WASHINGTON, D.C., May 28, 1998 --- The International Finance Corporation signed investment agreements on May 14, totaling US$0.95 million in loan and equity to support Tesinma S.C., a company that will assemble buses, trucks and commercial vehicles using imported chassis and drive trains.
The factory, which is owned by Tesfay Yhdego, an Eritrean national, and Delia Brox, his German wife, is located in Dekemhare, a town earmarked for industrial development about 40 kilometers west of the Eritrean capital, Asmara. The owners, both qualified production engineers, have invested significantly in Tesinma and will train the firm’s staff in modern production methods. The company plans to assemble vehicles both for the domestic market as well as for export to neighboring countries.
IFC helped the owners complete their financial plan and provided foreign currency term financing, currently not available in Eritrea. IFC’s investment is a loan of US $730,000 and an equity participation of US $220,000.
Following the signing in Asmara, the Government of Eritrea welcomed the involvement of IFC which, it said, should help ensure that the project’s economic objectives will be met.
Cesare Calari, Director of IFC’s Sub-Saharan Africa Department, noted that this is IFC’s first investment in Eritrea. It embodies in many ways the type of business that should flourish in Eritrea, which is benefiting from returning talent and capital, a strong manufacturing focus, and an export orientation.
IFC, a member of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international finance markets, and providing technical assistance and advice to governments and businesses.
