EDB raises loan from European banks to finance equipment to be purchased by Belarusian Steel Works
Almaty, 3 October 2013. Eurasian Development Bank (EDB) has signed loan documentation with a group of European banks, including Societe Generale Corporate & Investment Banking, IKB Deutsche Industriebank AG, and AKA Ausfuhrkredit-Gesellschaft m.b.H. for a loan of around circa Euro 107.8 million with maturity up to 10 years.
These funds are raised by the EDB for the purposes of targeted financing of technological equipment to be purchased from Danieli & C. Officine Meccaniche S.p.A. and its German subsidiary by Belarusian Steel Works OJSC [open joint-stock company] (BMZ), the management company of Belarusian Metallurgical Company holding, for construction of a wire rod mill construction in the town of Zhlobin (Belarus). Wire rods are needed for the construction of bridges, buildings and houses.
The financing is provided against guarantees of SACE., the Italian public export credit agency, and Euler Hermes Deutschland AG, a German insurance company acting for and on behalf of the Federal Republic of Germany.
«It is the first time Eurasian Development Bank makes such a complex multi-sided deal, simultaneously involving a pool of Western banks, as well as Export Credit and Insurance Agencies holding leading positions in this market,» says Dmitry Krasilnikov, Member of EDB Management Board, Managing Director for Corporate Finance. «At the same time, owing to the high rating assigned to the Bank by the international Organisation for Economic Cooperation and Development——which corresponds to the relevant rating assigned to Russia——we have managed to get the price of borrowing reduced for our Belarusian partners to the maximum possible extent.»
On July 18 this year, EDB and ASB Belarusbank OJSC signed loan agreements with BMZ to finance the project of the wire rod mill construction. The overall financing to be provided to the enterprise by EDB, which acts as the organiser of the project financing, is Euro 141 million.
The project planned to be implemented by BMZ involves the construction of a rolling mill——that includes purchasing modern equipment, assembling and putting it to operation——and a new workshop to manufacture bar stock. At the first stage of the project implementation, the productivity of the new mill will produce 700 thousand tons. In the future, with some additional equipment installed, the annual output should reach 1 million tons.
Up to one quarter of the output of the new production will be supplied to the domestic market of Belarus, around 13 % will be exported to the CIS countries, and nearly two thirds — to the rest of the world.
Additional Information
Eurasian Development Bank is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth and the expansion of trade and other economic ties in its member states. EDB’s charter capital exceeds US $1.5 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan.
Read more about EDB at https://www.eabr.org