WASHINGTON, D.C., June 30, 2004—The
International Finance Corporation (IFC), the private sector arm of the
World Bank group, signed an agreement to provide a $5 million loan to support
the expansion of Nova Liniya, a Do-It-Yourself retailer in Kiev, Ukraine.
IFC’s investment is part of Nova Liniya’s $14 million investment program
to build two new 10,000 sq.m. stores that will offer a wide range of high
quality home improvement products and specialized services at an affordable
price. The stores will follow the best practices of the modern Do-It-Yourself
format, comparable to those of large chains such as Home Depot, Lowes and
OBI. IFC will also assist the company to meet World Bank and international
environmental and safety guidelines. In addition, IFC’s involvement
is expected to enhance Nova Liniya’s corporate governance policies and
practices, especially as the company grows and attracts new shareholders.
This project is expected to boost local production of home improvement
products by providing a marketing and sales outlet. In addition the two
new stores will directly employ 300 workers and create jobs along the supply
stream and in ancillary activities.
Richard Ranken, Director of IFC’s Global Manufacturing and Services Department,
who signed the investment agreement noted that IFC’s participation in
this project will help increase investors’ confidence in the country’s
business environment, and will thereby provide a significant demonstration
effect in support of foreign investment in the region.
The mission of IFC, part of the World Bank Group, is to promote sustainable
private sector investment in developing countries as a way to reduce poverty
and improve people’s lives. IFC finances private sector investments
in 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. From its
founding in 1956 through FY03, IFC has committed more than $37 billion
of its own funds and arranged $22 billion in syndications for 2,990 companies
in 140 developing countries. IFC's worldwide committed portfolio as of
FY03 was $16.8 billion for its own account and $6.6 billion held for participants
in loan syndications.
Ukraine became a member of IFC in 1994. Since then, IFC has invested about
$100 million in nine projects. IFC significantly expanded its investment
program in Ukraine in 2003-2004, committing $72 million of investments.
IFC's increased activity reflects the improving investment climate in Ukraine,
greater opportunities in a broad range of sectors, and a stronger foreign
investor interest. IFC has also been conducting an extensive technical
assistance program in Ukraine since 1992. IFC has contributed to privatization
of small businesses and unfinished construction sites. Current donor-funded
programs offer advice on corporate governance, the development of the agribusiness
and leasing sectors and seek to improve the business environment and promote
the growth of the small and medium enterprise sector.