Founded in 1955, Arcelik, the project's sponsor, is now an established leader in Turkey's home appliance sector and is one of the Koc Group’s flagship companies. In 2002, Arcelik’s consolidated sales amounted to about $1.5 billion. International revenues account for approximately 50% of this amount. The sponsor’s asset base at the end of 2002 was $1.2 billion. Arcelik’s is 57% owned by the Koc Group companies, and 20% of the project sponsor belongs to the Burla Group. The remaining 23% of Arcelik’s stock are public. Public shares are traded at the Istanbul Stock Exchange. Arcelik currently owns approximately 91% of Arctic’s stock. The remaining project company’s shares are widely dispersed among a large number of minority shareholders.

The total project cost is estimated approximately at $50 million. The proposed IFC investment consists of an A loan for IFC's own account of up to $25 million equivalent.

17.60 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	17.60
Equity

* These investment figures are indicative

Established in 1970, Arctic’s only 50,000 square meter site is located on the outskirts of Gaesti, a town with a population of approximately 17,000 people. Located approximately 70km from Bucharest, Romania, it serves as the headquarters for the project company. The project investments involving the purchase and installation of tangible assets will be made at this site.

This is a category B project according to IFC’s Procedure for Environmental and Social Review of Projects, because a limited number of specific environmental and/or social impacts may result which, can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.


Location of environmental documents in locally affected community
A translation of the ERS will be available at the local Municipal Office (down the street from the plant) and the plant gate where the workers access the facility. Address: 210, 13 Decembrie st. 0150 Gaesti- Romania

The project will allow a transfer of Arcelik’s advanced production technologies and top-notch managerial expertise to a Romanian company. The project will contribute to Romania’s export promotion efforts, with its significant focus on international sales, The project will enhance the viability of a major regional employer, which currently provides jobs for approximately 1,400 people. Additional jobs and new business opportunities will be created or preserved throughout Arcelik’s and Arctic’s value chains, which include suppliers of raw materials and outsourced components as well as providers of transport, installation and after-sales services both in Turkey and Romania. Significant synergies will be created as a result of Arcelik’s and Arctic’s coordinating and sharing their value chains. Further, progressive component localization will help develop ancillary engineering and component businesses contributing to SME development in Romania. Finally, the success of this project would provide a demonstration effect, which will encourage more foreign direct investment into Romania. IFC’s role in the project is the following: to facilitate an acquisition of a local company by a strong international strategic investor in a country where the investor considers a multilateral institution’s support important; to provide long term financing for a project in a country where such financing is scarce and rarely available except for IFC and other development banks; to stimulate investment into Romania; to support sustainable job preservation efforts; to help a local producer become a focal export center for Europe, and increase its foreign currency earnings; to continue leveraging a strong Part II country client relationship to support a successful project in a difficult environment; to demonstrate funding a business that is committed to the principles of transparency and sound corporate governance.