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Washington, D.C., October 19, 2000—The following is a package of brief announcements about IFC transactions signed in the past month for investments that will support private sector enterprises in the developing world. Packaged Deals is a monthly digest of new IFC investments that have not been announced in our regular press releases. More information is available by contacting the Media Relations team listed at the end.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will 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.
IFC will lend Euro 4.2 million loan (US$3.6 million) to Florina Bulgaria S.A., to set up an integrated plant to make fruit juice and carbonated drinks, capitalizing on Bulgaria's long-standing strength in fruit production. Florina Bulgaria will add a soft drink production line and a line to prepare fruit purees needed for high-quality fruit juices to its existing Tetra Pak juice production line. The company began juice production in 1999 by acquiring a defunct bread factory through privatization and converting it into a juice packaging plant.
The sponsor is Florina A. Honeos S.A., a leading independent entrepreneur in the juice and mineral water industry in Greece and across the Balkans. The new Black Sea Trade and Development Bank, based in Thessaloniki, Greece, is also providing a loan to the project.
IFC will invest $10 million in equity and quasi-equity in Indonesia's PT Bank NISP to strengthen its capital base. This is NISP's second capital increase after an investment by the prominent Hong Kong-based Regent Pacific Group in late 1998.
NISP, which has established a regional market niche serving small and medium clients, is one of the best-performing banks in Indonesia with a highly professional and conservative management. It was recently classified by Bank Indonesia as an "A Bank" with a current capital adequacy ratio of about 13 percent. With an asset size of more than Rp.4.5 trillion (about $500 million), it is the third largest private bank that does not rely on government recapitalization. The strengthening of NISP's capital base will allow the bank to take advantage of consolidation in the Indonesian banking sector by expanding branch networks and business lines. It is also an important signal of confidence to investors who remain reluctant to commit investments to the Indonesian banking sector.
The government of Switzerland is supporting a technical assistance program that will enable NISP to strengthen and enhance its capabilities by introducing modern banking and management information practices.
IFC will provide a Euro loan equivalent to $464,000 to Vegetables and Flowers Export SA, Burundi, for a $1.16 million project to produce high-quality cut roses for export by air to Europe. Three hectares will be developed to grow roses in wood-framed plastic-covered greenhouses, which are already being successfully used by other producers in neighboring Tanzania and Rwanda.
The project will create employment, earn foreign exchange, and serve as a demonstration model for the diversification of exports, beyond the traditional tea and coffee export base. The sponsors are Mr. and Mrs. H. Ndikumasabo. He is a prominent Burundian businessman with a coffee export business and cattle and dairy interests.
IFC will provide a Euro loan equivalent to $342,000 to Demba'Lait, Chad, to set up a $755,000 milk-processing plant in N'Djamena. The plant will process about 4,000 liters of milk per day into pasteurized and curdled milk, cream, butter, and yogurt. Besides adding value to local raw milk, the project will increase incomes and extension services to independent dairy farmers of the rural suburbs of N'Djamena and transfer technology and know-how to the dairy sector in Chad.
IFC's loan is the first small business investment in Chad since the country became an IFC member in April 1988 and is expected to give a positive signal to the local business community and to foreign investors. The
main project sponsors are Mr. Tite Demba, an agricultural engineer who has specialized in dairy technology, and his brother Mr. Emmanuel Demba, both Chadian nationals.
IFC will lend $1 million to establish Gateway Hotel, a 70-room, three-star international hotel and conference center in Namibia's main port city of Walvis Bay. Walvis Bay has a significant shortage of good-quality facilities for business and government meetings. Gateway Hotel will be managed by the Zimbabwe-based company and regional hotel operator, Cresta Hospitality, a previous IFC client, which operates 13 properties in southern Africa. The total project cost is $3.42 million.
The project is expected to generate 45 direct jobs for the indigenous population in the Walvis Bay area, and the events and conference catering will create many other indirect jobs. The main sponsors are United Africa Namibia Holdings (Pty) Limited, owned by Namibian businessman Mr. Haddis Tilahun, and Pamue Investment Corporation (Pty) Limited.
