MOSCOW, RUSSIA, October 18, 1999 —
The International Finance Corporation has signed an agreement to invest in Deutsche Leasing Vostok (DLV), a general equipment leasing company to be established in Russia. DLV will be the country's first joint venture leasing company with significant foreign ownership. It is also IFC's first leasing project in Russia.
IFC's financing consists of an equity investment of US$600,000, representing a 20 percent stake in the new company, and a loan of up to $3 million.
The project sponsor is Deutsche Sparkassen Leasing AG & Co. KG, Germany's largest independent leasing company and one of the top ten leasing companies in Europe.
The project will help develop the private sector in the Russian Federation through lease financing and related services to the agricultural, construction, energy, industrial, mining, and transport sectors. The project will provide critical medium-term financing for private enterprises at a time when few alternatives exist as a result of the Russian financial crisis.
The project evolved from IFC's extensive technical assistance efforts in the Russian leasing sector, beginning in 1997 with the creation of IFC's Leasing Development Group (LDG) in Moscow. IFC's on-going technical assistance work in the Russian leasing sector is supported by both the British Know-How Fund and the Canadian International Development Agency.
Mr. Edward Nassim, Director of IFC's Europe II Department, said that the investment in DLV will help to promote leasing as an effective and viable means of capital financing. IFC will continue to promote the growth of the leasing sector in Russia through its technical assistance program, he noted.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
