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EBRD continues support for Ukraine's steel sector
The EBRD is lending $35 million to help Ukraine’s only modern mini steel mill,
Donbass-based ISTIL (Ukraine), grow to meet rising demand. A portion of the
loan, $15 million, will be syndicated to international commercial lenders.
The loan comes three years after the EBRD extended a $25 million revolving
credit for working capital to ISTIL, and will be used to make production and
energy-efficiency improvements which will support the company’s growing
business of cast billets and speciality steel products used by rolling steel
mills, seamless pipe manufacturers and machine-building plants world-wide.
The EBRD’s continued support clearly demonstrates how investment projects can
be successfully implemented in this sector and sends an important signal to
other major players in Ukraine’s steel industry, as well as increasing
competition in the sector, said Olivier Descamps, EBRD Business Group Director
for Ukraine and South East Europe. Moreover, by syndicating this deal the EBRD
introduces international financiers to longer-term exposure to a Ukrainian
steel mill.
Support for ISTIL, whose production is based on environmentally safe and
energy-efficient steel making equipment, is in line with the Bank’s strategy
to support investments that modernise energy intensive industries and promote
energy efficiency, Mr Descamps said. This mini steel mill uses electric arc
furnaces in conjunction with a continuous casting machine and a blooming mill
to produce higher-value-added steel products traded world-wide, he added.
The Bank’s cumulative investments in Ukraine stand at €1.5 billion through 63
projects, while commitments in the metallurgy sector alone, across all
countries of operations, exceed €500 million.
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