WASHINGTON, D.C., June 17 -- The International Finance Corporation (IFC) has signed an agreement with Politeno Indústria e Comércio S.A. (Politeno), a producer of polyethylene in Brazil, to finance a program of plant modernization and short-term debt reduction.

The program will enable Politeno and its subsidiary, Politeno Linear Indústria e Comércio S.A. (Politeno Linear) to expand their product range and improve their financial structure thereby improving their ability to better meet the growing demand for polyethylene. Politeno produces low density polyethylene and its subsidiary produces linear low density and high density polyethylene.

"IFC's support to Politeno illustrates IFC's commitment to the economic development of the northeastern region of Brazil," said Jean-Philippe Halphen, Director of IFC's Chemicals, Petrochemicals and Fertilizers Department. "IFC is pleased to have another opportunity to collaborate with Banco Nacional de Desenvolvimento Economico e Social (BNDES) in extending long-term finance to Politeno."

Mr. Max Feffer, Chairman of Cia. Suzano de Papel e Celulose S.A., a major shareholder of Politeno, added, "We are pleased to see IFC's renewed involvement in the petrochemical sector in Brazil after the difficult years the industry went through. We are particularly pleased with IFC's continuing support to Politeno."

IFC is providing US$19 million of long-term finance toward the US$55 million project, with the balance to be provided by BNDES, FINAME and shareholders' equity. In 1989, IFC provided long-term financing for the construction of Politeno Linear's plant. Politeno's shareholders are Cia Suzano de Papel e Celulose S.A., Companhia Nordeste de Participaçoes S.A., Itochu Corporation and Sumitomo Chemical Company Ltd.

IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.