WASHINGTON, D.C., November 12, 1998 — The International Finance Corporation today signed an agreement with Celhart Pulp and Paper Mill to provide a US$13.9 million long-term loan and a $1.5 million investment in equity to renovate and modernize Celhart's production facility in Stambolijski, Bulgaria.
Celhart is the largest sack kraft paper producer in Bulgaria. In 1997, Isiklar Holding, one of Turkey's leading producers of construction materials and paper sacks, acquired a 59 percent stake in Celhart from several privatization funds. Isiklar recently increased its shareholding to 82 percent through additional purchases from the government. By producing up to 60,000 tons of kraft paper per year, the plant is expected to become Isiklar Packaging Group's principal source of sack paper for the wider European and Middle Eastern market.
IFC is investing in Celhart along with the European Bank for Reconstruction and Development. Isiklar Holding is financing the balance of the $44.6 million project cost.
Mr. Riza Isik, President and CEO of Isiklar Holding, Mr. Harold Rosen, IFC Director for Central and Southern European Operations, and Mr. Olivier DeChamps, EBRD Director for Europe signed the investment agreements today in Sofia. Mr. Rosen, who has been meeting with the Prime Minister of Bulgaria, other government officials and several business groups during his visit, said that Celhart's privatization and subsequent investments undertaken by the company's new Turkish owner are excellent examples of the benefits of direct foreign investment in the country. He said the project would improve production quality, increase export earnings and, most importantly, support Bulgaria's transition to a competitive market economy.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.