The EBRD is lending Ukraine`s largest steel company, Mittal Steel Kriviy Rih, $200 million to help upgrade technology, boost productivity and become more energy efficient, according to a EBRD press-release, forwarded to UNIAN.
The Bank will make a seven year loan to Mittal Steel Company, which bought a 93 percent stake in the Ukrainian company in November 2005. The entire sum will be on-lent to the Ukrainian subsidiary.
By participating in this project, the EBRD is demonstrating its support for a transparent and successful privatisation and the introduction of international business management practices in Ukrainian companies, said Olivier Descamps, Business Group Director for southern and eastern Europe. The loan will also help strengthen the local economy, increase steel production, improve competitiveness and standards within the country’s steel sector, and significantly boost energy savings, he added. The latter is especially important given that Ukraine remains one of the most energy-intensive countries in the industrialised world and its steel sector needs significant investment to comply with modern requirements of energy efficiency. It will also reduce the use of natural gas at the Kriviy Rih facility, thus contributing to the energy diversification strategy of Ukraine.
The loan builds on previous cooperation between the Bank and Mittal Steel Company in EBRD’s countries of operations. As well helping the company turn around aging and financially weak plants in Kazakhstan and Romania, last year the Bank provided Mittal plants in Bosnia and Herzegovina and in FYR Macedonia with loans to improve, among other things, energy efficiency.
Aditya Mittal, President and CFO, of Mittal Steel said: “We are delighted that the EBRD is supporting our investment program in Kriviy Rih. In the course of its longstanding relationship with the Bank, Mittal Steel has learned to value not only the financial involvement but in particular also the technical expertise that the EBRD brings to bear. Moreover, the EBRD has considerable experience in Ukraine predating Mittal Steel’s presence there.”
The Bank is the largest financial investor in Ukraine, having committed more than ?2,2 billion in 77 projects in sectors ranging from banking to infrastructure and general industry to small and medium-sized enterprises.