PACKAGED DEALS
Washington, D.C., August 9, 2000—The
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. Packaged Deals is a monthly digest
of new IFC investments 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.
INDIA: IFC AND GLOBAL TRUST BANK PROVIDE INDIAN RUPEE LOANS TO SMALL
AND MEDIUM ENTERPRISES (SMEs)
The International Finance Corporation (IFC) and India's Global Trust Bank
(GTB) are collaborating on a new initiative that marks a milestone for
IFC's operations in India by establishing a US$40 million facility to provide
Indian rupee, as well as U.S. dollar loans, to the SME sector in India.
Indian SMEs have limited access to long-term project finance, especially
if they require local currency funding.
Mr. Bernard Pasquier, IFC's Director for South Asia, said the facility
enables IFC to fund many small businesses previously beyond its reach.
Under its terms, SME businesses will be able to access loans in either
Indian rupees or U.S. dollars, depending on their needs. IFC will co-lend
with GTB to each project considered under the facility.
GTB was formed in 1994 as a new generation private sector bank strongly
focused on serving the Indian SME sector. It's superior technology and
customer service has made it one of the faster growing banks in the country.
GTB was also one of the first Indian banks to produce and follow a stringent
corporate governance code.
GTB's Chairman, Mr. Ramesh Gelli said the new facility with its provision
of local currency financing would strengthen Indian SMEs, which had experienced
excellent growth in recent years. The facility would also enhance GTB's
range of products to the sector.
The government of Netherlands provided technical assistance to support
a study to improve GTB's credit approval system.
CENTRAL AND EASTERN EUROPE (CEE): GROWTH FUND TO MAKE
EQUITY INVESTMENTS IN SMEs
IFC, Germany's Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG),
the State Secretariat for Economic Cooperation of Switzerland (SECO), the
Finnish Fund for Industrial Cooperation (FFIC), Evangelische Kirche
in Hessen und Nassau, and Calvert World Values International Equity Fund,
are establishing the SEAF CEE Growth Fund LLC. The fund will make equity
investments in SMEs, mainly with existing SEAF (Small Enterprise Assistance
Funds) country fund clients, who have outgrown the investment range of
SEAF country funds or have established a viable track record and are ready
to expand their operations.
The fund will be managed by SEAF Management LLC, a Washington, DC-based
non-profit group that employs a team of seasoned professionals who focus
exclusively on private equity investments. The fund manager operates small
equity funds on a largely commercial basis, while using donor funds to
provide extensive training, management support, and technical assistance
to its investee companies. Since 1989, the fund manager has established
equity funds in 10 countries in CEE and Latin America.
The fund has a target size of $30 million. For the first closing, $15.7
million has been raised. $3.1 million of this has been committed by IFC;
DEG, SECO, and FFIC have committed $3 million each; Evangelische Kirche
in Hessen und Nassau has committed $2.4 million; Calvert World Values International
Equity Fund has committed $1 million; and SEAF Management LLC has committed
$100,000.
BALKANS: TRANS-BALKAN FUND TO SUPPORT SMEs
IFC, along with several U.S. and European-based development finance institutions,
have established the SEAF Trans-Balkan Fund LLC, a regional fund designed
to make equity and quasi-equity investments in private SMEs in the Balkan
region. Participation in the fund forms part of IFC's response to the post-crisis
Balkans where IFC seeks to mobilize long-term equity capital and support
an emerging private sector.
The fund will be capitalized at $24.1 million and will target investments
in Albania, Bosnia and Herzegovina, Bulgaria, Croatia, FYR of Macedonia,
and Romania. It will be managed by SEAF Management LLC.
Other investors include the U.S. Agency for International Development,
Norfund of Norway, the regionally based Black Sea Trade and Development
Bank, DEG, SECO, and FFIC. In addition, the fund has received important
commitments and pledges for technical assistance, which will support the
growth and long-term development of investee companies.
The fund will work closely with the Balkan Enterprise Facility, an IFC-managed
initiative to identify investment opportunities and provide business support
to the fund's investee companies. Mark Alloway, Manager of IFC's
Southern Europe and Central Asia Department, said the fund would provide
direct finance to growth-oriented local enterprises and represents a major
effort to address the lack of risk capital for early stage enterprises
in the region.
