- It will further improve the competitiveness of a major steel producer in Ukraine. The project should enable ISD to produce better quality and value products for the domestic and export markets. ISD-Ukraine does not depend on tariffs, especially as it is export oriented.

- By implementing an action plan to meet IFC’s environmental guidelines, the project should have a substantial positive impact on the environment by decreasing the emissions, improving the use of gases and better recycling of dust emissions.

- Efforts by ISD, an industry leader, to improve transparency through having an international audit of its financial statements, will have far reaching effects on the business practices of the rest of the Ukrainian private sector, and the attitudes of foreign investors regarding Ukraine.

- Steel plants often have a huge impact on the local community by virtue of:

--the large number of people directly employed, normally between 10,000 and 60,000 per plant; and

--the historical dependence of nearby towns for services, especially in former Soviet Union and East Europe.

- AMK and DMK are important to the development of the economies where the plants are located as they are town-creating enterprises and employ a significant portion of the regions’ workforce. AMK and Alchevsk Coke’s combined staff is 25,300. AMK still supports some of the social infrastructure in the town of Alchevsk, with a population of about 190,000 people. DMK with 19,000 employees is also one of the key employers in its town which has a population of 300,000.

- Given IFC’s proven track record of helping other integrated steel plants in Eastern Europe and CIS countries bring their environmental performance up to international standards, ISD seeks IFC’s assistance in formulating and implementing a time bound, milestone specific, environmental action plan to do the same.

- IFC will provide long-term financing to ISD which otherwise is not available in Ukraine. Given the cyclicality and capital intensiveness of the industry, steel companies need long-term financing. Commercial banks are only willing to provide loans to ISD with maturity of up to three years, and often with complicated structures consisting of securitization of export receivables.

- IFC will attempt to mobilize additional financing through a B Loan syndication, attracting commercial bank financing in Ukraine with a longer tenor and encouraging the banks to take ISD’s credit risk, without any securitization of export receivables.

- ISD is interested in expanding its relationship with IFC. ISD is an important Ukrainian industry leader which has acquired production facilities in other Eastern European countries. In this context, ISD should be a strong partner for IFC when promoting South-South investments and supporting the expansion of the emerging markets companies becoming a global player.

- IFC would assist ISD in improving transparency and corporate governance practices. As a start, ISD has begun the process of preparing audited consolidated financial statements in accordance with the International Financial Reporting Standards.