WASHINGTON, D.C., October 17, 2003
The International Finance Corporation (IFC), the private sector arm of the World Bank group, will invest US$22 million equivalent to support the refurbishment and modernization of Stomana Industry AD. Stomana Industry is the major employer in the Pernik industrial region of Bulgaria, and the second largest steel producer in the country.
The IFC loan will complement additional investments in Stomana Industry by Sidenor, the leading producer and marketer of steel products in Greece. Sidenor is a part of the Viohalco Group, the largest metal processing group in Greece and an existing IFC client.
As part of the investment program, Sidenor will refurbish the plant, facilitate the transition to a wider range and higher value added products, and improve production methods and environmental performance. About $15 million of the total investment, estimated at $94 million, including working capital, will be dedicated to environmental improvements. Reducing environmental impacts will help establish a higher standard of performance for the steel industry in Bulgaria.
Assaad Jabre, Vice President Operations of IFC signed the agreement to provide IFC’s funds. During the signing, Mr. Jabre noted: “Promotion of a competitive private sector led growth is one of the main focuses of the World Bank Group in its effort to reduce poverty and facilitate Bulgaria’s move towards EU accession. By supporting this project, IFC supports Bulgaria’s privatization efforts by financing a post-privatization restructuring in a sector that has strategic importance for the country’s economy”.
Khosrow Zamani, Director Southern Europe Central Asia Department at IFC added that over the long term, the modernization project of the Stomana steel mill is expected to serve as a model for further private sector development in Bulgaria by providing an example of the successful application of modern management methods, the attraction of first-class industry sponsors, and promotion of best practices in corporate governance. The project is also designed to meet the stringent environmental and social standards of the World Bank group.
To date, IFC has approved around $213 million in investments in 16 projects in Bulgaria, with a total cost of $1.1 billion.
The mission of IFC 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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $16.7 billion for its own account and $6.6 billion held for participants in loan syndications.