Projects financed by the EDB
Launch of high-spec freight railcar and tank container production in Belarus
The EDB’s policy is to ensure that the countries that join the bank are represented in the Bank’s investment portfolio as soon as possible after their accession. This has certainly been the case for Belarus.
Belarus has significant research and technological potential and a highly developed production base. It also has strong foundations upon which to develop the power, mechanical engineering and transport sectors, making this country a successful launch-pad for new and sophisticated technologies which are in demand in all the EDB member states.
Since Belarus joined the EDB in summer 2010, the Bank has launched several large investment projects in the country, all of which have an integration effect because they involve Russian contractors and investors, and a significant proportion of new output will be supplied to EDB member states.
In April 2011, the EDB signed a loan agreement with the Osipovichi Wagon Works, under which the plant is given access to loans of US $ 63.519 m over eight years to set up cutting-edge hi-tech production of freight railcars and tank containers in Osipovichi.
The Bank began to finance the project in July 2011.
In 1933, a railcar repair yard was built in Osipovichi, which included an assembly plant and separate welding, fitting, joinery and brake-maintenance divisions. In 1935, the yard became the Osipovichi Rail Wagon Depot, and since then it has been a leading centre for overhauling
The EDB’s funds will be used to build up the company and to purchase equipment. The total capital investment in construction is about US $ 131 m. In addition to the EDB loan, financing is being provided by the plant’s shareholders — Grand Express (project initiator, Russia) and the Belarusian Railways (Belarus). A loan was also raised from Priorbank of Belarus.
The project comes under one of the EDB’s priority investment sectors, i.e., the transport engineering and infrastructure. It is anticipated that the plant will supply rolling stock to EDB member states’ key industries (transportation of grain, fertilisers and oil products) and improve their transport infrastructure with new freight cars.
The Osipovichi works meets the EDB’s strategic objectives and mission in fostering the development of the country’s transport infrastructure and promoting significant mutual investment and trade between the Bank’s member states. In addition to the Belarusian market, the plant will supply products to Russia, the CIS countries, and the Baltic States. Russia and Kazakhstan are expected to become the main markets for the plant’s products (40% and 10% of the total output respectively).
The project has great potential for innovation since the new flexible technology it uses allows the plant to switch quickly between the manufacture of different types of railcar.
More than 1,600 jobs will be created at the new works. Short-term and long-term multiplier effects for the Belarusian and Russian economies will result from the purchase of equipment generating additional production and creating jobs in related sectors.
The first phase of the project, including the reconstruction of the existing plant, was commissioned in 2011. All five of the initial complexes have been commissioned. The plant has also launched production of stainless steel tank containers for the transportation of liquids. Two pilot models of such tankers are being manufactured: stainless steel containers for the transportation of hazardous liquids and iron containers for the transportation of gas.
After the Osipovichi plant achieves its design capacity, its annual output will reach up to 2,500 freight cars and 2,000 tank containers. The production of freight cars is likely to be increased further to 3,500 per year. The plant will also repair rolling stock.