Moscow/Washington D.C., July 8, 2002—The
International Finance Corporation, the private sector arm of the World
Bank, invested US$29.9 million in Russian ZAO Volga-Dnepr Airlines, to
expand its fleet of Antonov 124-100 aircraft. This is IFC’s first
project in the aviation sector in Russia and will support the modernization
of the local cargo aviation industry.
The project will help Volga-Dnepr Airlines to continue its growth, maintain
its leading market positions, and meet growing demand for its services.
Declan Duff, Director of IFC’s Infrastructure Department, said: ”Volga-Dnepr
is building an international business on the foundation of Russia’s unique
airframe building industry. We expect that the investment will help
demonstrate the strengths and potential of the private sector transport
industry in Russia. We believe that it will encourage other financiers
to invest in the transport sector.”
IFC’s investment in Volga-Dnepr Airlines consists of a loan of $16.9 million
for its own account and a syndicated loan of $13 million to be provided
by FMO (Financierings-Maatschappij voor Ontwikkelingslanden NV).
Alexey Isaikin, the Chairman of the Board of Directors of Volga-Dnepr Airlines
said: “This investment is the result of consistent efforts of Volga-Dnepr
Airlines’ management team to create a cargo airline which operates competitive
Russian aircraft, and which is both predictable and transparent to investors.
I am glad that IFC was satisfied with the information it received
from Volga-Dnepr, and made a decision to invest, despite increased risks
in civil aviation and Russia risks. I am looking forward to continuing
our cooperation with IFC.”
Established in 1991, Volga-Dnepr Airlines is one of the first privately
owned air transportation companies in Russia. During the last 10
years of operation, the company became a major Russian cargo airline and
an international leader in heavy and outsize air cargo market, serving
major international customers in airspace, oil and gas, and automotive
industries as well as governments and international organizations.
With about 60 percent market share and revenue of about US$100 million,
Volga-Dnepr Airlines is a leader in this market which has been growing
at a rate of more than 20 percent in the last decade and is expected to
continue its strong performance in the long term. IFC’s ten-year financing
will support the construction of an Antonov An-124 –100 Russian freighter,
which will be the tenth in the Volga-Dnepr fleet.
IFC’s mission is to promote sustainable private sector investment in developing
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, and provides technical
assistance and advice to governments and businesses.
Since the early 1990’s IFC has been active in Russia across a wide range
of sectors, including mining, food processing, pulp and paper, manufacturing,
oil and gas, power, telecommunications, retail trade, health care, banking,
leasing and housing finance.
Since its founding in 1956, IFC has committed more than $31 billion of
its own funds and arranged $20 billion in syndications for 2,636 companies
in 140 developing countries. IFC’s committed portfolio at the end
of FY01 was $14.3 billion.