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L. Joseph
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WASHINGTON, D.C., Mar. 4—The International Finance Corporation (IFC) recently signed an agreement to lend up to US$7 million to Baku Coca-Cola Bottlers (BCCB), the largest bottling plant in Azerbaijan, for its US$21.2 million expansion.  The financing is intended to be used to expand the company's product range to include bottled water, in addition to Coca-Cola, Fanta, and Sprite.  As Azerbaijan's urban and rural water supplies are unsatisfactory, the project will help meet the country-wide demand for clean, bottled water, and soft drinks.

This project represents IFC's second investment in the company.  The first investment in September 1997 consisted of a loan of up to US$3.5 million and an equity investment of US$2.3 million. IFC's projects are the first major foreign direct investments outside the country's oil sector and are creating a total of 250 jobs.

BCCB is a joint venture between Efes Investments of Turkey and Ilchin Limited of Azerbaijan.  Efes Investments is part of the Anadolu Group, one of Turkey's leading industrial conglomerates in the beverage, automotive, finance, and office equipment sectors.  It has equity interests in four Coca-Cola bottling operations outside Turkey -- in Azerbaijan, Kazakhstan, Kyrgyz Republic, and Russia.   Ilchin Limited is a private company owned by two Azeri entrepreneurs.

Azerbaijan, which gained independence in 1991, has faced significant economic challenges in its transition to a market economy.  While the government's economic reform program has restored financial stability and curbed inflation, private enterprise is still emerging.  By adding another 100 jobs, BCCB will support private distributors and transporters as well as small and medium-sized retailers.

Mr. Harold Rosen, Director of IFC's Central and Southern Europe Department said that the original plant financed by IFC in 1996 was completed on time and within budget and represented a successfully implemented private sector project in Azerbaijan, outside of the oil sector.  He added that the new project would also bring valuable benefits to the country in terms of job creation, technology and skills transfer, and the introduction of a modern polyethylene terepthalate (PET) bottle production process.  In addition, the project would boost the company's efficiency and competitiveness, and improve distribution and supply networks, particularly in the outlying regions of Azerbaijan.

Azerbaijan became a member of IFC in October 1995. IFC's strategy for the country is to help catalyze private sector investments with an initial focus on oil production and pipeline projects, agro-processing operations, foreign joint ventures, and capital markets development.

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.