The proposed transaction would involve a US$ 5.4 million investment by the EBRD in Ukraine International Airlines to support the development of its routes between Ukraine and western Europe. After a decade of recession, the Ukrainian economy will post an estimated 3 per cent GDP growth in 2000. UIA requires new equity to be able to take advantage of the related growth in air traffic.
The investment will support market expansion and foster competition between UIA and the major European airlines.
Ukraine International Airlines (UIA) is the leading provider of passenger and cargo flights between Ukraine and western Europe and is majority owned by the State Property Fund. SAir Group (the parent company of Swiss Air) and Austrian Airlines are the sponsors of the project and have minority shareholdings in UIA. The sponsors have been very active in transferring knowledge to UIA for network, flight and ground services.
The Bank is proposing to subscribe to a capital increase for US$ 5.4 million in the form of preference shares. The Bank will hold 10 per cent of the share capital of UIA.
US$ 5.4 million (€6.5 million).
The project was screened as B/0 requiring an environmental analysis. This was carried out based on the EBRD environmental, health and safety questionnaire for airline projects. The analysis confirmed that the company is in compliance with Ukrainian environmental and safety standards. Since UIA operates flights to Western European countries, it needs to comply with the relevant EU environmental and safety standards and international aviation regulations for noise and air emissions, and transport of dangerous goods. The Company is implementing two programmes, Fuel Management and Engine Management, which result in reduced fuel consumption, air and noise emissions.
UIA currently operates two Chapter 2 aircraft, which will need to be replaced by 2002 with less noisy and more modern aircraft, which will need to be replaced by 2002 with less noisy and more modern aircraft. Specially trained personnel carry out handling and transport of dangerous cargo in full compliance with international aviation regulations. All staff receive training in health and safety in accordance with Ukrainian and international aviation regulations.
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