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A new deal signed by the EBRD to complete the modernisation of an industrial glass plant in the north of the Kyrgyz Republic is poised to have a lasting impact on the further development of the whole manufacturing industry in this Central Asian nation.
The Bank is continuing its support for Interglass, a manufacturing company that has become crucial to the economic well-being of the Kyrgyz town of Tokmak since Vladimir Steinert, a German businessman of Kyrgyz extraction, started investing in the Soviet-era plant in 2000.
In those early years the plant became a vibrant part of the industrial landscape in Tokmak, providing jobs for some 1,300 workers.
But now the factory is undergoing a programme of major modernisation that will help Interglass maintain its leadership position in Kyrgyz industry.
This latest loan from the EBRD will complete the upgrade of the plant’s facilities with the installation of modern equipment and technology, which will improve energy efficiency. The planned improvements will increase production capacities to meet the growing demand for construction materials in the region.
Before the modernisation activities started, the plant was already producing 10 million square metres of industrial glass a year and the planned improvements will lead to a substantial increase from that level.
The project is a key element of the EBRD’s country strategy for the Kyrgyz Republic that EBRD President Thomas Mirow discussed with the authorities in Bishkek during his trip to the country in May. That strategy ensures continued EBRD support for the recovery of the economy and sustainable growth after a period of social and political unrest in the recent past.
Small loan, big impact
The EBRD provided its first €5.5 million loan for Interglass in 2004 and followed this with a €10 million credit in 2009. It was a successful investment in the region with significant impact on the economic development of the Kyrgyz Republic.
According to Olivier Descamps, Managing Director for Turkey, Eastern Europe, the Caucasus and Central Asia, this loan is particularly important for the Kyrgyz Republic, which is one of the Bank’s smallest countries of operations.
“In our operations in these countries we have tailored our investment approach to the local reality, which means making smaller loans and equity investments, and taking greater risk than we might elsewhere. The EBRD, as a long-term partner and the biggest investor in the Kyrgyz private sector, continued to disburse its funding and develop new projects there during the recent political instability,” Mr Descamps adds.
“We have done very well lending to the smallest entrepreneurs through micro credit on the one hand, and to large enterprises such as the Kumtor Gold Mine and the Hyatt Hotel. We seek more and more to invest, through loans and equity stakes, in medium-sized companies such as Interglass, where sustainable growth and employment are building the country’s future,” says Kenji Nakazawa, Head of the EBRD Bishkek Resident Office.
When Interglass completes the planned modernisation, it will become a stronger regional player and continue to set an example to the rest of the manufacturing sector as the market leader throughout the country.
Critically this investment will provide employment opportunities for hundreds of local workers and sends a positive signal to foreign investors that the Kyrgyz Republic has real investment potential.
By Sergie Grytsenko
Photos are courtesy of Interglass.
Last updated 13 July 2011
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