|Summaries of proposed guarantees are provided prior to Board consideration and final contract signing, and therefore are subject to change. Project briefs are disclosed after contract signing and do not reflect subsequent modifications (e.g., changes in guarantee amount).|
This summary covers an investment by Can-Pack S.A of Poland for a manufacturing project in Ukraine. The investor has applied for a MIGA guarantee of $21.04 million against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project involves the expansion of an existing aluminum beverage can production plant in Vyshgorod, Ukraine for which MIGA is currently providing coverage (see http://www.miga.org/projects/index_sv.cfm?pid=655 for details). The plant has been operating since 2003. The expansion of the production line will include the installation, assembly and operation of new equipment. The expansion will increase the plant’s production capacity from the current 1,700 cans per minute (cpm) to 2,400 cpm—an increase from 650 million to 950 million cans per year. To accommodate the increase in finished products and materials, a new warehouse will be built on land adjacent to the existing plant.
Can-Pack S.A. is the largest producer of cans in Ukraine. The increase in production capacity is expected to help the project company meet the growing demand for canned beverages in Ukraine and maintain its market share in the country, as well as Kazakhstan, Georgia, Russia and other CIS countries.
The project is a Category B under MIGA’s environmental review procedures. The potential adverse environmental impacts are limited in number, generally site-specific, largely reversible, and readily addressed through mitigation measures. Click here to access the Environmental and Social Review Summary.
The project is expected to create local employment during the construction and design phases of the new expansion, as well as for the operation of new equipment. The transfer of high-tech manufacturing equipment from Poland is expected to yield positive developmental benefits in the form of training for local staff, for which an annual budget of $200,000 has been allocated. The expansion is also expected to generate tax revenues of approximately $7.5 million in present value terms over 11 years of operation. Downstream effects are expected to include approximately $3.6 million in goods and services procured locally.
Improving competitiveness and supporting the modernization of production is a priority area for World Bank Group activities in Ukraine.