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EBRD provides a €28.5 million loan to Ukrainian wood-panel company
Syndicated credit supports expansion of Kronospan, boosts local competition
The EBRD is providing a €28.5 million loan to Kronospan UA, a wood-based panel producer located in Novovolynsk in north-western Ukraine, which is part of the Kronospan Group. Up to €12 million will be syndicated to commercial banks. Loan proceeds will be used for the construction of a medium-density fibre board (MDF) facility in Ukraine.
The loan is a successful follow up to the 2006 cooperation between the Bank and Kronospan UA, when the EBRD provided a €60 million loan for the construction of a particleboard production plant at the site. The project will allow Kronospan to install a medium-density fibre board facility with an annual capacity of 168,000 cubic metres.
According to Olivier Descamps, the EBRD’s Business Group Director, for Southern- Eastern Europe, Caucasus and Central Asia, the Bank has had a very successful cooperation with Kronospan Group in many countries of the region such as Russia, Romania, Slovakia and Ukraine. In the context of this particular project Kronospan will provide competition to the importers who are currently the main sellers of the medium-density fibre board in Ukraine. The availability of locally produced MDF board will also benefit Ukrainian producers of furniture, he said.
The European Bank for Reconstruction and Development is the biggest financial investor in Ukraine. As of July 2008, it had committed over €3.5 billion through almost 170 projects.
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