Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.
- Project name
- Can-Pack (Ukraine) Ltd.
- Project ID
- Fiscal year
- Guarantee holder
- Investor country
- Host country
- Environmental category
- Date SPG disclosed
- May 13, 2008
- Project Board date
- June 17, 2008
- Gross exposure
- $21.0 million
- Project type
|Date SPG disclosed||May 13, 2008
|Projected Board date||June 17, 2008
MIGA has issued guarantees totaling $21.04 million to Can-Pack S.A of Poland covering its equity investment, shareholder loan, and management contract with Can-Pack (Ukraine) Ltd. The coverage is against the risks of transfer restriction, expropriation, and war and civil disturbance. The equity investment and management contract will be covered for a period of up to ten years. The duration of the coverage under the shareholder loan will be four years.
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). MIGA’s coverage is being modified to cover an increase in the equity investment, a management contract with the project enterprise, and the issuance of a new shareholder loan to the project.
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 to 2,400—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.—through subsidiary Can Pack Ukraine Ltd.—is the largest producer of beverage cans in Ukraine and fourth largest beverage can producer in Europe. 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 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.