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$15 million deal to boost leasing in Russian Far East and Siberia
EBRD backs Sumitomo to promote Japanese mining and construction equipment
The European Bank for Reconstruction and Development is to help Japan’s Sumitomo group expand the sale of Japanese construction and mining equipment in Siberia and the Russian Far East through a $45 million leasing framework in which the EBRD will bear up to one third of the risk.
EBRD financial support for Sumitec International Ltd., Sumitomo’s leasing arm in Russia, is targeted at medium-sized Russian companies in the booming construction and mining industries wanting to gain access to what is an increasingly popular alternative to traditional forms of financing when buying equipment.
The leasing facility covers equipment manufactured by Japan’s Komatsu Ltd., including bulldozers, excavators, pipe-layers and dump trucks. Komatsu is not part of the Sumitomo group.
The main users of such equipment in Russia are gold mining companies and the oil and gas industries.
The EBRD has taken a leading role in promoting the use of leasing in Russia during the last two years, First Vice President Noreen Doyle said at a signing ceremony in Tokyo.
Our $15 million support for this Sumitomo group project will put this innovative financial instrument within reach of some of the most remote areas of the country, where investment in new equipment is badly needed but where only a tiny proportion of Russia’s leasing companies are located, Ms Doyle added.
The Sumitec deal represents the fourth Russian leasing transaction signed by the Bank – all of them in the mining and construction equipment sector – and replicates the terms of a risk-sharing facility pioneered by the EBRD in Russia.
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