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WASHINGTON, D.C., Jan. 29-The International Finance Corporation (IFC) recently signed a loan agreement providing a financing package of US$42 million to Sucrerie de Bourbon - Tây Ninh Limited for a sugar mill in Vietnam's Tây Ninh province, which will produce 100,000 tonnes per year of refined sugar.
"The project is expected to create significant economic benefits by contributing to increased rural incomes and reducing dependence on imports," said Mr. Karl Voltaire, Director of IFC's Agribusiness Department. He added, "By financing the first large sugar mill in Vietnam, IFC is helping to develop a modern and efficient sugar sector."
The project will provide technical assistance to sugar cane growers in order to improve farming practices. Superior cane varieties will be introduced, making sugar cane a profitable alternative to other crops. About 4,000 outgrowers are expected to increase their incomes by supplying sugar cane to the project. Waste and residue from the mill will fuel a 24 megawatt power plant.
IFC's financing package consists of a loan of US$42 million of which US$22 million is for its own account and US$20 million is for the account of the following participating institutions: Dresdner (South East Asia) Limited; Rabobank, Singapore Branch; The Development Bank of Singapore Ltd.; Asian Finance and Investment Corporation Ltd.; and Banque de Neuflize, Schlumberger, Mallet - ABN AMRO Group.
The main investor in the project (with 70 percent of the equity) is Groupe des Sociétés de Bourbon, a family-owned company based in La Réunion, a French island in the Indian Ocean, which is active in soft drink production, food distribution, fishing and maritime activities.
The co-sponsors are two Vietnamese companies, which will each hold 15 percent of the equity. They are Vinasugar II, a state-owned enterprise, active in the sugar business in southern Vietnam; and Tanisugar, an enterprise owned by Tây Ninh province, which produces cane and sugar.
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
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