WASHINGTON, D.C., Sept. 19, -- A delegation from the International Finance Corporation will visit Viet Nam from 20 to 24 September 1995. Mr. Peter Cook, the newly-appointed Director of IFC's Asia Department, will lead the delegation of IFC executives. Mr. Cook will review IFC's ongoing activities in Viet Nam and consult with government and industry leaders on initiatives to encourage foreign investment and private sector development. IFC's Board has recently approved loans totalling US$96.6 million to Viet Nam's cement sector. Morning Star Cement Limited is a US$309 million project and one of the largest industrial ventures being undertaken by private investors in Viet Nam. This brings the total number of IFC-approved investments in Viet Nam to six. The five investments already approved are: US$15 million in loans for the construction of the Vina Kyoei steel rolling mill in southern Viet Nam; US$11 million in loans for the Vimaflour flour mill in northern Viet Nam; US$5 million for the construction of the cou
ntry's first private sector port project, the US$10 million Baria Serece Port; US$15 million in loans for the Foremost dairy processing facility in southern Viet Nam; and US$26 million in loans for the expansion of the Hotel Metropole in Hanoi. In addition, IFC has been advising the Government of Viet Nam on the development of capital markets, including analyzing the legal and institutional requirements to establish securities markets and a leasing industry. Commenting on his visit, Mr. Cook said, "The breadth of IFC's potential contribution to the development of Viet Nam's private sector is very substantial. IFC's global experience covers a wide range of sectors, which we can apply to Viet Nam, and we are very enthusiastic about the country's prospects." Mr. Cook will be accompanied by Mr. Harold Rosen, Divisional Manager, Southeast Asia at IFC. IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries. Note
to Editors: See Fact Sheet on IFC's Activities in Viet Nam Fact Sheet on IFC's Activities in Viet Nam Approvals. IFC is accelerating its investment activities in Viet Nam. After approving its first investment in Fiscal Year 1994 (July 1993 - June 1994), IFC approved two more investments in FY 1995, and has approved three additional investments in the first three months of FY 1996. To date, we have supported almost US$ 500 million of projects with over US$ 70 million of our own funds and almost US$ 100 million from participant banks. Fiscal Project IFC IFC Equity/ Participant Year Project Sector Cost Loan Quasi-Equity Loan Total (US$ millions) 1994 Metropole Hotel Tourism 35.0 5.0 3.5 17.5 26.0 1995 Foremost Dairy Agribusiness 29.5 8.0 -.- 7.0 15.0 1995 Baria Serece Port Infrastructure 10.0 3.0 -.- 2.0 5.0 1996 Vimaflour Agribusiness 26.0 8.0 -.- 3.0 11.0 1996 Vina Kyoei Steel Iron and Steel 70.8 15.0 -.- -.- 15.0 1996 Morning Star Cement 309.0 30.0 -.- 66.6 96.6 480.3 69.0 3.5 96.1 168.6 Metropole Hotel. Exp
ansion of international standard hotel in Hanoi. Milestone transaction -- first medium-term, limited-recourse financing executed in Viet Nam. Demonstrated that private sector can attract funding on its own without relying on Government guarantees. Baria Serece Port. Deep water port on the Thi Vai river near Ho Chi Minh City. Will handle vessels twice as large as the existing port in HCMC. IFC's first infrastructure project in Viet Nam and one of the few private infrastructure projects in the country. Morning Star Cement. Cement plant and separate terminal in southern Viet Nam with capacity of 1.76 million tons p.a. One of the largest private projects undertaken to date in Viet Nam outside of oil and gas sector. This project doubles IFC's investment exposure in Viet Nam. Potential Investments. IFC is considering investments in a number of other sectors in Viet Nam, including construction materials, agribusiness, capital markets, infrastructure, oil and gas, petrochemicals, general manufacturing and tourism. Ad
visory Services. In our advisory capacity, IFC is supporting the Government's efforts to establish private capital markets. We are continuing our work of the last several years to advise on the legal and institutional requirements for establishing a securities markets and a leasing industry. IFC's affiliate, the Foreign Investment Advisory Service (FIAS), is also assisting Viet Nam in the development of the framework for attracting foreign investment. FIAS recently organized a roundtable meeting on infrastructure investment between senior Government officials and private sector executives. (More) IFC's Strategy in Viet Nam. IFC's strategy in Viet Nam is to support the entry and expansion of the private sector into those industries which will form the foundation for a market-based economy. This strategy is fully consistent with the World Bank Group's overall strategy in Vietnam, of which key elements are supporting the transition to a market economy and assisting in the development of infrastructure. One major
role IFC has played is to help structure joint ventures between foreign sponsors and Vietnamese sponsors so that they are equitable to both parties. IFC's involvement in such projects often provides comfort to project sponsors as well as lenders. In addition, we are drawing on our experience in other countries undergoing a transition to the marketplace (e.g., China and Russia) in order to better understand Viet Nam's current position and to assist the private sector in navigating the Vietnamese business environment. In addition to supporting larger private investments, IFC is considering the establishment of a facility to provide advice and possibly funding to small and medium enterprises.
