WASHINGTON, D.C., June 26-The International
Finance Corporation today announced approval of a US$30 million credit
line to support private enterprises in Argentina's northern provinces.
The financing will be channeled through a leading privately owned Argentine
bank, Banco Roberts, S.A., which through its regional center in Tucuman
has a strong presence in these provinces.
The project is part of a coordinated World Bank Group effort to promote
economic growth in these provinces (Tucuman, Salta, Jujuy, Santiago del
Estero, Catamarca, La Rioja, Misiones, Chaco, Corrientes, and Formosa),
all of whose performance has generally lagged behind that of Buenos Aires
province. A major aspect of this work is a special initiative the Bank
Group launched in mid-1995 to recommend solutions for re-igniting growth
in Tucuman. A joint IFC/World Bank study has been completed that diagnoses
that province's development issues and recommends new public and private
With many initial reforms now having been made in Tucuman, IFC senses that
the local business climate is good and its demand for credit high. It has
extended the Banco Roberts credit line as part of this continuing initiative
for the province.
The credit line is expected to stimulate economic and industrial development
in Tucuman and other poorer provinces by providing medium- and long-term
funding to small- and medium-sized enterprises. This financing is otherwise
in very limited supply. Its lack has historically hindered area companies
from undertaking necessary investment projects, making it difficult for
the provinces to develop a sound industrial base or fully utilize their
The credit line's sub-loans will typically be for maturities of 3-5 years,
although some may be for the full 8-year maturity of the facility. Eligible
projects will require a maximum of US$20 million of investment. IFC funds
would provide the lower of US$5 million or 50% of the total requirement
and catalyze the remainder from local sources.
The project is initially expected to finance a high number of agribusiness
projects, given the predominance of this sector in the region. It thus
compliments an earlier in-depth study of options for restructuring Tucuman's
dominant industry, sugar production, that IFC' commissioned from one of
the world's leading sugar industry firms, Booker Tate Ltd. of the UK. Many
of these recommendations are now being implemented. They are expected to
enhance the local sugar industry's competitiveness vis-a-vis future imports
anticipated from Brazil as part of the Mercosur regional trade integration
IFC, a member of the World Bank Group, is the largest multilateral source
of financing for private sector companies in developing countries.