Washington, D.C. March 18, 2002
— The International Finance Corporation, the private sector development arm of the World Bank, will provide a loan of up to $5.3 million to Teteks A.D Tetevo, a leading Macedonian wool textiles mill and key local employer. The investment aims to increase the company’s exports and improve efficiency in a socially responsible and environmentally sound fashion.
“Macedonia needs key private sector employers like Teteks A.D Tetovo to remain strong as it recovers from its recent internal conflict,” said Khosrow Zamani, IFC’s Director for Southern Europe and Central Asia. “Our investment will play a key role in employment retention for hundreds of employees and send a strong positive signal to foreign investors on the improving business climate in the country ,” Mr. Zamani added.
The IFC investment, signed by the two sides in Washington on Friday, consists of a senior loan of up to $5.3 million to support the textile operations modernization program, which includes an energy efficiency and environment component. Part of the IFC loan -- $300,000 – will be earmarked for the Teteks Corporate Citizenship Initiative (CCI), a program designed to help the company restructure its operations in a socially responsible manner.
The CCI program, proposed by IFC in response to Teteks’ ongoing restructuring efforts, will provide small business financing to some of Teteks’ workers to help them start their own businesses. This would help cushion the effects of the corporate restructuring. Teteks has pledged to match IFC’s $300,000, bringing the total to $600,000 for small business financing. IFC is currently seeking donor technical assistance trust funds to further support the CCI.
Teteks, established in 1951, is the largest wool textile mill in FYR Macedonia and the only vertically integrated wool textile operation in Europe. Based in the city of Tetevo, about 40 km west of Skopje, Teteks is a fully privatized company whose activities include spinning, weaving and fabric production, manufacture of knitwear, and production of ready-made garments.
Given the recent conflicts in the region, local companies like Teteks have limited access to long-term financing to support their growth. Providing long-term finance to private sector companies in the developing world and emerging markets facing troubled times remains a key strategic goal of the IFC.
The Netherlands Trust Fund provided technical assistance to strengthen the marketing function of Teteks and to help the company expand its export markets.
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.
