The EBRD is lending Ukraine’s largest steel company, Mittal Steel Kriviy Rih, US$200mn to help upgrade technology, boost productivity and become more energy efficient.

The bank will make a seven-year loan to Mittal Steel Company, which bought a 93% stake in the Ukrainian company in November 2005. The entire sum will be on-lent to the Ukrainian subsidiary.

By participating in this project, the EBRD is demonstrating its support for a transparent and successful privatisation and the introduction of international business management practices in Ukrainian companies, says Olivier Descamps, business group director for southern and eastern Europe.

The loan will also help strengthen the local economy, increase steel production, improve competitiveness and standards within the country’s steel sector, and significantly boost energy savings, he adds.

The latter is especially important given that Ukraine remains one of the most energy-intensive countries in the industrialised world and its steel sector needs significant investment to comply with modern requirements of energy efficiency.

It will also reduce the use of natural gas at the Kriviy Rih facility, thus contributing to the energy diversification strategy of Ukraine.

The loan builds on previous cooperation between the bank and Mittal Steel in EBRD’s countries of operations. As well helping the company turn around ageing and financially weak plants in Kazakhstan and Romania, last year the bank provided Mittal plants in Bosnia and Herzegovina and in FYR Macedonia with loans to improve, among other things, energy efficiency.