Volga-Dnepr Airlines Established in 1990, VDA is a Russian-registered airline headquartered in Ul''yanovsk, Russia, and engaged in world-wide charter transportation of superheavy and outsize cargo. Principal cargo types transported during 2000 included aerospace equipment, humanitarian aid, heavy industrial shipments and consumer goods.     Currently, VDA operates nine Antonov An-124-100 aircraft. This is the largest freighter aircraft in the world and has unique mission capabilities, since no other aircraft can carry cargo shipments of comparable size or weight. VDA''s fleet is the largest commercial fleet of An-124-100 currently in service. The An-124-100 was developed in the Soviet Union as a heavy, long-haul military aircraft. The An-124 was first introduced in operation in 1982 and since the late 80s has been used for commercial purposes. At present, the An-124-100 is the world''s largest transportation aircraft in operation -- it is more than 50 meters long, it can carry up to 120 tons of cargo, and has a range of 5,000 kilometres with maximum payload.    The proposed project is to expand VDA''s fleet by acquiring two additional An-124-100 aircraft and four D18T engines. One aircraft will be acquired through the purchase and subsequent completion of one partially built An-124-100 airframe, currently at the Aviastar-SP Joint Stock Company (Aviastar) aircraft factory in Ul''yanovsk. VDA has a sufficient number of spare engines in stock to equip this aircraft. The second aircraft will be obtained from sources such as the secondary market or by means of civil conversion of a military aircraft. Additional four engines will be needed to equip the second aircraft.    The expansion of its fleet will allow VDA to strengthen its position as the leading airline in the international heavy and outsize air cargo market. The project will have a significant development impact by creating and retaining jobs for Russian nationals in the region, by generating hard currency for the country, and by catalysing the development of air transport infrastructure in Russia. VDAs activities have significant impact on the Ul''yanovsk region. VDA directly employs about 1,000 local residents and makes significant contribution to the regional budget. In addition, the survival of Aviastar, a producer of An-124 and the biggest employer in Ul''yanovsk to a large extend depends on the orders for spare parts and maintenance from VDA. VDA provides crucial contribution to the development of transport infrastructure in Russia. As one of the leaders in the industry VDA brings its vast international  experience and knowledge of modern industry practices to the country.     IFC will play an essential role in this project by providing long-term financing as well as by mobilizing financing from international financial markets. VDAs ability to expand its business is impaired by the unavailability of long-term financing in Russia. The US$25 million investment by IFC will provide financial support to the company at the critical stage of its development. In addition, IFC expects to mobilize US$30 million from commercial banks, bilateral and multilateral institutions, which is particularly important given the reluctance of the foreign institutions to take Russia risk following the 1998 crisis. It will also be a first example of using Russia-built aircraft as a security for loans from international financial institutions.