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EBRD loan to largest Russian ammonia producer
$40 million loan is first medium-term finance secured by Togliattiazot
The European Bank for Reconstruction and Development (EBRD) is advancing a $40 million loan to OAO Togliattiazot, the biggest ammonia producer in the former Soviet Union, that will be used to improve environmental standards, promote energy efficiency and provide working capital.
The 3½-year loan represents the first medium-term finance obtained by the company, which has agreed to produce accounts audited according to International Accounting Standards (IAS) from 1999 onwards as part of the loan agreement.
Noreen Doyle, the EBRD's Deputy Vice President, said at today's signing ceremony: "TOAZ stands out as a Russian company that has consistently been re-investing earnings into its own operations to maintain its plant properly, diversify output and raise production levels.
Ms Doyle added that TOAZ has committed to introducing IAS accounts because it understands how important these are for increasing corporate transparency and gaining access to international capital markets. She said the EBRD hopes this loan is just the first step in cooperation between the company and the Bank.
This is the EBRD's largest deal in the Russian chemical sector and its first since the 1998 crisis.
Up to a quarter of the loan is to be used on energy efficiency and environmental improvements on the plant at Togliatti, on the Volga river. Investments under the Environmental Action Plan agreed under the EBRD loan will total $32 million between 2001-2008 - with TOAZ contributing most of the funds. TOAZ's environmental efforts will be particularly directed at improving the quality of effluent.
The EBRD expects to syndicate part of the loan.
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