The EBRD and IFC have provided a US$18 million (€17 million) loan to Ambro S.A., the largest private Romanian pulp and paper mill owned by Sical, an international packaging group based in France.
The project, with a total cost of US$68 million (€64.7 million), will enable the company to modernise its pulp and paper production facilities and to improve environmental conditions at the plant in northern Romania. The project should double capacity and increase efficiency, allowing Ambro to meet the growing domestic demand for kraft paper and sacks and to increase its export sales to neighboring countries.
Harold Rosen, IFC's Director for Central and Southern Europe, said the investment would support one of Romania's key resource-based industries by making the company more competitive and setting new industry environmental standards for the region.
Olivier Descamps, the EBRD's Business Group Director for Southern and Eastern Europe and the Caucasus, said: "the project promotes the transition process in Romania by supporting private ownership and developing management know-how and new technology through the involvement of an international strategic investor".
Daniel Forget, Sical's Chief Executive Officer, said: "The financing from EBRD and the IFC is an important milestone for Ambro's growth and for Sical group's strategy in Central and Eastern Europe".
Ambro S.A. is a large integrated pulp and paper mill, producing kraft paper, corrugated board packaging and sacks, strategically located in Suceava, in the forested area of northern Romania. Sical, which is quoted on the Paris stock exchange, acquired Ambro as part of the first wave of privatisation in Romania in 1996 and has implemented an investment plan to increase capacity and quality of production.
The EBRD was established in 1991 following the collapse of communism, to aid the transition from centrally-planned to market economies in central and eastern Europe and the Commonwealth of Independent States (CIS). The EBRD is owned by 60 shareholders: 58 countries, the European Investment Bank, and the European Community, and operates with €20 billion in authorized capital. Since its inception, the EBRD has committed more than €1.3 billion to Romania, about 10 percent of the Bank's total portfolio of commitments. To date, the Bank has approved five projects in the pulp and paper sector.
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. Since its first investment in Romania in 1992, IFC has approved US$300 million in investments in 14 projects in Romania's manufacturing, services and banking sectors.
