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| This Summary of Project Information 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. |
Summary of Project Information (SPI) |
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| Project number | 11211 |
| Project name | Eesti Raudtee and Baltic Railway Services |
| Country | Estonia |
| Sector | Transportation And Warehousing |
| Department | Infrastructure |
| Company name | AS Eesti Raudtee |
| Environmental category | B |
| Date SPI disclosed | October 9, 2001 |
| Projected board date | November 8, 2001 |
| Status | Completed |
| Previous Events | Invested: February 22, 2002
Signed: December 18, 2001
Approved: November 15, 2001 |
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| Project sponsor and major shareholders of project company |
| AS Eesti Raudtee (EVR, the company) is owned by Baltic Railway Services OU (66%) and the government of Estonia (34%). Baltic Railway Services OU in turn is a company jointly owned by Rail World Estonia, LLC, a subsidiary of Rail World Inc. of the USA (25.5%), Jarvis International plc of the UK (25.5%), Railworld Development Corporation of the USA (5%) and Ganiger Invest OU of Estonia (44%). |
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| Total project cost and proposed IFC investment |
| Total project cost is estimated at US$226.8 million. The proposed IFC investment would consist of a US$50 million loan to EVR for IFC's own account. |
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| Location of project and description of site |
| The headquarters of EVR are located in Tallinn, Estonia. |
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| Description of company and purpose of project |
In 1999, the government of Estonia decided to privatize the state railway company AS Eestii Raudtee through the sale of 66% of the shares through public auction. Within three years of the share sale, all the land occupied by the company will be re-registered to grant 50-year leases of the land to EVR. Baltic Railway Services won the bid and purchased 66% of EVR’s shares on August 31, 2001.
EVR is a vertically integrated railway which includes the management of fixed infrastructure (track, bridges, stations, signaling and communications, etc.) and operation of freight transport services. EVR is the dominant freight operator in Estonia and operates a 693 km long railway network in Estonia. The principal route consists of the main 210 km west-east axis from Tallinn to the Russian border at Narva. The first 77.5 km are double track as far as Tapa where a second route branches off towards Tartu in the south. At Tartu, the line further divides into a route into Russia via Petseri and also to Latvia via Valga. According to EU rules, Estonia has separated the operation of trains and ownership of rail infrastructure. As the owner of the railway network EVR is required to maintain the network and provide network access to the various licensed passenger operators and freight operators in return for a track access charge.
The IFC project comprises: (i) the company’s investment plan over the next five years including the replacement of EVR’s locomotive fleet, track replacement and renovation, improvement of signaling and communications, station renewals and investments in environmental protection; and (ii) the acquisition of 66% of EVR’s shares by BRS. Total IFC project cost is estimated at US$226.8 million.
The railway sector plays an important economic role in Estonia by transporting large amounts of oil products, oil shale, and other bulk commodities that constitute a substantial part of transit traffic through Estonia. This role is enhanced by helping in the strategic regional development of the port of Tallinn. |
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| Environmental and social issues - Category B |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects, because a limited number of specific environmental and/or social impacts may result which, can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.
To view the environmental documents for this project, click here
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| Location of environmental documents in locally affected community |
The environmental documents will be available at EVR’s offices in Tallinn
The address is:
AS Eesti Raudtee, 36 Pikk Street, 15073 Tallinn, Estonia |
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| To contact the project company, please write to: |
Edward Burkhardt, President
Rail World Inc.
8600 W. Bryn Mawr Avenue, Suite 500N
Chicago, Illinois 60631, USA |
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