Washington DC, June 3, 2002
– The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will provide a US$10 million senior loan to JSC Okean, one of the largest shipyards in Ukraine, to support the shipyard’s modernization efforts. A parallel loan of US$7 million is provided by Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V (FMO) from The Netherlands.
The IFC and FMO financing will support an effort to modernize JSC Okean, reviving the shipyard to its previous status as one of the leading shipyards of Eastern Europe during the 1980’s and early 1990’s. Specifically, the investment will provide much-needed long-term funds for investments in technology that will improve the shipyard’s efficiency and output, and will increase working capital while reducing short-term debts. This investment marks IFC’s first in Ukraine’s manufacturing sector.
After the collapse of the Soviet Union, difficulties with securing working capital financing led to a major decrease in efficiency, and eventually to almost a complete cease of operations at JSC Ocean, which is located in Mykolayiv on the Black Sea coast. Before its financial difficulties, the shipyard specialized in building large commercial cargo vessels, both for domestic and international markets.
In October 2000, Damen Shipyards Group N.V., a leading international shipbuilding company from the Netherlands, acquired a 78 percent ownership of JSC Okean, through privatization. The Damen Group consists of 19 shipbuilding and repair companies in the Netherlands, and 13 facilities abroad, including Poland and Romania.
“This investment is a signal of IFC’s commitment to developing Ukraine’s private sector,” said Mr. Edward Nassim, Director of IFC’s Central and Eastern Europe Department. “Damen has a strong business record and a thorough knowledge of the international shipbuilding industry, and Okean has good production facilities and a large, motivated workforce. We are confident that, with our financial support, Okean will strengthen its position as an efficient, internationally competitive and profitable business, operating along sound Western business practices.”
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.
