Press Releases

Georgian glass financing handled with care by EBRD and IFC

Véronique Cassegrain (EBRD) Tel: +44 171 338 7237

Brigid Janssen (IFC) Tel: +1 202 458-4698

TBILISI, GEORGIA, June 2, 1999 — In the largest foreign investment outside the oil sector in Georgia, the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) are providing US$17.6 million (EUR 16.6 million) in financing to Saaktsio Sazogadoeba MINA (Ksani), a glass bottle manufacturer. The joint financing will help Ksani to increase exports, enhance energy efficiency and raise environmental practices to international standards.

The EBRD and IFC are each making a US$2.5 million (EUR 2.3 million) equity investment and a US$6.3 million (EUR 6.0 million), 6.5-year secured loan. The total costs of the project are estimated at US$27.4 million (EUR 25.9 million).

"This project is a good boost for Georgia. It will help the country to attract much-needed foreign direct investment and encourage more private entrepreneurship," said Olivier Descamps, Director of the EBRD's Georgia team. "This is the EBRD's second investment in Georgia's private industrial sector," he continued. "The project demonstrates to other investors the Bank's continued willingness to finance private companies with strong foreign sponsors."

Edward Nassim, an IFC Director for Europe, said the Ksani project demonstrates the critical role that the private sector can play in the economic recovery of Georgia.  "It also provides a good example of how IFC and the EBRD can combine forces when both are needed to help get an investment off the ground."

Ksani, located outside of Tbilisi, was constructed in 1986 and employs more than 300 people. Since October 1997, the company has been owned by Turkiye Sise ve Cam Fabrikalari AS (Sisecam), a leading Turkish glass manufacturer.

"The support of IFC and the EBRD will enable Sisecam to extend its activities in Georgia and in the region," said Adnan Çaglayan, President of Sisecam. "The financing will help Ksani to modernize its production equipment and to complete its privatisation process. It will also provide permanent working capital to the company."

The EBRD was established in 1991 following the collapse of communism, to aid the transition from centrally planned to market economies in central and eastern Europe and the Commonwealth of Independent States (CIS).  The EBRD is owned by 60 shareholders: 58 countries, the European Investment Bank and the European Community, and operates with EUR 20 billion in authorised capital.

The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will 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.

The Investment Team for this project is Eric Crabtree (Primary IO), Stephanie von Friedeburg (Secondary IO), Kathy McGann (Lawyer), and Jean Orban (Engineer).