Intesa Sanpaolo has signed a €76.6mn loan for Safwood, one of the leading Italian wood product producers, and its Russian subsidiary.

The facility is to finance a greenfield plant being constructed in the Russian Republic of Komi for the production of wood panels.

The panels are oriented strand board (OSB), an engineered wood product. Safwood is one of the leading producers of this type of wood and has been active in Russia for over a decade.

The facility combined equity and export credit-backed facilities, and was supported by the Italian export credit agency (ECA), Sace, and Simest, the Italian development finance institution designed to promote the activities of Italian companies abroad.

The local Russian government has a 25% share in the project.

The loan package was announced during entrepreneurial mission in Russia led by the Italian minister of economic development Claudio Scajola and organised by Italian agencies Confindustria, ICE and ABI. A delegation from Intesa Sanpaolo also attended, and this was led by Gaetano Miccichè, head of corporate and investment banking division, Antonio Fallico, president of KMB Bank and Zao Banca Intesa, and Gregorio De Felice, chief economist of Intesa Sanpaolo.

Intesa Sanpaolo acquired a 75% stake in KMB Bank in 2005 and since then has developed its own commercial network in Russia with 89 branches over 25 regions between Kaliningrad and Vladivostock.

The bank has managed to capitalise on the trade flows between Italy and Russia and according to Italian foreign exchange office data for the first half of 2008, the bank had a share of over 38% in terms of the brokerage of trade volumes between the two countries.