OREANDA-NEWS. On May 19, 2008 in a transaction inaugurating a new fast-track facility for medium-sized projects in some of its countries of operation, the European Bank for Reconstruction and Development has invested ?1 million in an Austrian firm’s first Russian production facilities being built in the country’s Vladimir region, reported the press-centre of EBRD.

The ?50 million facility, which involves a streamlined approval process, is available for smaller projects than those usually financed by the Bank and targets a new clientele of medium-sized private companies. Approved by the EBRD Board of Directors last March, the facility aims to fill a gap in the market by offering equity funding, as well as mezzanine and subordinated debt to such firms.

The first project involves acquiring a stake of 25 percent plus one share in OAO Senoplast Rus, a subsidiary of the privately-owned Senoplast Klepsch & Co. GmbH. Founded in 1956 by Mr Wilhelm Klepsch, Senoplast specialises in the production of advanced semi-finished plastic materials typically used in the manufacture of car body parts, ski cases, furniture, refrigerators and sanitary ware. Based near Salzburg, it exports 95 percent of its annual output of 42,000 tonnes.

The EBRD’s presence in the capital of this new venture is a demonstration of the Bank’s strong support for Senoplast, its good environmental record and its Russia strategy, said Varel Freeman, the EBRD’s First Vice President. We are proud to pioneer a simplified form of funding for medium-sized companies in our countries of operation and thus show the market how this financing can make sense, he added.

Senoplast is building its first production line in Kovrov in Russia’s Vladimir region and in its first phase this project is scheduled to focus on producing thermoplastic sheets for the sanitary ware industry. Senoplast has been exporting to Russia since 1989 and local production will enable it to lower transport costs and customs tariffs as well as gain market share by being closer to Russian consumers.

This new source of EBRD funding, known as the Facility for Medium-Sized Projects, offers finance in amounts ranging from ?1 million to ?10 million in countries not covered by similar Bank initiatives.

Kazakhstan, Russia and Ukraine are the only countries where foreign investors, as well as local producers, can benefit from this EBRD facility. It is also available to local firms only in Croatia as well as nine EU members which are EBRD countries of operation, Bulgaria, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.