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| Energomera |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 27626 |
| Company name | ZAO Monocrystal |
| Country |
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| Sector | Electrical Machinery, Equipment and Components (Electric Lighting, Motors, Batteries, Insulated Wires and Cables, Fiber Optic Cable, Carbon and Graphite Products, etc.) |
| Environmental category | B |
| Department | Reg Manufact, Agri & Services, EMENA |
| Status | Active |
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| Date SPI disclosed | May 27, 2009 |
| Projected board date | June 29, 2009 |
| Previous Events | Invested: February 4, 2010
Signed: December 23, 2009
Approved: December 22, 2009 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| Established in 1996, Monocrystal is one of the world’s largest producers of synthetic single crystal sapphire, aluminum and silver composite pastes for solar power generation, as well as other electronic materials for such industries as production of semiconductors, optics and photovoltaics. Monocrystal exports over 90 percent of its output to more than twenty countries worldwide. After its purchase of PKF Atlas (“Atlas”) in 2008, Monocrystal ranked among the four largest synthetic sapphire producers by revenues globally. Monocrystal has approached IFC to finance a portion of its medium-term modernization program and working capital needs. |
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| Project sponsor and major shareholders of project company |
| Monocrystal is 100% owned by Concern Energomera (“Energomera” or “Concern’). Established in 1994, Energomera is the leading manufacturer of electricity meters in Russia. Concern also owns Pobeda, an agriculture company that produces grains in the Stavropol region and Pyatigorskselmash, a manufacturer of equipment for poultry production. |
| Total project cost and amount and nature of IFC's investment |
| The proposed project cost is $20 million, as identified by IFC and Energomera, and will be used for three main purposes: $10 million for Monocrystal to refinance part of its existing debt, $5 million for new investments, and $5 million for working capital needs. The proposed IFC financing consists of long-term funding of up to $10 million. |
| Location of project and description of site |
| Monocrystal is headquartered in Stavropol, Russia, located 1,400 kilometers south of Moscow. Its core manufacturing facilities are located in Stavropol, a frontier region in southern Russia. Through its acquisition of Atlas, Monocrystal also has a facility in Belgorod in southwest Russia. |
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| Anticipated development impact of the project |
The proposed investment will have the following positive development impacts:
Employment: The investment will support one of the largest employers in Stavropol, a frontier region in Russia with per capita GDP equal to 42% of the national average. Monocrystal is the only significant high-tech employer in the region, where employment opportunities are generally limited to seasonal agricultural jobs and a few industrial companies.
Contribution to energy efficiency and renewable energy: Monocrystal’s main product, synthetic single crystal sapphire, is used in LED lighting, a highly energy efficient source of illumination. Aluminum composite paste, Monocrystal’s other main product, is used in the production of solar cells. This investment will support the local development and production of materials that are key components of higher energy efficiency and renewable energy products.
Export earnings: The investment will support one of the largest exporters in the Stavropol region. |
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| IFC's expected development contribution |
IFC’s additionality in this project includes:
Corporate governance and accounting standards: The IFC team had advised Energomera to simplify its corporate structure and encouraged it to prepare its financial statements according to IFRS. Concern has been following the action plan developed jointly with IFC and has already secured IFRS audited financials for 2006 and 2007.
Long-tenor financing: IFC will improve Monocrystal’s balance sheet structure by funding its planned investments with long-tenor financing, which is not readily available to mid-sized Russian companies, especially given the current credit market conditions in the country.
Energy efficiency: IFC will support Energomera’s efforts in increasing energy efficiency at the production facilities by providing advice on optimizing energy supply system, which will decrease operating costs for the company and lead to a reduction in its carbon emissions. |
| Environmental and social issues - Category B |
The project is a category B investment according to IFC’s Environmental and Social Review Procedure. A summary of IFC’s environmental and social review findings for the project including the rationale for the B categorization is publicly available in the Environmental and Social Review Summary.
Measures to mitigate potential risks and impacts identified during the appraisal are publicly available in the Environmental and Social Action Plan |
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| For inquiries about the project, contact: |
Concern Energomera
Marina N. Kulakova, Director Corporate Governance & Asset Management
415 Lenin Street, Stavropol, 355029,
RUSSIA
Tel.: +7 (8652) 562521
Fax: +7 (8652) 356740
E-mail: ir@energomera.ru |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
| The project does not involve any new construction and, therefore, no environmental impact assessment was carried out for this project. Company’s Action Plan based on the ESAP agreed between Monocrystal and IFC will be published in Russian on the corporate web-site of Energomera at www.energomera.ru |
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