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IFC Supports Modernization of Steel Industry in Ukraine


IFC Kyiv:
Larissa Shidlovskaya

Tel.: +380 44 490 6400

E-mail:
lshidlovskaya@ifc.org

IFC Washington:

Irina Likhachova
Tel.: +1 202 473 1813

E-mail:
ilikhachova@ifc.org


Kyiv, Ukraine, February 11, 2008 — IFC, a member of the World Bank Group, is providing financing to Ukraine’s Industrial Union of Donbass as part of an ongoing effort to modernize the country’s steel industry.  The company is a leading steel producer, with subsidiaries in Hungary and Poland as well as Ukraine.

IFC’s $350 million long-term financing package follows an earlier investment in the company. The package consists of a $100 million loan for IFC’s own account and a $250 million syndicated loan to be raised from leading international banks. ABN AMRO and Société Générale Corporate and Investment Banking are acting as coordinating mandated lead arrangers and bookrunners of the syndication.  

This financing will help modernize operations at the company’s two iron and steel plants, Alchevsk Iron and Steel and Dneprovsky Iron and Steel, which are both over 100 years old, and at a coke plant, Alchevsk Coke.  IFC’s support will help increase the company’s competitive advantage, expand its range of steel grades, and improve environmental performance.

“We have had successful experience in working with IFC as a long-term lender.  This helped us implement a previous capital investment program, which boosted both our company’s performance and the competitiveness of a key sector of Ukraine’s economy. IFC’s new financing will allow us to continue replacing old, polluting, and inefficient steel facilities with the latest production technologies. This will improve quality and widen our range of products, while helping us invest in further environmental improvements,” said Sergiy Taruta, Chairman of the Board of Directors of the Industrial Union of Donbass.

The company’s modernization program will lower costs and significantly reduce emissions of particulates and carbon dioxide. It will generate substantial economic benefits in the towns of Alchevsk and Dneprodzerzhinsk, where the company’s plants employ about 40,000 people.  The company’s investments will create about 5,000 new indirect jobs in related sectors, including construction, extractive industries, engineering, transportation, and services.

“IFC is pleased to strengthen and develop our partnership with the Industrial Union of Donbass. The company has demonstrated a strong commitment to reducing air and water emissions from its Ukrainian facilities and to improving conditions for the surrounding communities by implementing modern technologies and best environmental practices. IFC is supporting a local industry leader that is strengthening its position as a regional player in the industry,” said Dimitris Tsitsiragos, IFC Director for Global Manufacturing and Services.

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 people should 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 syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org.

Ukraine became a shareholder and a member of IFC in 1993. As of December 31, 2007, IFC has invested $786 million in 37 projects in the country. IFC’s investment program is expanding rapidly, with a focus on Ukraine’s financial, agribusiness, construction materials, retail trade and services, energy, and infrastructure sectors.  IFC also offers advisory programs in Ukraine on leasing, agribusiness, mortgage finance, and improving the business environment. For more information, please visit
www.ifc.org/ukraine.

About Industrial Union of Donbass (ISD)

Corporation Industrial Union of Donbass was founded in 1995. It’s a vertically integrated holding company with managing or ownership stakes in a number of businesses in mining and steel industry.

ISD’s main assets include: Alchevsk Iron and Steel plant, Alchevsk Coke Plant and Dneprovsky Iron and Steel plant named after Dzerzhinsky, as well as ISD-Dunaferr steel plant in Hungary and ISD-Huta Czestochowa in Poland.

ISD contacts in Kyiv:
Valentine Smirnyagin
Tel.: +380 44 591 6465
E-mail: valentine.smirnyagin@gmail.com