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Russia's auto manufacturer GAZ receives second EBRD loan
To finance the purchase and installation of new facilities for the Volga passenger car, the only medium-sized family saloon car produced in Russia, the European Bank for Reconstruction and Development (EBRD) is extending a US$ 65 million (ECU 52 million) loan to GAZ, an open joint-stock company and one of Russia's major car and truck manufacturers.
The loan agreement was signed today by Jacques de Larosière, the EBRD's President, and Nikolai Pugin, President of GAZ, at the EBRD Headquarters. "With trade barriers being lowered and competition from imported cars increasing, GAZ has had to develop a better-quality Volga to compete with foreign models," said Mr de Larosière. "Russia needs more industrial success stories and we are happy to support GAZ, which represents one of these successes in today's new Russia."
Russia's Avtobank is providing US$ 15 million (ECU 12 million) to GAZ as part of a parallel financing facility with the EBRD.
The new facilities, which include a body assembly plant as well as paint and trim facilities, will allow GAZ to increase the quality and reliability of the car as well as the company's flexibility in producing different models of the Volga and other similar sized passenger cars, including foreign models.
The EBRD's first financing to GAZ in December 1995, a US$ 20 million (ECU 15.6 million) loan to finance the purchase and installation of a new painting facility, has been fully disbursed.
GAZ currently produces 125,000 cars a year as well as 75,000 GAZelle light commercial vehicles (1.5 tonne trucks, minivans and minibuses) and 12,000 medium-sized (4.5 tonne) trucks. It employs over 100,000 workers in Nizhny Novgorod.
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