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EBRD to grant loan to Lithuanian insulation material company
The Lithuanian rockwool insulation industry will benefit from a SEK 55 million (ECU 5.9 million) loan from the European Bank for Reconstruction and Development (EBRD). The loan to Paroc Silikatas UAB (PS), a joint-stock company incorporated under Lithuanian law, was signed this week in Helsinki.
Ron Freeman, First Vice President of the EBRD, said: “This loan will play a major role in the production of efficient thermo-insulation materials which is important within the overall development of the Lithuania’s construction industry. It will also enable PS to become a long-term market leader, both in Lithuania and the other Baltic countries, in an industry which could otherwise disappear”.
PS is a joint venture between Partek Insulation AB of Sweden (PI), Silikatas UAB of Lithuania, Finnish Fund for Industrial Cooperation Limited (Finnfund) and the Nordic Environment Finance Corporation (Nefco). It will purchase and install a modern production line for high quality rockwool insulation, and will primarily target the domestic market, with Latvia, Estonia and Belarus as the obvious export markets. Silikatas, the local partner, which was one of the leading rockwool producers in the former Soviet Union, will own 21.2 per cent of the joint venture. Finnfund and Nefco will co-finance the project in addition to being equity investors and will be shareholders for 15.4 per cent each. As the largest equity investor, with 48 per cent of the capital, PI will play an integral role in implementing the project and managing the joint venture.
The EBRD facility comprising a senior loan of SEK 43 million, a subordinated loan of SEK 10 million and a stand-by facility of SEK 2 million, will finance a modern production line, building adaptations and working capital. The investment will allow PS to become cost effective, export-oriented, technologically competitive and environmentally sound. The project will have a beneficial impact on employment in Lithuania. In addition, PI will transfer Western management, marketing and other expertise to PS.
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