The major shareholders of the Bank are three Moscow entrepreneurs, Messrs. Svetakov, Galin, and Truskov, who collectively and severally hold 78% of the Bank’s shares. They are also shareholders of a holding company of the same name, which is active in import of consumer electronics, production of consumer goods, real estate development and other sectors. The remaining 22% of the shares are held by Mr. Kosolapov (Executive Director of Absolut Group), IFC, and Mr. Serdtsev (the First Deputy Chairman of the Management Board).

IFC will provide a seven-year unsecured subordinated loan of up to $30 million.

30.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	30.0

* These investment figures are indicative

Absolut Bank is headquartered in Moscow and has a network of 38 branches and outlets in Russian regions. The Bank plans to open new branches to be strategically present in 20 key Russian regions by 2008.

The project is expected to have a significant development impact:

- SME and retail clients will have increased access to finance as a result of the Bank’s growing portfolio in these areas.
- Individuals will have increased access to housing finance as a result of the Bank’s growing mortgage portfolio.
- Retail customers in the regions will have greater access to finance, as the Bank builds its regional branch network.

IFC’s unique role in the proposed project will be:

- provision of long term funding, which is still a scarce resource in the market;
- provision of housing finance technical assistance, and
- provision of corporate governance advice.

Moreover, the proposed subordinated loan is expected to be catalytic for further fund raising by the Bank. IFC shareholding position together with the proposed subordinated loan will enable the Bank to:

- increase mobilization of private deposits via its growing branch network;
- tap local and international debt markets for funding; and
- mobilize syndicated loans.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

Based on Absolut Bank’s portfolio, the Applicable Requirements include the IFC FI Exclusion List and the applicable National Social and Environmental Laws and regulations.

As an existing IFC client, Absolut Bank has implemented an SEMS and provided regular annual environmental performance reports. As the proposed project will apply IFC’s revised social and environmental requirements, IFC will review the existing SEMS and suggest Supplemental Actions, if required, to address any gaps.

Based on the review, the project will be required to:

- Upgrade, if necessary, its existing SEMS, prior to disbursement to the satisfaction of IFC.
- Commit to implement the SEMS, to ensure that its investments/activities are in compliance with the Applicable Requirements.
- Commit to take action to remedy any gaps in SEMS implementation on an ongoing basis.
- Continue to submit periodic reports to IFC as per a format to be provided by IFC.