Washington, D.C., December 20, 2001
—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, is investing up to US$50 million in AS Eesti Raudtee (EVR), the newly privatized Estonian freight railway company, to help upgrade and expand the country’s railroad system and its operations. About 75 percent of Estonia's freight traffic is transported on the railway system, with major transit cargo from Russia.
In August 2001, the Government of Estonia sold 66 percent of the Company's shares to Baltic Railway Services OÜ (BRS), a joint venture company owned by Estonian investors as well as United States and UK railway operators. EVR is the first railway privatized company in Eastern and Central Europe. It is a vertically integrated railway which combines the management of fixed infrastructure (track, bridges, stations, signaling, etc.) and operation of freight transport services.
Declan Duff, IFC’s Director of the Infrastructure Department, said: “More investment in railways is crucial for Estonia’s development as an important trade center and transshipment point. This privatization enables the country to take advantage of its strategic position." Mr. Duff added that IFC's investment "will encourage future railway privatization reforms in neighboring countries, which will bring more efficient cargo and transport services to the region.”
Baltic Railway Services ( BRS) was founded by four different investor groups: Rail World Inc.(USA) with 30.1 percent of BRS's shares; Jarvis International (UK) with 30.1 percent of the shares; Railroad Development Corporation (USA) with 5.9 percent of the shares and Ganiger Invest OÜ (Estonia) with 34 percent of the shares.
IFC’s mission (www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to 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. Since its founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC's committed portfolio at the end of FY01 was $14.3 billion
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