Washington, D.C., December 21, 2005—The
International Finance Corporation, the private sector arm of the World
Bank Group, will provide a medium-term loan of US$50 million to TAM Linhas
Aereas, to increase its services and improve its fleet. This will be IFC's
first financing in the Brazilian airline sector.
IFC’s financing will consist of a US$33 million revolving credit facility
for pre-delivery payments (PDPs) towards the purchase of Airbus A-320 family
aircraft and a US$17 million working capital loan for aircraft parts.
TAM’s network and expansion is geared towards providing safe, efficient
and cost-effective service to its passengers. By providing more frequent
flights and more direct flights to many destinations in Brazil, and by
substantially reducing the cost of air travel within Brazil, TAM has played
a significant role in furthering business travel and inter-regional business
“We are very happy to participate in this important financing of TAM,
an airline that has greatly contributed to the development of Brazil’s
air passenger service and to the regional integration of Latin America’s
air transportation networks,” said Francisco A. Tourreilles, director
of IFC’s Infrastructure Department.
Recent IFC’s financings in the airline sector in the region include TACA
in El Salvador, Lan in Chile, and Copa in Panama.
Atul Mehta, IFC’s Director for Latin America and Caribbean, also noted,
“This financing shows IFC’s commitment to provide long-term and stable
funding diversification to Brazilian companies. It also fits the Corporation’s
strategy in Brazil, which places significant emphasis on encouraging private
sector investment in infrastructure as a means to stimulate economic growth.”
“IFC’s financing honors our commitment to offering best services, competitive
prices and optimized costs, with a modern fleet, maintaining excellence
and intensive leading edge training”, said Marco Antonio Bologna, TAM’s
IFC in Brazil
During fiscal year 2005, Brazil received the largest amount of IFC financing,
in dollar value, among Latin American countries. IFC invested $591million,
including $190 million in syndications, in sectors ranging from agribusiness
and transportation to manufacturing and the financial sector. IFC’s total
portfolio in Brazil was $913 million at June 2005.
IFC's strategy for Brazil focuses on enhancing clients' prospects for competitiveness
and growth, improving the country's social equity through voluntary actions
by the private sector, and continuing to promote sustainability.
These priorities entail investing in growing, export-oriented companies;
helping Brazilian companies expand internationally (including through South-South
investments); emphasizing infrastructure and logistics, notably public-private
partnerships that expand services to poorer people; and helping build financial
and capital markets. IFC also seeks to finance firms committed to environmental
and social sustainability, to help improve corporate governance, and to
support microfinance and socially-oriented entrepreneurship. Since 1956,
when Brazil joined IFC, the Corporation has provided $7.45 billion, including
syndications, for 162 companies.
The International Finance Corporation is the private sector arm of the
World Bank Group and is headquartered in Washington, D.C. IFC coordinates
its activities with the other institutions of the World Bank Group but
is legally and financially independent. Its 178 member countries
provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment
in developing and transition countries, helping to reduce poverty and improve
people’s lives. IFC finances private sector investments in the developing
world, mobilizes capital in the international financial markets, helps
clients improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of FY05 was
$19.3 billion for its own account and $5.3 billion held for participants
in loan syndications. For more information, visit www.ifc.org.
The largest Brazilian domestic airline with a 43.8% domestic market share
in October 2005, TAM currently operates 435 daily flights to 44 cities,
and serves 29 other cities via regional domestic alliances. With
its extensive domestic network and direct connections to important business
destinations in South America, Europe and the United States, TAM has played
a significant role in building and strengthening regional transportation
infrastructure, and promoting increased business flows into and within
Brazil. For more information, visit www.tam.com.br