WASHINGTON, D.C., July 15, 1998 --- The International
Finance Corporation has signed an agreement to invest US$2.21 million in
Akova Impex-Akmeat Plant, a cold storage facility and a meat processing
plant near Sarajevo. The investment will help the development of food production,
distribution, wholesale, and retail networks throughout Bosnia-Herzegovina.
IFC’s investment provides capital to repair and purchase equipment for
the company’s current operations. It will redress the shortage of modern,
reliable cold storage facilities in the Sarajevo area and supply the Federation
Entity of Bosnia-Herzegovina with processed meat products, most of which
are currently imported.
IFC’s investment is part of a US$8.9 million project that is being implemented
in two phases. Phase I, which totaled US$4.3 million and was completed
in February, substantially refurbished facilities damaged during the war
and installed much needed fixtures and equipment for a fruit and vegetable
ripening and cold storage warehouse. Phase II, which IFC has been asked
to finance, involves substantial refurbishment of damaged facilities, procurement
of equipment, and provision of working capital to establish a meat processing
plant with an annual capacity of 2,500 tons. This phase will require US$4.6
million in financing and is expected to take eight months to complete.
Akova Impex is a privately owned company established in 1991. In 1996,
the company entered into a joint venture agreement with Sipad-Komerc, known
as Frigosa and Akmeat, which is a subsidiary of Sipad Holding, a state
owned conglomerate in the former Yugoslav Republic of BiH that managed
the majority of the wood sector operations there.
Harold Rosen, Director of IFC’s Central and Southern Europe Department
noted that the project represents the first long-term loan from an international
financial institution for a joint venture between private investors and
a state owned company. Because long-term debt financing is not easily accessible
in Bosnia-Herzegovina, external private sector sources of financing have
been limited to trade finance and suppliers' credits. IFC will provide
long-term financing for the project that would not otherwise be available
on reasonable terms.
IFC, part of the World Bank Group, fosters economic growth in the developing
world by financing private sector investments, mobilizing capital in the
international financial markets and providing technical assistance and
advice to governments and businesses.