Selected GMS Press Releases

IFC Kyiv
Larissa Shidlovskaya
Tel.: +380 44 490 6400
e-mail: lshidlovskaya@ifc.org

IUD Contacts in Kyiv
Serhiy M. Yelizarov
Tel.: .:+380 44 457 6861  
e-mail: syelizarov@c-ig.com

Valentine Smirnyagin
Tel.: + 380 50 444 1190  
e-mail: valentine.smirnyagin@gmail.com


Kyiv, Ukraine, June 27, 2006 — The International Finance Corporation, the private sector arm of the World Bank Group, provided a $100 million loan for its own account and will syndicate a $250 million loan underwritten by Société Générale and Citigroup to the Industrial Union of Donbass (IUD) to fund its Ukrainian operations.  IUD, a premier steel company with subsidiaries in Ukraine, Hungary and Poland, produced 9.2 million tons of crude steel in 2005, of which 6.6 million tons were produced by its Ukrainian operations.

IFC’s loan will help finance a $1.5 billion capital investment program to modernize IUD’s Ukrainian operations to enable the company to meet international level environmental standards, improve energy efficiency and reduce operating costs.  IFC helped IUD formulate a comprehensive time-bound Environmental Corrective Action Plan involving an investment of more than $600 million over the 2006 – 2009 period, which includes the closure of its open hearth furnaces. “With the support of IFC, the company’s capital investment program is designed to significantly reduce air and water emissions from its Ukrainian facilities and improve conditions for the surrounding communities,” said Edward Nassim, IFC’s vice president and director for Central and Eastern Europe.

Dimitris Tsitsiragos, IFC’s director for Global Manufacturing and Services Department commented, "IFC is supporting a local industry leader with an established South-South investment strategy and a strong commitment to improve its environmental practices.  IFC is providing long-term financing, currently unavailable in the country, and, through its syndicated loan, is extending the maturities of IUD’s commercial bank loans”.  Sergiy Taruta, Chairman of the Board of Directors of IUD, stated that “in 2005, the steel sector accounted for 36 percent of Ukrainian exports and for 25 percent of the country’s industrial production.  Hence, the $1.5 billion capital investment program should significantly improve not only IUD’s performance, but also the competitiveness of a key sector for Ukraine.”

About IFC

The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C.  IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent.  Its 178 member countries provide its share capital and collectively determine its policies.

The mission of IFC is to promote sustainable private sector investment in developing and transition 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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses.  From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications.

For more information, please visit www.ifc.org.

Ukraine became a shareholder and a member of IFC in 1993.  As of May 31, 2006, IFC has invested more than $505 million in 26 projects in Ukraine. IFC expanded its investment program in Ukraine significantly in 2004-2005, committing $255 million in the agribusiness, financial, and general manufacturing sectors. IFC has also been conducting an extensive advisory program since 1992, which initially focused on the privatization of small businesses, land, and idle construction sites. Current donor-funded programs offer advice on corporate governance, leasing, and agribusiness. IFC also seeks to improve the business environment and promote growth of small and medium enterprises.