The proposed project consists of a corporate loan to be disbursed against equipment modernisation and energy efficiency improvements at the three plants of the Power Machines Group in St Petersburg - Leningrad Metallic Plant, Elektrosila and Turbine Blades Plant. Part of the loan would be used for pre-financing of equipment manufacturing under selected international power plant construction contracts implemented by Power Machines Group.
The loan would be the first long-term finance received by the company from a Western Bank. The Bank's funding will support a successful restructuring and modernisation of the company. The loan is a good example to follow for other large Russian enterprises in a higher value added sector of the Russian economy. The company has produced IAS accounts in 2002 and will continue to do so in future years, adhere to the Corporate Governance Code and further environmental and energy efficiency improvements. Loan syndication would introduce the company to international commercial banks and compliance with Western-style bank loan covenants.
Power Machines Group is Russia' s largest integrated producer of power generation equipment. It comprises three energy machine building plants located in St Petersburg - "Leningrad Metallic Plant", "Elektrosila", "Turbine Blades Plant", and the Moscow based engineering and sales company "Power Machines". The Group also has a stake in "Kaluga Turbine Plant" and "TzKTI" Research & Development Institute.
A 7-year senior corporate loan of up to US$ 81.5 million. The Bank will attempt to syndicate up to US$ 20 million to commercial banks.
US$ 81.5 million.
The project has been screened B/1. A preliminary environmental audit has been completed, and a draft environmental action plan has been prepared. This EAP is being updated and the sponsor has agreed to independent environmental audits of all three sites in first quarter of 2004. Based on these audits, the EAP will again be updated and implemented in full. Environmental issues identified in the audit and addressed in the ESAP to date include environmental compliance, potential liabilities associated with past environmental practices and occupational health and safety issues. Energy efficiency audit has been completed and the suggested energy efficiency investments are incorporated in the project capital expenditure programme.
The company will benefit from an energy efficiency audit, paid for by the Greek Government.
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