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EBRD arranges $150 million seven-year loan for new General Motors car plant in St. Petersburg
The European Bank for Reconstruction and Development is the lead arranger for a $150 million seven-year syndicated loan to General Motors (GM) to finance the construction of a green field car assembly plant in St. Petersburg to supply the Russian market, one of the world’s fastest growing auto markets.
The new GM plant being built on the outskirts of a city rapidly turning into a major hub for foreign auto manufacturers setting up production in Russia, will initially have a capacity of 70,000 cars a year. It is scheduled to start production this autumn with the Chevrolet Captiva and the Opel Antara.
The loan will bring total EBRD commitments to the Russian automotive sector to €1.2 billion.
This new loan underlines the EBRD’s strong support for GM’s St. Petersburg project which will channel international best-practice techniques, know-how and other skills into the Russian automotive sector, said Alain Pilloux, the EBRD’s Business Group Director for Russia.
GM has already played a pioneering role in raising the quality of locally-manufactured components and the knock-on effects of this new project will include attracting internationally qualified suppliers as the growing number of foreign manufacturers move to localizing production of larger parts in Russia itself, Mr. Pilloux added.
The Russian auto market has been growing at an annual rate of 35 percent, as measured in terms of units, and last year became Europe’s third largest market. Demand for cars is expected to rise by over 400,000 cars annually over the next five years. The main factors behind this growth are Russia’s economic boom, the rise in disposable incomes and the much greater availability of credit programmes for car purchases.
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