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IFC Signs $75 Million B-Loan for Lukoil Karachaganak with Commercial Banks

Jan Van Bilsen                
Phone:  (202) 473-9056        

Fax:  (202) 974-4387        


Washington D.C., January 31, 2003—Commercial banks have joined the International Finance Corporation (IFC), the private sector development arm of the World Bank Group, in its loan agreements with Russia’s premier oil company, Lukoil. IFC had launched a syndicated loan in November after having signed loan agreements with Lukoil on October 30, 2002, to participate in one of the most significant projects in Kazakhstan’s oil and gas sector. This multibillion dollar projectone of three large-scale oil field developments in the country and the first syndicated oil and gas transaction involving long-term tenors—includes development of the world-class Karachaganak oil, gas, and condensate field. It also includes a 635-km connecting pipeline from the oil field to the Caspian Pipeline Consortium (CPC), which will transport the oil through Kazakhstan and Russia to the Black Sea. When completed in early 2004, the project will form a key part of Kazakhstan’s total oil and gas exports.

“We are very pleased to be associated with a project of such importance to Kazakhstan, and one which will contribute to the country’s efforts to increase its oil and gas production,” said Mr. Rashad Kaldany, IFC Director for Oil, Gas, Mining, and Chemicals.

IFC’s US$150 million financing package to Lukoil Overseas Karachaganak B.V. (Lukoil B.V.) will support the company’s share of development costs and consists of a $50 million A-loan for IFC’s account; a $75 million B-loan for the account of commercial banks; and a $25 million subordinated C- loan, also for IFC’s account. IFC, as the sole arranger and syndicator of the B-loan, has broken new ground by bringing in international commercial banks for a long-term financing in Kazakhstan under IFC’s umbrella. All banks invited for the syndication signed up today. These banks are ABN-AMRO Bank N.V., Bayerische Hypo- und Vereinsbank Aktiengesellschaft, Crédit Lyonnais, ING Bank N.V., Natexis Banques Populaires, RZB-Austria, SG Investment Banking, and WestLB AG.

Mr. Khosrow Zamani, IFC Director for Southern Europe and Central Asia, noted, “The Karachaganak project is a demonstration of IFC’s commitment to promote sustainable development.”

Lukoil B.V. is a whollyowned subsidiary of Russia’s Lukoil, which has a 15 percent shareholding in the Karachaganak field development. The project is being jointly developed by BG of  the United Kingdom (32.5 percent), ENI-Agip group of Italy (32.5 percent), ChevronTexaco of the United States (20 percent), and Lukoil.

IFC has worked actively to support the development of a strong private sector in Kazakhstan since it became a member of the Corporation in 1993. IFC has approved investments for its own account of over $400 million as well as over $270 million from other sources of financing.

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 its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries.  IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.

Lukoil Overseas Holding AG