Ipek Paper Expansion

completed

Summary Of Project Information (SPI)Project NameTurkey- Ipek Paper     RegionEuropeSectorProject No008931Projected Board DateApril 30, 1998Company NameIpek Kagit A.S.Technical Partner and/or Major Shareholders Major shareholders are Eczacibasi Holding of Turkey and Fort James, U.S. Project Cost Including proposed IFC investment Total project cost is US$90 million equivalent, including up to US$32 million for IFC and up to US$18 million in a B Loan syndication.Location of project and Description of site Ipek is Turkey’s leading tissue paper manufacturer. Ipek’s current total paper production capacity is 37,000 tons per year with two paper machines. Ipek proposes to add a third paper machine of about 50,000 tons per year at its existing tissue mill in Karamursel, an industrial site located about 100 km from Istanbul. The Project would thus increase Ipek’s total tissue paper capacity up to 87,000 tons per year. The new paper machine is expected to be operational in the first half of year 2000.     Description of Company and Purpose of Project The proposed project will assist a second tier company in Turkey. Through the proposed quasi-equity investment, IFC will assist the Company in taking the first steps towards its eventual public offering, an important step in developing the country’s capital markets. The project provides an opportunity to support a growing company which would otherwise have no access to adequate long-term financing at reasonable terms. The availability (in terms of volume) and suitability (in terms of rate and maturity) of local long-term financing for the proposed expansion project would be very limited. Without IFC’s investment, Ipek would be forced to postpone the project or rely on expensive short-term financing. Furthermore, IFC’s participation is expected to be a catalyst to obtaining additional financing through an international syndication.      Environmental Category and Issues This is a category B project according to IFC’s environmental review procedure. The environmental issues associated with this project include: air emissions, treatment of process and domestic wastewater, and solid waste disposal. Health and safety issues include fire prevention and protection, emergency response and employee exposure to noise, dust and chemical substances. The Company has a waste water and sewage treatment plant. Based on a review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Ipek''s proposed project will meet applicable World Bank guidelines. Before disbursement, the Sponsor will submit a corrective action plan on stack emissions and liquid effluents, if necessary, to assure compliance with all World Bank guidelines in these respects.     The is March 31, 1998 from the Public Information Center.Date SPI sent to PIC      March 30, 1998“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 974-4384Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).