22552 - Brunswick Rail Leasing

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Summary of Proposed Investment

Project Number

22552

Company Name

Brunswick Capital

Date SPI Disclosed

Nov 18, 2005

Country

Russian Federation

Industry

Infrastructure

Projected Board Date

Dec 19, 2005

Status

Completed

Sector

Rail Transportation

Department

Gbl Infrastructure & Natural Resources

Environmental Category

B - Limited

Previous Events

Approved : Dec 29, 2005
Signed : Dec 30, 2005
Invested : Mar 31, 2006

Project Description

Brunswick Rail Leasing (BRL Russia or the company) is a Russian registered company formed in 2003 to provide railcar operating leases in Russia and neighboring broad gauge countries. BRL’s business model is based on acquiring railcars and leasing them to large industrial or transport companies on a long-term operating lease basis. The first stage of BRL’s operating plan consists of purchasing approximately 10,000 railcars for a total cost of $500 million to serve clients with whom BRL has signed lease agreements or is in contract negotiations (the “Project”). At the end of September 2005, BRL had purchased 3,060 railcars through the capital provided by its shareholders and is now seeking debt financing to fund the remainder of the project.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	37.50
Equity	7.50

Development Impact

Development Impact:
The proposed project would play a significant role in attracting investment to the privately owned segment of the Russian railway system, and provide a strong demonstration effect of the benefits of further private sector participation in the sector. IFC’s investment will also provide a critical injection of finance, experience and credibility to an industry that will play a key role in removing bottlenecks to Russian economic growth in the coming decade, which in turn will improve the quality of railcars used in the country and provide an alternative to renting from the state-run rail monopoly.

IFC Role: IFC’s three-fold role in the project includes:
- providing long-term debt in a market where local banks generally do not provide tenors longer than four to five years;
- acting as a catalyst for attracting other international lenders to the project; and
- validating the long-term operating lease concept as a means of financing non-oil tank railcars in Russia.

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 impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information submitted by the company. The following potential environment, health and safety impacts of the projects were analyzed:

- hazardous materials management;
- emergency preparedness and response;
- maintenance-related effluent and waste management; and
- employee health and safety.
Location of environmental documents In locally affected community
Environmental documentation will be made available at the following location :

Entrance foyer
Bashnya na Paveletzskaya
Paveletzskaya Plashod 2/2
Moscow 115054, Russia

Contacts

For Inquiries About the Project, Contact

Elina Kopets
Senior PR Consultant
Point Passat
Ulitsa Letnikovskaya 10, building 7
Moscow, Russia 114115
+7 095 795-0900 telephone
+7 095 795-0982 fax
ekopets@pointpassat.ru.

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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