The telecommunications firm became the first Russian legal entity to receive what amounts to a regular bank loan from an international financial institution, according to Ron Freeman, the EBRD's merchant banking vice president.
The EBRD, as well as the Export Import Bank of the United States and the German Hermes export insurance agency, have previously only underwritten projects on the security of a government or commercial bank guarantee.
The EBRD 5-year loan, however, was made without recourse either to the Russian government or Sovintel's U. S. partner.
Freeman said, "With the structure of this loan the EBRD confirms its willingness to finance commercial enterprises in Russia without government or other guarantees".
Sovintel, owned by the Communications Ministry and a U. S. partnership of GTE Spacenet and San Francisco/Moscow Teleport, will use the funds to extend its international telephone and data network, with a move to cities outside Moscow as the next big step.
Tony Kuczura, Sovintel's acting
director, said the fact that the EBRD had made'a normal bank loan to Sovintel showed the company was emerging as an independent business unit without the need for cash or guarantees from its parent organization.
Kuczura says Western firms will need an alternative phone system for many years to come.
The problems in the Soviet phone system are so great, including lead cables and electro-mechanical switches dating back to the 1950s, that it would take 10 years to reach acceptable standards for business use.
Sovintel employs 60 Russian staff. many trained in the United States. Its network now links about 100 Western businesses to the outside world.
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