EDB to Finance Construction of Wagon Works in Belarus

Almaty, 19 April 2011. The Eurasian Development Bank (EDB) signed an agreement with Osipovichsky Wagon Works (OWW) on an eight-year facility for a total of $63,519,000 as part of a project to organise manufacture and repairs of freight cars and tank cars in Osipovichi, Belarus.

These funds will go towards a new OWW plant and equipment. Capital construction costs will total $130 million. Apart from the EDB, the project is being funded by the shareholders of OWW — Belarusian Railways (Belarus) and Grand Express (Russia).

After OWW reaches its design capacity in 2014, it will manufacture up to 3,500 freight cars and up to 2,000 tank cars a year. The company will also be capable of repairing up to 2,000 units of rolling stock annually.

The project is in line with the EDB’s strategic objectives and mission, as it will promote the development of transport infrastructure in Belarus and generate large mutual investment and trade flows between the Bank’s member states.

Most of the equipment will be supplied by Russian mechanical engineering companies. As is expected, OWW’s products will be exported mainly to Russia (40%) and Kazakhstan (10%).

The project will allow over 1,600 jobs to be created and produce short and long-term multiplier effects on the Belarusian and Russian economies, since orders for equipment will bring about additional output and new jobs in related industries.

The project has great potential for innovation, as OWW intends to use new flexible technology which enables quick switching between individual wagon models.

The project falls into the category of transport mechanical engineering and infrastructure which are the priorities for the EDB’s investment. It will help meet the member states’ demand for rolling stock for their key industries (grain, fertiliser, oil products) and improve their transport infrastructure by modernising the existing car fleet.