WASHINGTON, D.C., Jan. 23—The International
Finance Corporation (IFC) has approved financing amounting to US$40 million
equivalent for two projects in South Africa. The financing is being
provided in local currency and represents IFC's first rand-denominated
loans as well as IFC's first local currency loans worldwide.
IFC approved a loan of US$10 million equivalent for Cashbank, a bank established
in 1995 by a non-governmental organization, the Group Credit Company, to
service the needs and expand lending activities for low-income communities
within South Africa through the provision of savings facilities as well
as credit for housing, education, and personal loans.
IFC also approved financing amounting to US$30 million equivalent for Unicell
Paper Mills (Pty) Limited, to install and operate an integrated tissue
paper mill in Germiston. The mill's technology will provide important
environmental benefits through its use of waste paper as its raw material
thereby reducing the harvesting of trees and offering an alternative outlet
to what is normally destined for city dumps. The company is expected
to employ about 260 people. Another 100 persons approximately will have
the opportunity to independently collect waste paper.
Mr. Cesare Calari, Director of IFC's Sub-Saharan Africa Department said,
"Besides local currency lending, employment creation, and the economic
empowerment of lower income groups, the projects are also noteworthy for
the following reasons. Cashbank will provide sustainable and commercially
based financing in the critically important area of low-income housing,
whereas Unicell will support regional integration of the SADC (South African
Development Community) region and the widening of markets and distribution
Mrs. Farida Khambata, Director of IFC's Treasury Department added, "We
are pleased to be able to offer loans in rand to our clients. For
companies which do not generate revenues in foreign exchange, this will
provide long-term local currency financing and protect clients against
risks of local currency depreciation. The availability of a long-term
rand/dollar swap market facilitates our ability to offer loans customized
to the needs of our clients."
IFC opened an office in Johannesburg in 1994. To date, the Corporation
has approved financing of US$100.3 million for 18 projects in South Africa.
IFC, a member of the World Bank Group, is the largest multilateral source
of equity and loan financing for private sector projects in developing