Project description
and objectives:
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The proposed project is the construction and operation of a green field
vehicle assembly facility in Shushary, St. Petersburg.
Production of SKD vehicles has already begun and the facility is scheduled to
start production in November 2008. The output will be sold via the existing
Sponsor’s distribution network in Russia.
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Transition impact:
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The Bank will expand investment with a foreign sponsor that is demonstrating
high standards of business conduct by pro-actively assisting the expansion of
its investment into the Russian market. FDI inflows are a key channel to
narrow the technological gap with the West and a source for transfer of
know-how, managerial, marketing and other skills.
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Transfer and dispersion of skills
GM is a quality player and
has contributed enormously to developments within the auto sector through its
operation in Togliatti with Avtovaz and EBRD and in setting up the first
national sales company in 2000 which was followed by other OEMs. The Project
will channel international best-practice techniques and know how as well as
crucial managerial, organisational, financial, environmental protection and
other skills into the Russian automotive sector well beyond the boundaries of
the project entity itself. GM will employ and train 1,000 employees in St.
Petersburg who will be skilled and available to skill up the Russian
automotive industry.
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Expansion of markets in other sectors
This Project will also
provide linkages with suppliers and distribution and after-sales companies. A
larger cluster of foreign OEM’s in St. Petersburg will also attract
internationally qualified suppliers. The natural movement to reduce cost will
be localising larger items with local suppliers. The Russian auto component
manufacturing industry is highly concentrated and there has been little money
available for R&D and upgrading production facilities. This situation is
slowly changing as the proportion of components sourced locally is gradually
increasing. The Russian Government seeks to motivate auto manufacturers to
source domestically. The Project will channel otherwise inaccessible
international best practice technologies and know-how as well as crucial
managerial, organisational, marketing, financial, environmental protection and
other skills into the Russian automotive sector beyond the boundaries of the
Project. The recipients of this technology and skill transfer will be the
Company and the existing and new suppliers and client companies of the Project
who will benefit from new procurement standards set by the Company and from
technological linkages including supplier tooling and training programmes.
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The client:
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LLC General Motors Auto (“Company”), a limited liability company organised in
the Russian Federation, a 100% indirect subsidiary of General Motors
Corporation, a company organised in Delaware, USA (“GM” or the “Sponsor”).
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EBRD finance:
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The Bank will arrange up to USD 150 million senior secured A/B loan (the
“Loan”), of which up to USD 120 million will be syndicated to commercial
bank(s).
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Total project cost:
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USD 300 million.
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Environmental impact:
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The result of an Initial Environmental Examination (IEE) concluded that the
proposed project is unlikely to be associated with significant environmental
issues and the project was therefore screened B/0. An Environmental Analysis,
including an environmental assessment by independent consultants; a site visit
by the Bank’s Environmental Specialist along with relevant counterparts at GM,
confirmed that all of the new production facilities will be constructed and
operated to GM’s high environmental standards and will be in compliance with
similar plants in Europe and best international environmental practice. New
plant and equipment, produced to EU standards, will be commissioned under the
supervision of GM and new passenger car production facilities will meet EU
environment and health and safety regulations. All environment and safety
standards for vehicles, including vehicle emissions and fuel efficiency will
meet EU and GM standards. General Motors also sets very high environmental,
health and safety standards for its suppliers. An environmental action plan
(EAP) is being developed by GM and includes the implementation of an EMS (ISO
14001); design and implementation of VOC abatement and any other operations
falling under EU IPPC requirements. The Environmental Impact Assessment (OVOS)
process has been completed and the Company are currently awaiting the final
approval from the City Environmental Authorities.
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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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Richard Swando
E-mail: richard.swando@ru.gm.com
Website: http://www.generalmotors.ru/
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EBRD contact:
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Dmitry Loginov, Operation Leader: loginovd@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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