Vladivostok, December 23, 2005—The
International Finance Corporation, the private sector arm of the World
Bank Group, has entered into an agreement to provide its first direct ruble
loan in Russia. IFC’s investment comprises a seven-year loan of approximately
255,000,000 rubles (€7.5 million equivalent) to Vladpivo, and a $5.3
million equity investment in Far East Brewing Company, Vladpivo’s parent.
IFC’s financing will support a $58 million investment program to acquire
the brewery; to revive, refurbish and upgrade its facilities; and to improve
the quality and consistency of its products. By 2008, the brewery is expected
to have an installed capacity of 1.8 million hectoliters and achieve annual
sales of 1 million hectoliters. The project will support the growth of
a productive enterprise and help reduce unemployment. Upon full implementation
of the project, the brewery will employ more than 500 staff.
By providing local currency financing, IFC is reducing the company’s foreign
exchange exposure. IFC is also exploring the possibility of using noncommercial
lending to help the company strengthen its occupational health and safety
This transaction reflects IFC’s strategy to increase its support for Russian
businesses that are willing to improve transparency and corporate governance.
“This is IFC’s first agribusiness project in the Russian Far East. We
hope that it will be a catalyst for further investments in this region
where such investment has lagged,” commented Jean-Paul Pinard, director
of IFC’s Agribusiness Department.
Nina Shapiro, IFC's Vice-President, Finance and Treasurer, said, “It is
important for IFC to structure long-term local currency solutions for clients.
We are pleased to work with the swap market to provide these ruble loans
and thereby help deepen the local financial market and extend maturities.”
IFC is partnering with two of its existing clients, Detroit Investments
and A-1 Group Limited, an affiliate of the Alfa Group, to invest in the
revival and modernization of the Vladpivo brewery, which is located in
Trudovoye, near Vladivostok.
The mission of IFC is to promote sustainable private sector investment
in developing and transition 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 FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of
FY05 was $19.3 billion for its own account and $5.3 billion held for participants
in loan syndications. For more information, visit www.ifc.org.
Russia joined IFC in 1993. Since then IFC has invested $2.4 billion in
the country, including $246 million in syndicated loans, in over 100 projects
across a variety of sectors. In FY05 (July 2004–June 2005), IFC’s investments
in the country reached $832 million. IFC’s investment portfolio in Russia
currently stands at $1.7 billion, making it the largest country exposure
for IFC globally. IFC has invested in key sectors, including banking, leasing,
housing finance, infrastructure, mining, agribusiness, pulp and paper,
construction materials, oil and gas, telecommunications, information technologies,
retail, and health care. For more information, visit www.ifc.org/europe.