Moscow, March 24, 2004
—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, signed an agreement today to provide a $40 million eight year loan to three Russian transportation companies, ZAO Severstaltrans, OOO Balttransservice and OOO Sevtechnotrans, to help them expand their fleet of tank cars and acquire locomotives. The three companies are part of the Severstaltrans Group which is one of the largest private transportation groups in Russia.
Apart from providing a much needed long-term financing to these three companies, IFC’s investment will have a broader impact of helping to attract long-term investment to the privately owned and operated Russian railway companies.
Francisco Tourreilles, IFC’s Director of Infrastructure Department, commented: “IFC’s financing to an experienced Russian transportation company will support private sector participation in the Russian railroad sector that will be critical in helping to alleviate potential bottlenecks in the country’s transportation system and to promote economic and export growth in Russia.”
Edward Nassim, IFC’s Director for Central and Eastern Europe, noted: “By supporting a private Russian transportation company, this investment will help to facilitate ongoing sector reform program, which separates government regulatory functions and rail infrastructure from commercial operations.”
Konstantin Nikolaev, General Director of Severstaltrans, pointed out the importance of having IFC as a partner for realization of a company’s rolling stock development program. “This financing will allow us to strengthen our market position, including oil and petroleum transportation, and to provide better service to our clients, which is our primary objective.”
Background Information
Severstaltrans
. Russian freight-forwarding company established in 1996. The company offers a full range of transportation and goods handling services: international and domestic transportation by rail, sea, river and trucks; rail transportation by the private rolling stock; cargo transshipment in the ports of Russia, CIS and Baltic countries; bulk-oil transportation by the private rolling stock; transportation of metal, raw materials, bulk-oil and other kinds of cargo; container transportation; multimodal transportation services; total logistics; consulting services.
International Finance Corporation
. Russia joined IFC in 1993. Since then IFC has approved investments worth $2.3 billion to finance nearly 90 projects across a variety of sectors. IFC significantly increased its investment program in Russia in the last fiscal year (July 2002 – June 2003), approving nearly $700 million of investments. IFC's increased activity reflects the improving investment climate in Russia, greater opportunities in an increasingly broad range of sectors, and stronger foreign investor interest.
The mission of IFC (
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, 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 FY03 was $16.7 billion for its own account and $6.6 billion held for participants in loan syndications.
