Project description
and objectives:
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Volkswagen will construct (2007-09) and operate a greenfield automobile
assembly plant (the “Project”) in the Russian Federation for a total
investment of approx EUR 425 million. The new Russian entity, “Volkswagen
Rus”, will begin production in late 2007.
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Transition impact:
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The transition impact potential of the Project is derived primarily from the
positive influence of a reputable foreign strategic investor on the
restructuring and modernisation of the Russian automotive industry. The
popularity of Volkswagen cars in Russia insures the Company a strong position
on the domestic market. Volkswagen is world-renowned for its quality,
efficiency, and engineering achievements. Local production will enable the
Company to demonstrate these attributes in the Russian automotive industry,
thereby influencing local producers and improving industry standards.
Strengthening competition within the sector as well as setting product
quality, technological and business standards will be major contributions to
this process.
Strengthening of market interactions and linkages in other related sub-sectors
is another potential transition merit of the Project. VW Rus will be working
together in a quasi-vertically integrated structure with local supply
companies and service providers. This is likely to have a two-fold impact –
drawing FDI parts suppliers into Russia and providing a new but demanding
market for domestic parts suppliers. This should lead to increased
competitiveness and quality of domestically manufactured Russian motor
vehicles, as well as set higher standards in the Russian automotive production
industry.
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The client:
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Volkswagen Rus will operate a greenfield automotive assembly plant near Kaluga
City (Kaluga Oblast), Russia. The Project Sponsor will be Volkswagen AG, the
largest auto manufacturer in Europe.
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EBRD finance:
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The EBRD will provide EUR 30 million to the Project in the form of an equity
investment in Volkswagen Rus.
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Total project cost:
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Total project will cost approx EUR 425 million, of which EUR 150 million will
be in the form of equity, the remainder will be in the form of a syndicated
loan. The EBRD’s portion will be EUR 30 in equity. Separate discussions on a
potential loan are continuing.
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Environmental impact:
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Construction of new facility on an 800 hectares greenfield site is likely to
be significant therefore an Initial Environmental Examination (IEE) will be
carried out to determine the environmental category and the environmental due
diligence requirements. Other issues associated with EU vehicle standards
(fuel quality, emission standards, recycling, etc.) will also be addressed.
Specific attention will be placed any operations that would fall under EU IPPC
requirements, such as the use of solvents (eg volatile organic compounds
“VOC”) in the painting process. Preliminary information and discussions with
VW’s environmental staff confirmed that the site selection, OVOS (EIA) and
some public consultation has recently taken place. This will be reviewed as
part of the IEE, and terms of reference for any further environmental due
diligence that may be necessary will be developed.
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Technical
cooperation:
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None.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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M. Kleimann, Volkswagen AG
Tel: +49-5361-941767
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EBRD contact:
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Rodolphe Ullens de Schooten, Operation Leader: ullensr@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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