OREANDA-NEWS. On 11 February 2008 was announced, that IFC, a member of the World Bank Group, is providing financing to Ukraine’s Industrial Union of Donbass as part of an ongoing effort to modernize the country’s steel industry.  The company is a leading steel producer, with subsidiaries in Hungary and Poland as well as Ukraine.

IFC’s $350 million long-term financing package follows an earlier investment in the company. The package consists of a $100 million loan for IFC’s own account and a $250 million syndicated loan to be raised from leading international banks. ABN AMRO and Sociйtй Gйnйrale Corporate and Investment Banking are acting as coordinating mandated lead arrangers and bookrunners of the syndication. 

This financing will help modernize operations at the company’s two iron and steel plants, Alchevsk Iron and Steel and Dneprovsky Iron and Steel, which are both over 100 years old, and at a coke plant, Alchevsk Coke.  IFC’s support will help increase the company’s competitive advantage, expand its range of steel grades, and improve environmental performance.

“We have had successful experience in working with IFC as a long-term lender.  This helped us implement a previous capital investment program, which boosted both our company’s performance and the competitiveness of a key sector of Ukraine’s economy. IFC’s new financing will allow us to continue replacing old, polluting, and inefficient steel facilities with the latest production technologies. This will improve quality and widen our range of products, while helping us invest in further environmental improvements,” said Sergiy Taruta, Chairman of the Board of Directors of the Industrial Union of Donbass.

The company’s modernization program will lower costs and significantly reduce emissions of particulates and carbon dioxide. It will generate substantial economic benefits in the towns of Alchevsk and Dneprodzerzhinsk, where the company’s plants employ about 40,000 people.  The company’s investments will create about 5,000 new indirect jobs in related sectors, including construction, extractive industries, engineering, transportation, and services.

“IFC is pleased to strengthen and develop our partnership with the Industrial Union of Donbass. The company has demonstrated a strong commitment to reducing air and water emissions from its Ukrainian facilities and to improving conditions for the surrounding communities by implementing modern technologies and best environmental practices. IFC is supporting a local industry leader that is strengthening its position as a regional player in the industry,” said Dimitris Tsitsiragos, IFC Director for Global Manufacturing and Services.