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EBRD's first private sector loan to Kazakstan will promote home appliances production
Kazakstan will produce and export vacuum cleaners, refrigerators, washing machines and electric motors as a result of an equity investment and loan from the European Bank for Reconstruction and Development (EBRD), signed today. The equity of US$ 0.625 million and loan of US$ 14 million to Kramds-Simtel Industries, a Kazak-Turkish joint venture, will finance the construction and operation of two production plants in Almaty.
Ron Freeman, First Vice President of the EBRD, signing on behalf of the Bank, said: "This is our first project in Kazakstan involving consumer durable goods. Since its independence, Kazakstan has faced a shortage of reasonably priced home appliances. This project will enable Kazakstan to use domestic materials to supply its needs and also to begin to export part of its appliance products. It will contribute to the country's foreign exchange earnings and create jobs for about 1,900 people."
Mr Freeman added that the EBRD was particularly pleased that Kramds-Simtel is committed to use a chlorofluorocarbons (CFC) substitute in the production of refrigerators to protect the ozone layer. "This measure", he said, "complies with the Montreal Protocol on Substances that Deplete the Ozone Layer and fulfils its requirements two years in advance. This is another important application of the EBRD's environmental mandate."
Kramds-Simtel Industries is a major public/private joint venture established in Kazakstan. Its shareholders are Kramds National Joint Stock Corporation, Kazakstan's largest privatised company, and Simtel Industry and Trade Co., part of Simtel Holding, one of the oldest industrial companies in Turkey involved in the production of electric motors and household appliances. Simtel will also provide training in management and marketing techniques in Turkey and Kazakstan.
The total project cost is estimated at US$ 37.5 million, of which US$ 12.5 million will be met by equity financing and US$ 25 million by debt financing.
This is the EBRD's second project in Kazakstan. The first, signed in December 1993, is an ECU 100 million credit line to the National Bank of Kazakstan to finance the development of small and medium-sized enterprises.
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