An equity investment to finance the development of Iveco Ukraine, a company to be established in the automotive industry, which will operate through two plants, both located in Ukraine. The project aims to strengthen the local production of commercial vehicles and to help it expand into the manufacturing of diesel engines, gearboxes and vehicle components. The Bank’s proceeds will be used to finance capital expenditure and working capital.
The project will support foreign direct investment in the modernisation of the automotive industry in Ukraine. It will also promote market expansion through: (i) the development of a sale and service network; and (ii) the introduction of local manufacturing of western European engines, gearboxes and vehicle components.
Iveco Ukraine would be created by merging two existing joint ventures (Iveco Kraz and Iveco Motor Sich). Both are involved in the automotive industry in Ukraine and controlled by Iveco SpA, a leading European manufacturer of commercial vehicles ultimately fully owned by Fiat SpA.
US$ 21.12 million (EUR 20.3 million) ordinary equity investment in Iveco Ukraine.
US$ 85.4 million (EUR 82.1 million).
The project was screened B/1, requiring an environmental audit and analysis. An environmental audit and baseline assessment was undertaken by international environmental consultants to determine the extent of environmental and health and safety risks and liabilities associated with the existing facility and future operations. An environmental specialist from EAU also visited Iveco’s HQ to discuss the company’s corporate environmental policy and procedures, particularly in relation to the environmental issues associated with vehicle engine standards and emissions. Based on the information provided by Iveco and Motor Sich, and the outcome of the site evaluation, no significant environmental or health and safety issues were identified and there were no potential liabilities arising from compliance with environmental regulations. Positive environmental benefits include the following:
- compliance with both local and EU environmental requirements will be achieved;
- worker health and safety policies and programmes have been established in accordance with Iveco corporate standards and in line with existing European Union standards and directives;
- the new operations will provide Ukraine commercial vehicle industry with engines and gear transmissions systems capable of reducing fuel consumption by 10 to 15 per cent;
- the introduction of new models of engines will have a direct and immediate impact on the improvement of fuel efficiency and reduction of exhaust emissions, particularly CO2, volatile organic compounds (VOCs) and particulates and will assist Ukraine vehicles in meeting EU standards for vehicle emissions;
- Motor Sich is already committed to the implementation of ISO 14001 international environmental management system, which will be extended to the new joint venture.
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