Press Releases


Washington, D.C., March 6, 2000 – Following is a package of brief announcements about IFC transactions signed in the past month for investments that will support private sector enterprises in the developing world. This is the second edition of a new monthly digest of the IFC deals that have not been announced in our regular press releases. More information is available by contacting the Media Relations team listed at the end.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.


IFC will make its first investment in a Latin American mutual fund management company, with equity of US$1 million in Invercap, S.A., a young firm that manages seven separate mutual funds targeted to individuals and corporations in Mexico.
Since regulatory reform in Mexico in 1993, independent mutual fund management companies have been growing rapidly but still represent only a small share of the mutual fund industry. IFC's support for a well-managed independent firm will foster competition in a concentrated industry that is dominated by large financial groups. Invercap, which was founded in 1997, will use the investment to support its next phase of growth and bolster marketing efforts.
The project will help mobilize household savings in Mexico, giving individual investors better access to capital markets, said Karl Voltaire, IFC Director of Latin America and the Caribbean, noting that mutual funds are an effective way for small savers to invest in diversified financial instruments through professionally managed vehicles.

IFC is providing $15 million in loans to Empresa Agroindustrial Laredo, S.A.A., a Peruvian sugar producer, to finance the modernization of sugar mills and expansion of sugar cane fields.
The company will replant up to 2,900 hectares of sugar cane fields and expand sugar mill operations to reach processing capacity of 3,000 tons of sugar cane per day. Manuelita, the project sponsor and second largest sugar producer in Colombia, will contribute by transferring technology to improve the operational efficiency of Laredo. As part of the project, IFC also helped the company to mobilize necessary long-term funding through the support of FMO, the Dutch development agency. The investment, IFC's second in the Peruvian sugar industry, will bolster private sector involvement in the sugar industry.

IFC is providing a $58 million long-term corporate loan package to a Panamanian bank, Banco del Istmo S.A. The investment includes a $20 million loan for its own account.
IFC also arranged a successful syndication, which was oversubscribed by $8 million, bringing the total of B loans to $38 million for the account of participant banks. Banco del Istmo operates 33 branches in Panama and offers commercial credit, cash and asset management, payroll services, employee loan programs and corporate finance services.

IFC will invest $1.25 million for modernization of AB Klaipedos Mediena, Lithuania's only manufacturer of plywood and one of two producers of particleboard in Lithuania. IFC's investment consists of a $1.25 million senior loan and a $1.5 million convertible loan. The project also received support from the Finnish government.
Mediena, which was established in 1898 and privatized in 1992, will use the investment to raise quality and efficiency by upgrading the particleboard and plywood production facilities.
Mr. Jyrki Koskelo, IFC Chief Investment Officer for the project, called Mediena an impressive example of a local company that has successfully adapted to new competitive forces and re-oriented its operations from the former Soviet markets to the international market. The project is part of IFC's strategy to provide long-term financing to modernize newly privatized companies in Central Europe. The investment will bring value-added production to Lithuania's forestry industry, a sector which is expected to attract significant foreign direct investment in the coming years, he said.

IFC has signed an agreement of formal accreditation with the Government of Bosnia and Herzegovina that includes an important new facility to nurture the private sector in the Balkans region. The Balkans Enterprise Facility was established by The World Bank Group and international donors to operate in Albania, Bosnia and Herzegovina, FYR Macedonia, as well as Kosovo. It will be headquartered in Sarajevo, alongside the IFC country office for Bosnia and Herzegovina.
Mr. Harold Rosen, Director of the World Bank Group's Small and Medium Enterprise Department, said the facility will support private sector development in the Balkans by improving access to finance, development of technical and managerial skills, improving access to information and knowledge, developing Internet and e-commerce initiatives, and supporting privatization and corporate governance activities. The Small and Medium Enterprise Department will manage the facility, the newest of six such initiatives worldwide.
For more information on any of these transactions, please contact one of the following people:

Ludwina Joseph, (202) 473-7700, AFRICA & ASIA
Jannette Esguerra, (202) 458-5204, MIDDLE EAST & LATIN AMERICA
Brigid Janssen, (202) 458-4698, EUROPE
Lana Moriarty, (202) 473-6005, GENERAL PRESS INFO