WASHINGTON, D.C., Nov. 30, -- The International Finance Corporation (IFC) has signed agreements for its involvement in the privatization of the Bank of Khyber and the extension of a US$10 million credit line for on-lending to small and medium-sized enterprises in the North West Frontier Province (NWFP) of Pakistan. The credit line and share option agreements were signed today in Washington, D.C., by Mr. Jannik Lindbaek, IFC's Executive Vice President and Mr. Bashir Ahmad, Chairman and Managing Director of the Bank of Khyber. The privatization plan involves the selling of shares to domestic and international investors and will increase the Bank's capital to Rs. 500 million (US$14.6 million equivalent). The IFC credit line will have a conversion option for up to a 10 percent shareholding in the Bank which would be exercised as part of the Bank of Khyber's privatization. The Bank of Khyber is the premier provincial Bank in NWFP. Established in 1991 by the NWFP government, the Bank's activities have been focused
on providing trade and working capital financing. It is planning to expand and diversify its operations into project financing which will support economic growth in the province. Mr. Lindbaek said, "The small and medium businesses financed by the credit line will contribute to stimulating industrial activity and increasing employment opportunities in the NWFP." (More) IFC Press Release No. 96/62 Page 2 of 2 He added, "The privatization program -- through an issue of shares on the local stock exchanges -- will contribute to the further development of the capital markets and is likely to have a significant impact on the region's economy." IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
