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Washington, D.C., October 19, 2001
—The International Finance Corporation, the private sector arm of the World Bank Group, will invest US$40.0 million in the Sepetiba Tecon container terminal in the Rio de Janeiro state, which will help improve the international competitiveness of the entire port sector in the Southeast container market in Brazil.
This project marks IFC’s third investment in Brazil’s port sector since the government passed legislation increasing the private sector’s participation in port operations. It also comes at a time when financing for infrastructure projects in Brazil from international investors is scarce.
The project involves the completion of an existing container and steel products terminal located in the Bay of Sepetiba, 75 km southwest of Rio de Janeiro, and is part of the government’s “Avanca Brasil” program 2000-2003. The terminal will operate under a 25-year lease which was awarded in 1998 as the result of a public tender from the Port Authority of Rio de Janeiro. The project also includes the purchase of up to seven cranes and the construction of buildings and a rail connection. An annual capacity of 140,000 container moves and 500,000 tons of steel cargo is expected by the end of 2001, gradually increasing to about 350,000 container moves and 720,000 tons of steel cargo by the end of 2005.
The cost of the project is estimated to be up to $140 million. IFC is providing an A Loan of $27.0 million phased in line with demand, a B Loan of $8.0 million, and a C Loan of $5.0 million. The first disbursement of funds is expected to take place within the next few weeks. The participant in the B Loan is Transamerica.
Declan Duff, IFC’s Director of the Infrastructure department said that “this investment supports the government’s efforts to improve the efficiency in Brazil’s port operations, by increasing container capacity and productivity.” Mr. Duff added that IFC’s investment “is expected to play an important catalytic role in reducing port handling costs in Southeast Brazil, thus helping improve the competitiveness of Brazil’s private sector.”
Humberto Freitas, Manager Director of Sepetiba Tecon S.A, “said that Sepetiba Tecon will have one of the lowest cost structures of any new facility in Brazil and will provide shipping lines with world-class levels of efficiency and productivity.”
The sponsors of the project are Companhia Siderúrgica Nacional (CSN), a major Brazilian integrated steel producer, and Companhia Vale do Rio Doce (CVRD), a major Brazilian mining company.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to 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. Since its founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
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