OREANDA-NEWS. April 07, 2008. The European Bank for Reconstruction and Development is providing a total of ?52,5 million in debt and equity financing to support the construction of a Greenfield bottling plant in the southern Russian region of Krasnodar by Turkey’s largest glass packaging company, Sise ve Cam Fabrikalari A.S., reported the press-centre of EBRD.

The new plant, which is to be situated in the town of Krymsk, about 40 km from the major Black Sea port of Novorossiysk, will employ some 450 people and will, when completed, produce 240,000 bottles a year, allowing the group’s bottling facilities in Russia to overtake production by its plants in Turkey, where it is the market leader.

The group’s three existing Russian bottling plants, two of which are EBRD-funded, already have a total annual production capacity of three billion glass bottles, about a third of what is produced by the whole sector in Russia.

The EBRD is providing a seven-year loan of ?37,5 million and will also strengthen the project’s capital structure through a ?15 million equity investment. The Bank will be the lender of record for the full ?37,5 million under an EBRD A and B loan structure – with the Bank taking the ?11,2 million A loan onto its own books and syndicating the remaining ?26,3 million to commercial banks as B loan. The maturity of both portions will be the same.

The new plant, which is being built at a total cost of ?75 million, will be the main source of glass bottles for Southern Russia and the North Caucasus with its lightweight glass bottles targeting the wine and beer sectors. Demand for bottles in the area is growing due to the development of the wine business in Krasnodar region, the sparkling wine producers in the Central Volga region and the mineral water sources of the North Caucasus.

As part of the loan agreement, the borrower has agreed to implement over a five-year period an Environmental Action Plan, which will be monitored by the EBRD. The plan calls for the installation of electrostatic participators whose task is to cut pollution by reducing emissions of fine particles. The borrower is Ruscam-Kuban, a company created to own and operate the new plant. The company will be controlled by Turkey's Anadolu Cam, in which Sise ve Cam Fabrikalari A.S. has a majority stake.

In the agribusiness sector alone, the EBRD has committed ?4,9 billion in 354 projects across central and Eastern Europe and the Commonwealth of Independent States.