IFC will provide a $900,000 loan to Nigerian bus company, Oha Motors Nigeria Limited, to acquire six new 55-seater buses at a cost of $2.27 million. The company has a fleet of 23 modern buses and has been in the transportation business since 1994. The new buses will be supplied by Volvo do Brasil Veiculos LTDA through its sole distributor, Concieto Motors Nigeria Limited, and will expand the company's interstate transport business by tapping into the growing market on the Lagos-Abuja route. Demand for bus services has soared with the increase in traffic between the national capital of Abuja and Nigeria's principal city of Lagos.
The project will bolster public transportation, a vital economic sector that is severely underserved in Nigeria. The project sponsor is the Ohamadike family. Mr. Uche Ohamadike, the managing director, is a chemical engineer and businessman, who worked for his father's spare motor parts retail outlets before developing the bus operations business.
IFC will provide a $700,000 loan to Nigerian company Gurmeet Nigeria Limited to manufacture replacement rims for bicycles and motorcycles. Rims currently must be imported from India and China. The company has successfully traded in bicycles and accessories for three years. The project, which will cost about $2.29 million, will produce quality rims at affordable prices and help improve the use of replacements.
The project will ensure that higher-quality bicycles—an essential mode of transport in rural areas—with cheaper, locally produced rims, will continue to be within the reach of low-income groups in Nigeria. The sponsors are Messrs. Pritam Savalani, Nari Gwalani, Arun Gwalani, and Mallam Bashir Tahir. The main promoter, Pritam Savalani, will be managing director and CEO of the company.
IFC will invest $100,00 in equity and $340,000 in debt in a Zambian internet company, Qnet Communication Systems Limited. Qnet will provide basic internet services to 7,500 individuals and business subscribers, including electronic information and data management; communication and support services in the form of training and installation; and development services on internet connectivity and web development. The estimated cost of the project is $1 million.
The project will expand an information service that is becoming vital to the development of Zambian industry and services; increase competition in a market that has so far been dominated by one supplier; introduce up-to-date technology in a crucial sector; and support the emergence of the Zambian business community. The major sponsor is Quantum Technology Africa Limited, a leading Zambian technology company, equally owned by Zambian residents, Mr. and Mrs. Ravinder Raina. Quantum has a 75 percent shareholding in Qnet with the balance being held by Zambian businessmen.
While women entrepreneurs in Africa face widespread gender discrimination in obtaining financing for viable projects, they can still succeed when they get the right kind of support. That was the message six leading African businesswomen brought to a presentation of the semi-annual board meetings in Accra, Ghana, of the African Project Development Facility (APDF), a support service for African small and medium enterprises managed by IFC.
The businesswomen commented on an independent study of APDF's impact on women entrepreneurs that was recently conducted by Nairobi-based consultant Gathoni Mungai. The study, done at the request of the Norwegian government, found that APDF has proved far more receptive to working with female business owners than most African financial institutions, attracting a total of $16.2 million in financing for 42 woman-sponsored projects, or 14 percent of all those APDF has completed over its 14-year history. Africa's banks, in contrast, are estimated to devote less than 5 percent of their portfolios to projects promoted by women. APDF has recently stepped up its efforts to attract private capital to woman-sponsored businesses, a step it sees as important in addressing gender imbalances that contribute to widespread poverty in Africa.
The author of the report encouraged APDF to use its links to both the World Bank and the business community to take creative new steps to attract more private capital to woman-sponsored projects. The banking status quo on the continent was not acceptable for Africa's businesswomen, she said. Funded by IFC in partnership with donor institutions, APDF offers a full range of pre- and postinvestment services for African small and medium enterprises. Working from offices in Accra, Abidjan, Lagos, Harare, Johannesburg, and Nairobi, it supports projects with typical investment costs in the $250,000 to $7 million range but at times considers smaller or larger projects if warranted by conditions in the entrepreneur's country and socio-economic impact of the project.
For more information on any of these transactions, please contact one of the following people:
Ludi Joseph, (202) 473-7700, AFRICA & ASIA
Jannette Esguerra, (202) 458-5204, MIDDLE EAST & LATIN AMERICA
Brigid Janssen, (202) 458-4698, EUROPE
Lynn Véronneau, (202) 473-6005, GENERAL PRESS INFO