|
| Description of company and purpose of project |
| The project consists of a subordinated loan of up to US$4 million and, at a later stage, an equity investment in Primsotsbank (“PSB” or the “Bank”), a medium-sized regional bank operating in the Russian Far East. IFC financing would support the Bank’s strategy and its further expansion. |
|
| Project sponsor and major shareholders of project company |
| The Bank is controlled by its senior management who own, directly and indirectly, 45.49% of the Bank. A local businessman holds another 19.84%. Other local companies own 32.05% of the Bank. The remaining 2.62% of shares are owned by employees and other shareholders. The Bank’s shareholding structure will be revised and simplified by end-2006. |
|
| Total project cost and proposed IFC investment |
| The project is to provide a US$4 million subordinated loan to the Bank to support its further growth and expansion. At a later stage, the subordinated loan might be converted into equity. |
|
| Location of project and description of site |
| PSB is headquartered in Vladivostok. In addition, the Bank has 13 outlets in the city of Vladivostok and throughout the Russian Far East. |
|
| Project Development Impact and IFC's Role |
IFC’s investment in PSB will have a strong developmental impact, as it will increase access to finance for SMEs and have a positive impact on financial sectors development in an underbanked region of the country. SMEs in Russia have few potential sources of credit, and most credit is only available for short tenors.
Furthermore, the Russian financial sector is under-developed and the country’s current macro-economic growth is not sustainable without a banking system which engages in true financial intermediation. In addition to developing banking services, this project is expected to create a demonstration model for existing banks, encouraging them to expand their private sector lending activities. |
|
| Environmental and social issues - Category FI-1 |
This is a category FI Type 1 project. The project would need to ensure that its investments are in compliance with the Environmental, Health Safety and Social requirements of the Russian Federation and establish and implement an Environmental Management System to the satisfaction of IFC to achieve this. The project is required to appoint an Environmental Manager and Environmental Coordinator, and to provide IFC an annual environmental performance report (AEPR) as per a format provided by IFC.
|
|
| To contact the project company, please write to: |
Olga Ivaschuk
Head of International Banking Department
Phone: +7 4232 –300299 Fax: +7 4232 – 422076
Email: olga@pskb.com
|
|