication signed up today. These banks are ABN-AMRO
Bank N.V., Bayerische Hypo- und Vereinsbank Aktiengesellschaft, Crédit
Lyonnais, ING Bank N.V., Natexis Banques Populaires, RZB-Austria, SG Investment
Banking, and WestLB AG.
Mr. Khosrow Zamani, IFC Director for Southern Europe and Central Asia,
noted, “The Karachaganak project is a demonstration of IFC’s commitment
to promote sustainable development.”
Lukoil B.V. is a whollyowned subsidiary of Russia’s Lukoil, which has
a 15 percent shareholding in the Karachaganak field development. The project
is being jointly developed by BG of the United Kingdom (32.5 percent),
ENI-Agip group of Italy (32.5 percent), ChevronTexaco of the United States
(20 percent), and Lukoil.
IFC has worked actively to support the development of a strong private
sector in Kazakhstan since it became a member of the Corporation in 1993.
IFC has approved investments for its own account of over $400 million as
well as over $270 million from other sources of financing.
IFC’s mission 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
through FY02, IFC has committed more than $34 billion of its own funds
and arranged $21 billion in syndications for 2,825 companies in 140 developing
countries. IFC's worldwide committed portfolio as of FY02 was $15.1
billion for its own account and $6.5 billion held for participants in loan
syndications.
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