Minsk, June 17, 2005 —
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, signed an agreement to provide a six-year $5 million loan to Joint Belarussian-Russian JSC “Belgazprombank” for on-lending to private enterprises. Belgazprombank is the second largest privately-owned commercial bank in Belarus.
The IFC loan will give Belgazprombank access to long-term funding which is not available in the market from other sources and will help the bank meet the increasing demand for term finance from its SME clients. IFC’s funding will help the bank implement its expansion strategy and strengthen its position in all market segments in which it currently operates, with a particular focus on private small and micro enterprises. “The agreement signed between Belgazprombank and IFC is a very positive sign, that reaffirms Belgazprombank’s leading role in the Belarusian financial markets. This investment opens additional opportunities for the bank and our clients,” said Mr. Victor Babariko, the Chairman of Belgazprombank’s Board.
IFC’s strategy in Belarus is to foster the private sector development through advisory services and lending operations. IFC’s loan to Belgazprombank is a way for IFC to reach a larger number of private companies in Belarus and to strengthen the country’s financial system. “IFC welcomes the opportunity to provide Belgazprombank with long-term funding to help the bank diversify and expand its loan portfolio. We hope that this investment will lay a solid foundation for our future long-term work together and promote the development of the small business sector, which is key for economic growth and stability,” commented Mr. Edward Nassim, IFC’s director for Central Eastern Europe, at the signing ceremony in Minsk.
Belgazprombank was established in 1989 as Bank Ekorazvitiye by a group of private shareholders. It was renamed as Bank Olimp in 1993 and later, in 1997, as Belgazprombank following the purchase of a majority stake (67.8%) by the Gazprom Group. As of December 2004, the Bank’s assets are $100 and equity $18 million . Belgazprombank benefited from EBRD’s Institution Building Plan and Technical Assistance program that focused on strengthening the bank’s lending operations. This year, with donor support from the Swedish International Development Agency (SIDA), IFC will also provide consulting services to the bank on its general strategy and planning and also on specific technical areas such as managing treasury risk and asset-liability. “This is a good example for adding value to the Bank by combining a long term investment with advisory services . Having high quality risk management practices is an important success factor for the bank and we are grateful to Sida for the support.” added Jyrki Koskelo, IFC’s Director for Global Financial Markets.
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 FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
