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WASHINGTON, D.C., May 27—The Pacific Islands Investment Fund (PIIF) — established in 1995 by the International Finance Corporation (IFC) to provide financing for small and medium enterprises in the Pacific Island countries — has invested US$325,000 in Wilex Cocoa and Coconut Products Ltd. (Wilex). Wilex is a producer, distributor and exporter of pounded kava and cocoa liquor as well as cocoa butter and other cocoa products. Located in Apia, Western Samoa, it is owned and operated by Samoan citizens.
The project involves the expansion of an existing cocoa processing business in Moata'a, Apia, to accommodate expanded production activities, purchase and installation of a new plant and purchase of additional raw materials. Plant purchases will include a cocoa butter press, cocoa press filter, grinder, chocolate foil wrapping machine, a refiner and a cocoa butter storage tank. Wilex exports its products primarily to American Samoa, Fiji, New Zealand, Australia and the United States. It serves as a model for the government's increasing emphasis on encouraging the private sector to play a greater role in generating exports and employment.
The South Pacific Project Facility (SPPF), based in Sydney, Australia, has provided technical assistance and advisory services to Wilex. Additional technical assistance has been provided by the Centre for the Development of Industry (CDI), based in Brussels, Belgium.
PIIF was set up as a US$2 million risk capital fund on a two-year pilot basis to invest equity capital in small projects with costs between US$500,000 and US$5 million. It also assists investors in mobilizing financing from local sources. PIIF invests in projects that are commercially viable, have a positive developmental impact, and are based in IFC's nine member countries in the Pacific islands — Fiji, Federated States of Micronesia, Kiribati, Marshall Islands, Papua New Guinea, Solomon Islands, Tonga, Vanuatu, and Western Samoa. In November 1995, PIIF approved its first investment — a US$167,000 preference share investment — in the Sinalei Reef Resort in Western Samoa. This was also IFC's first investment in the country. In addition to Wilex, several other PIIF investments are in advanced stages of evaluation, including an eco- tourism project in Papua New Guinea, a capital markets project in Tonga, a private hospital in Western Samoa and an agribusiness project, also in Western Samoa.
Mr. Harold Rosen, Acting Director of IFC's Asia Department said, "In addition to IFC's own direct investments in the region, the Corporation has developed an integrated approach to supporting private sector development in the Pacific Island countries through the combined efforts of PIIF, SPPF, and FIAS (the Foreign Investment Advisory Service). PIIF works closely with SPPF and brings financing proposals arising from its technical assistance work to IFC. In so doing, IFC is leveraging SPPF's efforts and helping it raise project financing for private businesses in the Pacific."
SPPF, which is managed by IFC, was established in 1990 to provide assistance to small and medium enterprises to evaluate and structure investment opportunities, prepare business plans, and obtain project financing. SPPF, which does not invest in projects, is funded by the governments of Australia, Fiji, Japan, New Zealand, Kiribati and Western Samoa, as well as by IFC. The Asian Development Bank (ADB) is also a contributor to the Facility.
IFC provides another service — FIAS — that is designed to promote private sector development in the region. A joint venture between IFC and the World Bank, FIAS helps developing countries structure laws, promotional strategies, and institutional arrangements to stimulate foreign direct investment. FIAS's office in Sydney, Australia, is the focal point for managing its work in the Asia and Pacific region.
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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