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IFC INVESTS IN UZBEKISTAN’S AGRICULTURE SECTOR


J. Esguerra
Phone: (202) 458-5204
Fax: (202) 974-4384
E-mail: jesguerra@ifc.org


WASHINGTON, D.C., April 16, 1998—The International Finance Corporation signed an agreement yesterday involving three investments totaling US$60.4 million to modernize and support Uzbekistan’s agriculture sector.  The integrated investment package will provide the equipment, as well as maintenance and leasing services critically needed to improve the productivity of the country’s agriculture sector.

IFC investment in UzCaseMash for up to US$6.8 million for IFC’s own account, up to US$4 million for the account of participants, and an equity investment of US$2.6 million will help construct an assembly plant for Case cotton pickers and grain headers.  The project will reduce the shortage of farm machinery with modern equipment in design and operation.  The project is a joint venture between Case Equipment Holdings Ltd., (CEHL) a wholly owned subsidiary of Case Corporation of USA, the Uzbek state agriculture machinery association Uzselkhozmashholding, and an Uzbek agriculture equipment producer, PO Tashselmash.

In a second investment, UzCaseService will receive up to US$3.2 million for IFC’s own account, up to US$3.9 million for the account of participants, and an equity investment of US$0.5 million to establish about a dozen service centers throughout Uzbekistan.  These service centers will provide technical support and maintenance for agricultural equipment, mainly for Case and other imported agricultural equipment. The project is a joint venture between Case Equipment Holdings Ltd., Uzselkhozsnabremont, the Uzbek procurement agency for agricultural equipment, Uzselkhozmashholding, and the Uzbek Banking Association.


UzCaseagroleasing will benefit from a third IFC investment including a loan of up to US$5 million for IFC’s own account, a loan for up to US$5 million for the account of participants, and an equity investment of up to US$1 million.  The leasing company will provide farms access to long-term credit by writing medium- to long-term leases to acquire modern equipment and machinery.  The project is a joint venture between Case Credit Holdings Ltd. and the Uzbek Banking Association.


“Agriculture is the heart of the Uzbek economy accounting for about 30 percent of Uzbekistan’s GDP, contributing about 60 percent of export earnings, and employing about 40 percent of the total labor force making the country the world’s fifth largest producer of cotton and the second largest exporter,” said Mr. Iyad Malas, IFC Manager who signed the agreements for the Corporation.  “The projects are IFC’s first integrated approach, through a multicomponent project, to address the needs of a key economic sector.   The project will play a major role in introducing new technology, management know-how, and market forces to the agriculture sector and accelerate its transformation to a market-based system.”


IFC, part of the World Bank Group, fosters growth in the developing world and in emerging economies by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.