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EBRD and Stora Enso in regional cooperation deal
€240 million multi-project loan for Swedish-Finnish group
The European Bank for Reconstruction and Development is extending a €240 million multi-project loan facility to Stora Enso Oyj, the world's largest paper and board manufacturer, to support the development of more modern and efficient production methods in the forest-products industry across central and eastern Europe and the former Soviet Union.
The deal breaks new ground in several areas. The EBRD has syndicated €140 million of the facility to Nordea Bank Finland PLC, Skandinaviska Enskilda Banken AB and Svenska Handelsbanken AB under its A/B loan structure - the first ever syndication under an EBRD multi-project facility.
Moreover, the first project under the facility will be the EBRD's first direct loan to the Russian forestry sector - for the construction of a sawmill near the Finnish border. It will be the first foreign direct investment in the sawn-wood industry in the Russian province of Karelia, and will be financed by a nine-year, €6 million EBRD loan, of which €3 million will be syndicated to the participating banks.
Noreen Doyle, First Vice President of the EBRD, said the facility illustrates the Bank's strategy of attracting foreign strategic investors capable of playing a major positive role in the modernisation and restructuring of key sectors across the region, such as forest products.
At a signing ceremony in London also attended by Stora Enso CEO Jukka Härmälä, Ms Doyle added that the Karelia sawmill deal alone sends an important signal to the market that a leading international player is now changing its practice from only exporting raw logs from Russia to outsourcing processing facilities to Russia.
The multi-project facility is intended to speed the processing of further projects for Stora Enso across the region in the coming years.
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