The Ksani II

completed

The proposed investment is a $10 million loan in Joint Stock Company Mina (“Ksani”or “the company”), a manufacturer of glass containers for food and beverages, located in Georgia, and owned by Turkiye Sise ve Cam Fabrikalari A.S. (‘Sisecam’ or the ‘Group’). The investment will be used to support: (i) installation of a new furnace (“Second Furnace”) to increase capacity from 30 thousand tonnes/year (tpa) of glass, to 60 thousand tpa; (ii) improvements in energy and resource efficiency; (iii) improvements in Ksani’s operational efficiency through renovation and equipment upgrades; and (iv) long-term working capital financing (the “Project”). Sisecam was established in 1935 by Isbank, one of the largest commercial banks in Turkey. Sisecam is among the 12 largest glass producers in the world with 3.5 million tons of production capacity, and is organized into four main subsidiaries split along four business lines: Trakya Cam (flat glass), Pasabahce Cam (tableware), Anadolu Cam (glass packaging) and Soda Sanayii (chemicals). IFC has a long-standing relationship with Sisecam developed over 40 years in Turkey, Russia, Bulgaria and Bosnia (53 % outside Turkey). At present IFC has equity in the Group, loans to several of the Group’s subsidiary glass companies, and to Soda Sanayii, a soda ash manufacturing subsidiary located in Lukavac, Bosnia Herzegovina. Ksani was established in 1987 as a Georgian Joint Stock Company and for many years was the leading producer of glass containers in the Caucasus region. However, in 1995 it shut down due to operational and financial issues. In 1999 Sisecam acquired a 76% interest in Ksani as part of the Georgian Government''s privatization program. With the financial support of IFC and EBRD, Ksani undertook an expansion and modernization program (including a new furnace) to restart the production of glass bottles for cosmetics, mineral water, wine and other beverages. In the mid 2000s, Ksani encountered market difficulties and consequently in July 2008 the company took the decision to stop its older furnace which dated from the Soviet era. With the recent improvements in the political situation in the region demand for Ksani’s products has significantly improved and the company is installing a new furnace (the “second furnace”) to double capacity and take advantage of the favorable market outlook. Commissioning of this furnace was ongoing at the time of the site visit in March 2014.