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Lviv, Ukraine, December 18
th
, 2007
— IFC, a member of the World Bank Group, is supporting the expansion of modern petrol station network in Ukraine and refurbishment of the country’s outdated petroleum distribution infrastructure. IFC is providing a $100 million long-term financing package to Galnaftogaz that consists of a $30 million direct loan, a $20 million subordinated loan, and $50 million in syndicated loans raised from leading international banks. This is IFC’s largest investment to date in the petrochemicals sector of the former Soviet Union. The syndication was co-organized by the European Bank for Reconstruction and Development, which is also providing $100 million in long-term financing to the company.
Galnaftogaz is Ukraine’s leading oil product distributor, operating 235 petrol stations under the OKKO brand throughout the country. The expansion program will increase the number of OKKO stations to 360 and create 600-1000 new jobs.
IFC has been a partner to Galnaftogaz both as a long-term lender and as an advisor. The relationship dates back to 2003, when Galnaftogaz participated in an IFC program to assess and improve its corporate governance. IFC also helped the company establish its corporate environment, health, and safety management systems and advised the company on its long-term strategy. Recognizing the company’s commitment to transparency and sound governance, IFC supported the company’s growth with a $25 million loan in 2005.
“IFC’s long-term funding and assistance in developing our corporate governance and environmental standards has been instrumental in helping us get where we are today. The new financing from IFC will help us reach the next level of growth, expand our activities throughout the country, and continue to deliver the highest-quality products and world-class service to our customers,” said Mr. Yuri Kuchabskiy, General Director of Galnaftogaz.
“IFC values its partnership with Galnaftogaz. The company has demonstrated strong commitment to transparency and to best environmental, health, and safety practices. We look forward to continuing our cooperation, which supports improvements in the country’s infrastructure and helps create permanent jobs for Ukrainians,” said Lance Crist, Senior Manager in IFC’s Oil, Gas, Mining, and Chemicals Department.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, please visit
www.ifc.org
Ukraine became a shareholder and a member of IFC in 1993. As of June 30, 2007, IFC has invested $742 million in 35 projects in Ukraine. IFC’s investment program is expanding rapidly with a focus on the country’s financial, agribusiness, construction materials, retail trade and services, energy, and infrastructure sectors. IFC also offers advisory programs in Ukraine on corporate governance, leasing, agribusiness, mortgage finance, and improving the business environment. For more information, please visit
www.ifc.org/ukraine
Information on Galnaftogaz
Galnaftogaz is an independent petroleum products distribution company based in western Ukraine. Galnaftogaz operates the third largest and one of the fastest growing networks of petrol filling stations under its OKKO brand. All OKKO-branded stations are built in a western format, comply with up-to-date technical and environmental specifications, and offer various related products and services through convenience stores and adjacent service sites. Currently, the Company operates 235 stations, primarily in western and central Ukraine. Besides petroleum retail, the Company also actively participates in the petroleum wholesale market and provides logistics services to other distribution companies.
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