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IFC Provides US$12 Million to Leading it Group in Russia

Moscow, September 19, 2002 —The International Finance Corporation (IFC), the private sector development arm of the World Bank Group, provided a US$12 million convertible loan to Information Business Systems (IBS), the largest information technology (IT) group in Russia, to support the financial restructuring and expansion plans of the group.
IBS is the largest IT services provider in Russia, and operates the largest offshore software development company in the country under the brand Luxoft.  It is also the largest distributor of foreign brand computer equipment, and the exclusive distributor of Dell Computer products in Russia.
IFC’s investment will help increase the availability of information technology products and services in the Russian market, helping fulfill the high demand for IT services within corporations and government agencies.  Improved access to IT products and services will allow Russian companies to compete more effectively in the international marketplace and increase the efficiency of government agencies.  IFC’s long term financing will also support the potential creation of hundreds of IT-related jobs in Russia by training skilled technology workers.
“With this investment, IFC is looking to support the development of a strong and efficient information infrastructure and IT services in Russia, which are essential to economic growth and modernization of business firms,” said Mohsen Khalil, IFC’s Director of the Global Information and Communication Technologies Department.: “This operation will also send a positive message to potential investors about the attractive investment opportunities the IT sector in Russia offers,” Mr. Khalil added.
”We welcome IFC’s commitment as it demonstrates that Russian companies can attract funding if they are attractive businesses and adhere to sound corporate governance and practices,” said Anatoly Karachinsky, IBS’ President & CEO.  “In addition to their deep understanding of both global technology issues and the overall Russian market, IFC provided long-term financing on more attractive terms than anything else available in market,” Mr. Karachinsky added.
IFC has worked actively to support the development of a strong private sector in Russia since it became a member in 1993.  IFC has invested over $136 million in equity and provided loans totaling $448 million to the private sector in Russia, as well as mobilizing $110 million from other sources of financing.
IFC’s mission 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 $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries.  IFC’s committed portfolio at the end of FY02 was $15.1 billion.