WASHINGTON, D.C., November 15, 1999 —
The International Finance Corporation will make two new investments in Turkey, to finance a cement maker on the Black Sea coast and to provide a loan for a joint venture involving Turkish and South Korean interests to build an air conditioner factory.
IFC will lend US$22 million to the Turkish cement manufacturer, Unye Cimento Sanayi ve Ticaret A.¥., for a US$100 million project to increase clinker capacity by more than 150 percent and modernize its manufacturing plant in Unye on the Black Sea.
Unye Cimento, established in 1969, commands 45 percent of the cement market for the Eastern Black Sea area. It is 52 percent owned by OYAK, the Turkish military pension fund, with the remaining shares traded on the Istanbul Stock Exchange.
IFC's investment not only provides scarce long-term financing, but also carries environmental standards that will protect the local environment and serve as a benchmark for other industries in the region.
The second loan, for $25 million equivalent, is for the production of room air conditioners by a recently established joint venture, Arçelik-LG Klima Sanayi ve Ticaret A.¥. The 50/50 joint venture combines the complementary technical, marketing, and manufacturing skills of Arcelik A.¥., a durable goods leader in the Turkish market, and LG Electronics, Inc. of South Korea, a global player in the electric and electronic product markets.
The $50 million project will establish a plant in Gebze, Turkey with an annual capacity of 200,000 split and window air conditioner units for sale in the domestic and international markets. IFC's investment includes a loan of $15 million equivalent for its own account and a syndicated loan of $10 million equivalent. ABN AMRO BANK N.V. and HSBC Bank are the participants in the IFC syndicated loan.
Since its first investment in Turkey in 1963, IFC has approved investments of $1.7 billion equivalent in equity and loans in 175 projects in Turkey's manufacturing, services and banking sectors.
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.
