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IFC Supports Rehabilitation of Bosnian Chemicals Company to Revitalize Local Economy


Washington, D.C.
Hannfried von Hindenburg

Phone:  +1 (202) 458-5613

Email:  
hvonhindenburg@ifc.org


Lukavac, Bosnia, March 20, 2007 — IFC, the private sector arm of the World Bank Group, has agreed to support the post-war rehabilitation and expansion of a soda ash plant in Bosnia and Herzegovina to invigorate the local economy. IFC’s €24 million loan to Sisecam Soda Lukavac will be used to fund a comprehensive turnaround program designed to return the firm to profitability and full capacity. The funds also support an environmental improvement program.

Revitalizing SSL’s soda ash operations in Bosnia’s Tuzla Canton will boost the economy, as the plant is the largest customer of local limestone and salt mines. Limestone and salt are key ingredients for production of soda ash, which is used in the manufacturing of glass containers, fiberglass insulation, and flat glass for the housing and automotive industries.


After a recent privatization, SSL is majority-owned by Turkey-based Sisecam Group, an IFC client with significant investments in Bulgaria and Georgia as well as Turkey. IFC’s support for the group is part of an effort to foster South-South investments, in which leading emerging market companies expand into other emerging markets.


“This transaction underscores our long-standing relationship with IFC and our shared commitment to invest in emerging markets,” said Dogan Arikan, President and Chief Executive Officer of Sisecam Group. “We hope to make this transaction a success story for the development of a globally competitive regional industry.”


IFC’s loan is expected to help increase confidence in Bosnia’s privatization program, improve SSL’s environmental performance, and support development of the Tuzla Canton’s limestone and salt companies.


“The successful privatization and turnaround of SSL demonstrates interest in Bosnia and Herzegovina from international private investors,” said Shahbaz Mavaddat, IFC’s Director for Southern Europe and Central Asia. “We hope that the business environment will continue to become increasingly conducive to such investments.”


Lance Crist, Manager of IFC’s Chemicals Division, added: “Bosnia and Herzegovina’s abundant limestone and coal resources provide SSL with a natural competitive advantage for becoming a strong regional player in the soda ash industry, an advantage the company can now capitalize on.”


About IFC

IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries.  IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org.

Bosnia and Herzegovina became a member and shareholder of IFC in 1996.  Since then, IFC has invested more than $250 million in the country, including $11 million in syndicated loans, to finance over 21 projects across a variety of sectors.  In FY06, IFC’s investments reached $34 million.  IFC’s committed portfolio in Bosnia currently stands at $170 million.  IFC has invested in key sectors including banking, general manufacturing, and chemicals.  For more information, visit
www.ifc.org/seca.