WASHINGTON, D.C., May 6, 1999 ---
The International Finance Corporation today
signed an agreement to advise the Government of Ecuador on restructuring and privatizing state-owned enterprises, including power generation and distribution, telecommunications, hydrocarbons, airports, postal services and possibly the water and sanitation sector.
IFC will advise on the strategic direction of the privatization program and coordinate and oversee the entire privatization process. IFC will work with private investment banks that will execute individual privatization deals. IFC has extensive experience in implementing privatization transactions in a wide range of sectors as well as in advising on the more macro-strategic issues surrounding a broad restructuring and privatization program. Under the mandate, IFC will draw on its transactional and private sector investment experience as well as the public sector experience of the entire World Bank Group.
The launch of the privatization program in Ecuador reflects significant progress in reform-oriented legislation. Congressional debate culminated in April with the passage of the Law on the Reform of the Public Finances, which opened the way to greater currency stability, a more manageable budget deficit and agreement on loan packages from multilateral institutions amounting to some $1.4 billion.
A multisector Privatization Law is expected to be presented to Congress shortly, providing the framework for private sector participation in electricity, telecom, hydrocarbons, airports, roads, water and sewerage and railways.
Alvaro Guerrero, President of the Ecuadorian privatization agency CONAM who signed on the government's behalf, said that the decision to retain IFC as global advisor to the privatization program was based on IFC's track record in safeguarding the public interest and bringing impartiality and transparency to the process.
Assaad Jabre, IFC Vice President added that IFC welcomes being part of a historic modernization and privatization process that will provide a solid basis for sustainable long-term economic growth.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets and providing technical assistance and advice to goverments and businesses. IFC has worldwide experience in the privatization of state-owned entities and plays a key role in providing comfort to prospective private investors while ensuring protection of the host country's interests.
