Washington D.C., December 2, 2003—The
International Finance Corporation, the private sector arm of the World
Bank Group, will provide a $1,195,000 partial credit guarantee to Merec
Industries Lda to expand its wheat mill processing activities in Mozambique.
Merec Industries will add a new wheat mill, including grain storage silos,
in Beira, northeast of the Mozambican capital of Maputo. The partial guarantee
will enable Merec to raise a seven-year long-term loan from a local financial
institution, thereby also stimulating the local financial sector. The project
will be supported by a linkages program through IFC’s Small and Medium
Enterprises Department and the Africa Project Development Facility to sustain
50 small bakeries in the region.
The owners of Merec came to Mozambique in 1994 following the civil war
in Rwanda, where they held investments in an oil extraction, soap, and
paint factory. They established Africom Lda, a company that has successfully
traded in and distributed basic commodities, such as sugar, rice, oil,
soap, biscuits, maize, and wheat flour, sourced locally and abroad. Founded
in 1998, Merec began producing maize meal and copra oil in 1999 at its
new factory in the Maputo suburb of Machava.
To complement the financial package, IFC and
Merec will develop a linkages program for local Mozambican bakeries. The
program will bring in specialized technical assistance to help bakeries
improve quality and production techniques, boost efficiency, and increase
sales. The beneficiaries of the technical assistance program will be current
buyers as well as potential new buyers. In the first year, IFC and
Merec will reach about 50 bakeries, building their capacity to offer the
program for many years to come. The program, an important value-added investment
component, will allow Merec to expand sales and strengthen relationships
with buyers. The initial diagnostic work, which began in October
2003, is being financed by APDF.
The mission of IFC is to promote sustainable
private sector investment in developing 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 FY03, IFC has committed more than
$37 billion of its own funds and arranged $22 billion in syndications for
2,990 companies in 140 developing countries. IFC's worldwide committed
portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion
held for participants in loan syndications.