Moscow, April 1, 2004
—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, signed an agreement today to provide $7.5 million in long-term debt and quasi-equity financing to two Russian warehousing and logistics companies, ZAO Kulon Development and ZAO Kulon Estate, for the construction of two world-class warehousing and office facilities with total rental space of over 40,000 m2 in the Moscow metropolitan area. The two companies are part of the Kulon Group which controls and operates a modern warehouse and office complex on the 8th of March street in Moscow.
The IFC investment is aimed at providing long-term financial support for the development and operation of much needed modern warehouse space for storage and logistics operations in the Moscow metropolitan area.
Francisco Tourreilles, IFC’s Director of Infrastructure Department, noted: “IFC’s financing of ZAO Kulon, an experienced local warehouse and logistics operator, will be the Corporation’s first investment in the logistics sector in Russia. Over the next five years, private investment in logistics companies will play a critical role in improving the efficiency of the wholesale and retail distribution systems in the country, and will thus help stimulate the continued growth of Russia’s export-import trade.”
Edward Nassim, IFC’s Director for Central and Eastern Europe, commented: “By supporting a private Russian warehousing company, this investment will contribute to the development of the country’s logistics infrastructure, introduction of advanced business practices and economic growth.”
Ivan Potekhin, representative of Kulon Development, pointed out the importance of having IFC as a partner for realization of the company’s construction program. “IFC’s financing will help us construct new top of the line warehousing and office facilities, which will strengthen our market position and increase availability of high quality logistics services to our clients.”
Background Information
ZAO Kulon
. Russian warehousing company established in 1998. The company develops and operates warehouse and office space in and around Moscow to a wide range of clients involved in wholesaling and retailing of consumer and specialty goods, provision of postal, archival and other services. Facilities of Kulon Development on Dorozhnaya street in Moscow are nearing commissioning. The Kulon Estate warehousing and logistics center near the Moscow Ring Motor Road on the Moscow-Riga Highway is scheduled for completion in March 2005.
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.
