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The EBRD and UniCredit Group Are Supporting a Kazakhstan Mining Operation

World Trade – Finance
Open Eyes Opinion {source : EBRD/Svitlana Pyrkalo}

Major cross-border investment will bring top technologies to mining of important metal

The EBRD and UniCredit Group are supporting a major cross-border investment which will enable a mining operation in western Kazakhstan to make its operations more efficient and allow it to keep importing best technologies and equipment.

The US$ 260 million financing facility has been jointly arranged by the EBRD and UniCredit for the benefit of Kazakhstan’s Voskhod Chromium, a subsidiary of Turkey’s Yildirim Group. The facility will consist of two portions: the EBRD will provide US$ 130 million for its own account (known as the A-loan), and an equal amount will be provided by UniCredit Group (in the form of a B-loan).

The loan agreement has been signed in London in the presence of EBRD President, Sir Suma Chakrabarti; the Prime Minister of Kazakhstan, Karim Massimov; and senior representatives of UniCredit Group.

Sir Suma said during the signing: “We are pleased to support this operation together with UniCredit and to contribute to the expansion of Yildirim Group into a new market. We are also proud to cooperate with the government of Kazakhstan, represented here by the Prime Minister, Karim Massimov, on the reform of natural resources legislation, specifically subsoil use legislation, which will bring it in line with international standards.”

The EBRD Managing Director for Energy and Natural Resources, Riccardo Puliti, signed the agreement on behalf of the Bank. He said: “This is the EBRD’s first transaction in the chromium sector. Chromium, which makes steel “stainless”, is an essential material in the world today. We are pleased to support Yildirim in this cross-border investment especially as the Voskhod Chromium project is expected to have a transformational effect on the operations of the mine by introducing new technologies and practices into Kazakhstan for the first time.”

Yuksel Yildirim, President and CEO of Yildirim Group, said: “We are excited to complete the financing of Voskhod with the EBRD which is a key milestone for our chromium operations. This transaction will also pave the way for our growth plans in Kazakhstan.”

Gianfranco Bisagni, Head of Corporate and Investment Banking, Central Eastern Europe, and Deputy Head of the CEE Division, said: “UniCredit is pleased to have structured and arranged, jointly with the EBRD, the first international syndicated loan for Yildirim Group. Through the project financing structure we were able to support a 12-year financing tenor.”

The financing will be used by Yildirim Group to restructure the Voskhod mine and improve its efficiency and competitiveness while reinforcing the overall environmental and operational health and safety standards. The plan also includes the acquisition of new mining equipment from world-class manufacturers, the expansion of facilities and intense underground mine development works.

On the day of the signing, in a separate event, the EBRD hosted a meeting of the Mining Subgroup of the UK-Kazakhstan Intergovernmental Commission, created after an agreement between the UK Prime Minister and the President of Kazakhstan to support cross-border investment and business cooperation between the two business communities.

Both recent and anticipated changes in the subsoil use legislation were discussed by delegates including the Minister of Investments and Development of Kazakhstan, UK Trade and Investment and UK Export Finance agencies, and mining and service companies which are active or are considering investment opportunities in Kazakhstan.

To date, the EBRD has invested about US$ 7 billion into various sectors of the economy of Kazakhstan, with investments in 2014 alone reaching a record level of about US$ 700 million.
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