EDB Provided $215 Million to Tikhvinsky Vagonostroitelny Zavod in Loan

The Eurasian Development Bank (EDB), the Bank of Development and Foreign Trade State Corporation (Vneshekonombank) and the Tikhvinsky Vagonostroitelny Zavod (TVZ) signed a loan agreement.

The agreement provides that the EDB will open for TVZ a $215-million non-revolving credit line for eight years, to finance TVZ’s new high-tech wagon works in Leningrad Oblast. The loan will be utilized to construct the works, purchase equipment, and commission the works.

TVZ is expected to reach its full capacity by the fourth quarter of 2011. The works will annually produce 10,000 freight cars of four most demanded types, including new generation wagons. The main demand for its products is created by Russian Railways, which need to renew its obsolete universal wagons and expand its existing wagon fleet to meet the growing cargo turnover, and other CIS railways which use the same gauge as Russia. According to experts’ estimates voiced at the meeting of the CIS Railway Transport Council in November last year, Russian and other CIS railways need up to 100,000 freight cars annually.

This project is fully in line with the mission and strategy of the EDB, and:

• will secure mass production of new freight cars and contribute to the development of the transport sector in Russia by enhancing the efficiency of railway transport and reducing the risk of accidents resulting from the use of obsolete cars;
• has a high value added and belongs to one of the EDB’s priority sectors (mechanic engineering and transport);
• will allow 3,500 new jobs to be created, and generate tax revenue; and
• will contribute to economic integration in EurAsEC and the CIS by strengthening the transport system of Russia and the common transport space of the CIS, and increasing export to the region’s countries.