KYIV, Ukraine, June 29, 2005 — The International
Finance Corporation (IFC), the private sector financing arm of the World
Bank Group, is providing $45 million in loans to two electricity distribution
companies in Ukraine, AES KyivOblenergo (KOE) and AES Rivneenergo (RE).
The AES Corporation (NYSE: AES), based in Arlington, Virginia, USA, is
a majority shareholder in both companies.
KOE and RE together serve 1.2 million customers from a population base
of approximately 3 million people. KOE supplies electricity to the areas
surrounding Kyiv (excluding the city of Kyiv) and RE supplies electricity
to the northwest region of Ukraine. IFC’s financing will help the companies
reduce electricity losses, refurbish their distribution network equipment,
increase the network capacity in high growth areas, and improve their overall
management efficiency through investing in modern communication systems
and information technology.
"IFC is committed to meeting Ukraine's infrastructure investment needs,
especially with private companies like AES Corporation that are dedicated
to high standards of service," said Francisco Tourreilles, director
of IFC's Infrastructure Department. "IFC's investment will support
the improvement of electricity services in Ukraine and provide an important
signal for further private investment in Ukraine's energy sector."
"IFC is pleased to have committed its first investment in Ukraine's
power sector," said Edward Nassim, IFC's director for Central and
Eastern Europe. "IFC's investment will provide the necessary long
term financing that is currently unavailable in Ukraine."
“AES is pleased to work with the IFC to support the growth and modernization
of Ukraine’s electric power system and to contribute to the economic development
of the country,” said Garry Levesley, AES Vice President, Ukraine. “Since
privatization in 2001, AES has made significant improvements to the operation,
reliability and network capacity of KOE and RE. The companies are already
among the best performing electric utilities in Ukraine. Through
this new, targeted investment, we will extend our commitment to operational
excellence and bring additional benefits to our customers and other stakeholders.”
The loans are denominated in US dollars and have the longest debt tenor
for a privately owned infrastructure project in Ukraine. In addition to
the loans, the IFC will provide a $5 million Partial Credit Guarantee (PCG),
which will enable the two companies to mobilize an additional $30 million
Hryvnia-equivalent long term debt. This will be the first PCG debt structuring
The mission of IFC (www.ifc.org)
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, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY04, IFC has committed more than $44
billion of its own funds and arranged $23 billion in syndications for 3,143
companies in 140 developing countries. IFC's worldwide committed portfolio
as of FY04 was $17.9 billion for its own account and $5.5 billion held
for participants in loan syndications.
Ukraine became a shareholder of IFC in 1993. To date, IFC has invested
$233 million across 16 projects in the country. IFC has significantly expanded
its investment program in Ukraine in fiscal year 2004, committing $87 million
in the agribusiness, financial, and general manufacturing sectors. IFC
has also been conducting an extensive advisory program in Ukraine since
1992. Current donor-funded programs offer advice on corporate governance
to companies and banks, seek to improve the business environment, and promote
leasing, development of the agribusiness sector, and the growth of small
and medium enterprises.
AES is a leading global power company, with 2004 revenues of $9.5 billion.
AES operates in 27 countries, generating 44,000 megawatts of electricity
through 124 power facilities and delivers electricity through 15 distribution
companies. Our 30,000 people are committed to operational excellence and
meeting the world’s growing power needs. To learn more about AES, please
visit www.aes.com or contact media relations at firstname.lastname@example.org