IFC Supports Modernization of Steel Industry in Ukraine
IFC Kyiv:
Larissa Shidlovskaya
Tel.: +380 44 490 6400
E-mail: lshidlovskaya@ifc.org
IFC Washington:
Irina Likhachova
Tel.: +1 202 473 1813
E-mail: ilikhachova@ifc.org
Kyiv, Ukraine, February 11, 2008 — IFC,
a member of the World Bank Group, is providing financing to Ukraine’s
Industrial Union of Donbass as part of an ongoing effort to modernize the
country’s steel industry. The company is a leading steel producer,
with subsidiaries in Hungary and Poland as well as Ukraine.
IFC’s $350 million long-term financing package follows an earlier investment
in the company. The package consists of a $100 million loan for IFC’s
own account and a $250 million syndicated loan to be raised from leading
international banks. ABN AMRO and Société Générale Corporate and Investment
Banking are acting as coordinating mandated lead arrangers and bookrunners
of the syndication.
This financing will help modernize operations at the company’s two iron
and steel plants, Alchevsk Iron and Steel and Dneprovsky Iron and Steel,
which are both over 100 years old, and at a coke plant, Alchevsk Coke.
IFC’s support will help increase the company’s competitive advantage,
expand its range of steel grades, and improve environmental performance.
“We have had successful experience in working with IFC as a long-term
lender. This helped us implement a previous capital investment program,
which boosted both our company’s performance and the competitiveness of
a key sector of Ukraine’s economy. IFC’s new financing will allow us
to continue replacing old, polluting, and inefficient steel facilities
with the latest production technologies. This will improve quality and
widen our range of products, while helping us invest in further environmental
improvements,” said Sergiy Taruta, Chairman of the Board of Directors
of the Industrial Union of Donbass.
The company’s modernization program will
lower costs and significantly reduce emissions of particulates and carbon
dioxide. It will generate substantial economic benefits in the towns of
Alchevsk and Dneprodzerzhinsk, where the company’s plants employ about
40,000 people. The company’s investments will create about 5,000
new indirect jobs in related sectors, including construction, extractive
industries, engineering, transportation, and services.
“IFC is pleased to strengthen and develop our partnership with the Industrial
Union of Donbass. The company has demonstrated a strong commitment to reducing
air and water emissions from its Ukrainian facilities and to improving
conditions for the surrounding communities by implementing modern technologies
and best environmental practices. IFC is supporting a local industry leader
that is strengthening its position as a regional player in the industry,”
said Dimitris Tsitsiragos, IFC Director for Global Manufacturing and Services.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth
in developing countries by financing private sector investment, mobilizing
private capital in local and international financial markets, and providing
advisory and risk mitigation services to businesses and governments. IFC's
vision is that people should have the opportunity to escape poverty and
improve their lives. In FY07, IFC committed $8.2 billion and mobilized
an additional $3.9 billion through syndications and structured finance
for 299 investments in 69 developing countries. IFC also provided advisory
services in 97 countries. For more information, visit www.ifc.org.
Ukraine became a shareholder and a member of IFC in 1993. As of December
31, 2007, IFC has invested $786 million in 37 projects in the country.
IFC’s investment program is expanding rapidly, with a focus on Ukraine’s
financial, agribusiness, construction materials, retail trade and services,
energy, and infrastructure sectors. IFC also offers advisory programs
in Ukraine on leasing, agribusiness, mortgage finance, and improving the
business environment. For more information, please visit www.ifc.org/ukraine.
About Industrial Union of Donbass (ISD)
Corporation Industrial Union of Donbass was founded in 1995. It’s a vertically
integrated holding company with managing or ownership stakes in a number
of businesses in mining and steel industry.
ISD’s main assets include: Alchevsk Iron
and Steel plant, Alchevsk Coke Plant and Dneprovsky Iron and Steel plant
named after Dzerzhinsky, as well as ISD-Dunaferr steel plant in Hungary
and ISD-Huta Czestochowa in Poland.
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