TURKEY: AGRO-INDUSTRY PROJECT
IFC will invest $25 million (including a loan of $20 million and equity
of $5 million) in Banvit Bandirma Vitaminli Yem Sanayi Anonim Sirketi (Banvit),
a poultry company in Turkey. The project covers a two year $78.4 million
expansion program by Banvit to increase its chicken processing capacity
from 58.8 to about 120 thousand tons per annum and establish a turkey processing
facility with a capacity of about 28 thousand tons per annum. The modernization
will enable Banvit to better serve the needs of Turkish consumers by improving
the range and quality of its products.
Mr. Tei Mante, Director of IFC's Agribusiness Department, said the project
would have a strong developmental impact on the local economy as it will
expand the company's network of outgrower farms from 500 to 800, creating
additional rural employment as well as 300 jobs in processing plants. By
supporting Banvit's expansion, IFC will help promote higher efficiency,
better quality, improved sanitary standards, and best practices throughout
the Turkish poultry industry.
Mr. Vural Gorener, founder and CEO of Banvit, said the project will increase
the company's competitiveness and help to prepare it for the challenges
of operating in a global market when Turkey's agricultural sector is liberalized.
GHANA: FINANCING FOR COMPUTER TRAINING SCHOOL
IFC will provide a loan of $230,000 to establish the NIIT Computer Training
School in Accra, Ghana under a franchise arrangement with India's National
Institute of Information Technology Limited, the largest Indian provider
of computer education and training whose educational concepts have been
replicated in many parts of the world. The school will offer courses in
basic computer skills, network-centered computing, systems analysis, and
programming. The total project is estimated to cost $508,000.
The sponsors are two brothers, Anupkumar and Devkishin Varyani who own
the company equally and have more than 15 years experience in international
trade and manufacturing in Africa and other parts of the world.
Demand for postgraduate courses in computer science is very high in Ghana
as employers have made computer literacy a key criteria in their selection
process for prospective job seekers.
CAMEROON: BILINGUAL EDUCATION COMPLEX
IFC will provide a loan of $338,000 in Euros to Horizon Bilingual Education
Complex (HOBEC)--a private bilingual (English and French) school in Cameroon—to
expand its existing complex and increase student enrollment.
Hobec started operations in 1991 with two nurseries and one primary class.
Its curriculum, which is based on the national curriculum, blends local,
British, and French programs of study. It offers modern and practical education
to students from nursery to secondary school. The proposed expansion will
cost about $676,000.
The main sponsor is Ms. Fuondjing Terry Shuri, an English speaking Cameroonian
who was educated at the universities of Yaounde, Cameroon and Ibadan, Nigeria.
She has pioneered provision of high quality bilingual education in Cameroon.
UGANDA: FINANCING FOR PRIMARY SCHOOL
IFC will provide a loan of $351,000 to establish the $1.25 million
Kabojja Junior School, a co-educational private primary school in Kampala.
The school will cater to 640 day scholars with a comprehensive curriculum
leading to the Uganda Primary Leaving Certificate of Education. The project
will also set up a bursary fund for underprivileged children from rural
and slum areas. The primary school will act as a feeder to Kabojja Secondary
School, which is also owned by the sponsors.
Kabojja Junior School is equally owned by two Ugandan nationals, Ahmed
Nsubuga and Nasser Lubega. Mr. Nsubuga is a qualified teacher and part-time
lecturer and Mr. Lubega has worked in local banks. Both are on the board
of governors of several schools in Uganda. Ms Susan Cardis, an expatriate
with experience in running schools in the U.K. and Pakistan, will provide
technical support with assistance from locally recruited staff.
Ms. Haydee Celaya, Director of IFC's sub-Saharan Africa Department, said
the three educational institutions financed by IFC would increase involvement
of the private sector in social infrastructure and free up limited public
resources for other priorities.
For more information on any of these transactions, please contact one of
the following people:
Ludi Joseph, (202) 473-7700, ljoseph@ifc.org
AFRICA & ASIA
Jannette Esguerra, (202) 458-5204, jesguerra@ifc.org
MIDDLE EAST & LATIN AMERICA
Brigid Janssen, (202) 458-4698, bjanssen@ifc.org
EUROPE
Lana Moriarty, (202) 473-6005, lmoriarty@ifc.org
GENERAL PRESS INFO
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