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WASHINGTON, D.C., Sept. 6 -- The International Finance Corporation (IFC) has approved US$10 million in financing for Mercado Mayorista de Santiago S.A. (Mersan), which will construct the first modern, self-contained food wholesale market developed by the private sector in Latin America. The market is expected to provide efficient service to both wholesalers and retailers and to improve significantly the distribution of food products in Santiago, the Chilean capital. It will also provide more sanitary product treatment and disposal, reduce inner-city congestion, and allow for more efficient tax collection. Poor sanitary conditions and product treatment at the existing wholesale markets constitute a major cause of produce spoilage. In addition, the lack of a viable alternative market has hampered the enforcement of hygiene and tax regulations. IFC will provide a US$8 million senior loan, US$3 million of which will be converted into equity at project completion, and a US$2 million senior stand-by loan, both for
its own account. The total cost of the project is estimated at US$30 million. The Mersan market will follow the Spanish wholesale market model and will contain facilities for the trading of fruits, vegetables, groceries, meat, poultry, fish, and flowers. A significant number of the approximately 1,200 wholesalers serving the Santiago area are expected to move into the market to take advantage of its efficiencies, which include easier and faster access; better design for internal traffic; improved infrastructure and services; and ancillary facilities (e.g., bank, cafeterias, etc.) "The Mersan market presents a unique opportunity to improve Santiago's wholesale infrastructure, which will benefit producers, wholesalers, retailers, and consumers," said Mr. Helmut Paul, Director of IFC's Latin America and the Caribbean Department. "This project may well serve as a model for other Latin American countries," he added. IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan f
inancing for private sector projects in developing countries.
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