The U.S. corporation OPIC has for the first time invested funds in the development of Russian leasing. A credit of $30 million has been paid out to the leasing company Europlan, which is managed by Baring Vostok Capital Partners. With these funds Europlan plans to develop leasing of commercial real estate and vehicles.
Europlan and OPIC said in a joint statement that the credit has been provided for seven years. According to Europlan representative Nikolai Volyansky, the credit will be used to finance deals for small and mid-sized businesses to lease equipment. The company is not disclosing the interest rate on the $30-million credit.
OPIC – the Overseas Private Investment Corporation – was set up as a U.S. government agency in 1971. Since the day it was founded it has financed over 3,100 projects worth over $145 billion. Over $3 billion has been invested in the Russian economy with OPIC support.
Europlan (formerly DeltaLeasing) was set up in 1999. In November 2003 the company was acquired by Baring Vostok Capital Partners from the investment group Delta Capital Management. Europlan assets amount to over $50 million, and its deals are worth an average of about $70,000. The company has carried out about 1,100 leasing projects.
This is not the first Western credit for Europlan. Other creditors include the European Bank for Reconstruction and Development, the International Finance Corporation (IFC) and U.S. Export-Import Bank. However, this is the first time OPIC has invested in a Russian leasing company.
Attracting Western funds is not a rarity for Russian leasing companies. Avangard Leasing General Director Alexander Kozhevnikov said that Western financing accounts for about 70% of the funds received by the company. According to Roman Gladkikh, deputy director of the Alfa Bank project financing department, Russian leasing companies rarely receive direct foreign credits. “Usually Western money is attracted indirectly through parent banks or companies,” he said.
Therefore, market participants have positively evaluated the OPIC credit. “It is significant for the Russian leasing market,” Gladkikh said. Kozhevnikov agrees with him. According to Gladkikh, the amount of the credit is comparable with the volume of finance for one large leasing deal. During one year on the market 10-15 such deals are signed, he said. “But if we talk about investments in retail projects) with financing levels of 200,000-500,000), this credit will allow the company to work for a year and a half,” Gladkikh said. “Given that Europlan works mainly with small and mid-sized businesses, this total is sufficient for a large number of deals,” Kozhevnikov said.
Dmitry Korchagov, general director of Baltic Leasing, a subsidiary of the St Petersburg based Industrial-Construction Bank, noted the term of the credit – seven years. He said that Baltic Leasing receives credits for up to four years. “Such a credit [as received by Europlan] is a good source of financing. Every Russian leasing company dreams about this,” he said. He said that longer credits make it possible to carry out deals involving real estate, aviation and vehicles. Compared with other sectors, these require longer payback period for leasing operations. Volyansky from Europlan confirmed that the company plans to develop these areas, particularly real estate leasing. Source: Vedomosti 10.08.2004. Pavel Miledin Back to Projects List 
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