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IFC Invests in Leading Information Technology Holding Company in Russia

Moscow/Washington, DC, May 15, 2003 .— The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has invested US$6 million in ru-Net Holdings, a leading information technology (IT) investment company in Russia, to support the accelerated expansion plans of the group.
IFC's investment will help increase the availability of information technology products and services in the Russian market, helping fulfill the high demand for IT services within corporations and government agencies.  
IFC led this US$10 million Series B round of financing for ru-Net, which includes participation from Intel Capital and existing institutional investors.  ru-Net marks the first venture investment Intel Capital has made in the Russian technology sector.
ru-Net Holdings  owns TopS Business Integrator, one of the largest full-service IT companies in the Russian market that offers system integration, ERP solutions, consulting, and training services.  ru-Net also has a stake in the Russian Internet portal market leader, Yandex, which has the largest reach of any Russian language Internet site, as well as in Vested Development Inc., a top software development outsourcer.  
"The ru-Net group - one of the leading IT companies in Russia’s fledgling technology sector  - is an excellent example of the kind of company that Russia will rely on to develop its information and communications technology sector," said Mohsen Khalil, IFC's Director of the Global Information and Communication Technologies Department.  "We are also excited to co-invest with Intel Capital in their first venture investment in a Russian technology firm.  The entrance of western venture capitalists benefits the economic development of the overall Russian technology sector," Mr. Khalil added.
Today, IFC is widely recognized as one of the leading investors in the Russian information technology sector.  Including this investment in ru-Net, IFC has made three investments in Russian technology companies for a total of US$19.5 million in the last twelve months.  In June 2002, IFC committed to a US$1.5 million investment in Egar Technology, a software product company with operations in Moscow.  In August 2002, IFC committed to a US$12 million investment in IBS, Russia’s largest IT company.
"We are very happy to welcome a distinguished investor like IFC to our investor group," said Leonid Boguslavsky, ru-Net Executive Chairman.  "IFC’s investment will strengthen ru-Net’s ability to grow rapidly and add new product and service lines, while remaining highly competitive in the Russian marketplace" Mr. Boguslavsky added.
ru-Net Holdings ( ) was founded in January 2000 with $20.5 million in initial capital from Russian and Western investors, including Moscow based Baring Vostok Capital Partners and US based venture capital firm Rex Capital.  In addition to Tops Business Integrator, Yandex, and VDI, ru-Net was also responsible for growing e-commerce business to become the leading entertainment media e-retailer amongst the Russian speaking Internet audience globally.
IFC has worked actively to support the development of a strong private sector in Russia since it became a member in 1993.  IFC has invested over $136 million in equity and provided loans totaling $448 million to the private sector in Russia, as well as mobilizing $110 million from other sources of financing.
The World Bank Group's Global Information and Communication Technologies Department ( ) promotes the transfer of communications and information technologies to the developing world. The Information Technologies Investments Group, part of GICT, is a stage-independent investor with an exclusive focus on building successful information technology businesses in the emerging markets. Formed in mid-2000, the group brings a global perspective to information technology, a long-term approach to investments, an ability to leverage the resources of the entire World Bank Group as well as a commitment to maximize the value of its portfolio companies through sustained strategic assistance.
IFC's mission ( ) is to promote sustainable private sector investment in developing countries and transition economies, helping to reduce poverty and improve people's lives.  IFC finances private sector investments in the emerging markets, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses.  Since its founding in 1956, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's committed portfolio at the end of FY02 was $15.1 billion.
Intel Capital , Intel’s strategic investment program, focuses on making equity investments and acquisitions to grow the Internet economy in support of Intel’s strategic interests.  Intel Capital invests in hardware, software, and services companies in several market segments, including computing, networking, and wireless communications.  For more information, visit