Washington, D.C., February, 23, 2001
-
The International Finance Corporation announces a range of new investments—in Africa, eastern Europe, and south and southeast Asia—to support sustainable private sector enterprises in the developing world. These wide-ranging investments are education and health care; telecommunications; the printing and construction industries; data management systems; trade enhancement, a credit rating agency, banking, and microfinance.
GHANA—COMPUTER TRAINING SCHOOL
IFC has helped set up the NIIT Computer Training School, in Accra, Ghana, under a franchise arrangement with NIIT Limited of India. The school provides Ghanaian students and professionals with the information technology (IT) skills needed to compete in the domestic and global economy. Students can combine NIIT courses with undergraduate courses. The project contributes to the development of computer know-how in Ghana, provides skilled management, and enables improved student performance on accredited tests.
The cost of the project is US$508,000 of which IFC is providing a loan of $230,000. The Computer Training School is owned by i2000 Limited. The sponsors are Anupkumar and Devkishin Varyani.
NIIT—an accomplished education specialist established in India in 1981—has provided IT training in more than 25 countries. With over 2,000 centers worldwide, NIIT offers a wide variety of courses from basic computer skills to courses in advanced operating systems.
MOZAMBIQUE—MICROFINANCE
IFC has taken a 13 percent equity stake in Banco de Microfinanças de Moçambique (BMF), the first for-profit bank in Mozambique exclusively dedicated to microfinance. The bank will be initially capitalized at $2 million and will provide financial services to small and medium enterprises that lack access to commercial banks.
BMF will offer its services countrywide. It will start operations in Maputo and open additional branches in other urban centers. Its goal is to provide a full range of financial services, including housing improvement loans, and establish itself as a leader in the Mozambican microfinance market.
Although BMF plans to operate on a commercial basis, it expects to obtain part of its funding from international organizations at concessional rates. Its start-up costs will be financed by a one-time grant from donor and multilateral agencies. IMI (Internationale Micro Investitionen) AG—a German company focusing on financial service institutions targeted at low-income groups in developing and transition economies—is one of the sponsors.
SOUTH AFRICA—CONSTRUCTION SUPPORT SERVICES
FOR BLACK-OWNED BUSINESSES
IFC has invested $2 million in Tusk Construction Support Services of South Africa. Tusk provides working capital loans and project management services to small contractors in South Africa—mainly black-owned businesses. The contracts are to build schools, clinics, low-cost housing, and other public buildings for local authorities.
IFC is helping the company expand its operations into other provinces. The business started in Pietersburg. The project enables smaller construction firms to access capital and know-how to manage contracts successfully and profitably.
Other shareholders in Tusk are Imali Capital, Hendrik de Villiers, Mpengwa Selamolela, Hudgro Investments, and Brait Merchant Bank.
SOUTH AFRICA—DATA MANAGEMENT SYSTEMS FOR
MICROFINANCE INSTITUTIONS WORLDWIDE
DBS Consult, a Cape Town based company in which IFC has recently invested, is fast becoming a success as a provider of software packages—known as Temenos eMerge asset and data management systems—used in microfinance institutions worldwide.
IFC invested $750,000 in the company to enable it to complete the development of its software. Since the product was launched in mid-2000, DBS has made license sales of more than $3 million over a wide geographical area from southern Africa to the Philippines. A technical assistance assignment involving a review of DBS Consult and technical attributes of its products was financed by trust funds from the Netherlands Government.
In a deal with Opportunity International worth over $1 million, DBS will provide Temenos eMerge packages to support entrepreneurial microfinance projects in 25 developing countries. DBS is a joint venture between Temenos International and Global Technology Ltd. of South Africa.
SOUTH AFRICA—PRINTING INDUSTRY
IFC will invest in Printability, a printing company based in Durban, South Africa. The company will purchase printing presses and finishing equipment from Heidelberg Press, one of the world’s leading printing equipment manufacturers.
The modern printing equipment provides quick, high-quality printing. The company will introduce new flexibility and competition into a sector currently serviced by a few established players using dated equipment.
IFC will provide much needed capital for this start-up venture. IFC’s investment includes both equity and a loan for its own account for a total value of $7.65 million of the $30 million project.
ZAMBIA
—
CELLULAR TELEPHONES
IFC has disbursed $3.7 million in financing to Celtel Zambia Limited (formerly known as Zamcell Zambia Limited)—a nationwide GSM (global system for mobile communications) digital cellular telephone operator—to expand its network to meet demand. Celtel’s arrival has increased competition resulting in price reductions. As less than 1 percent of the population has access to a telephone mainline, the introduction of modern and reliable services is enabling more Zambians to own telephones and afford other cellular services.
IFC made a $5.1 million investment in Celtel in 1998 to help fund construction and operation of its digital cellular network. To help meet market demand, IFC has made a second equity investment of $440,000 and provided an additional $3.3 million loan for its own account. Another $3.3 million in debt financing was mobilized from the Development Bank of Southern Africa, a South African development finance institution, which was also a lender to Celtel in 1998.
Celtel, one of two private cellular companies operating in Zambia, was awarded a 15-year license in 1998 by the Zambian Ministry of Communications. Its shareholders are Mobile Systems International Cellular Investments Holding of the Netherlands (MSI Cellular), Mitsui & Company Limited of Japan, and IFC. MSI Cellular is a pan-African cellular operator with 14 operations in Africa. In 1999, IFC made a $10 million equity investment in MSI Cellular to help finance construction, expansion, and operation of its mobile cellular telecom networks. Mitsui has investments in over 30 mobile telecom companies worldwide.
BULGARIA—PARTICLEBOARD PLANT
IFC and Erste Bank, Austria, are financing Kronospan Bulgaria EOOD (KBE), a particleboard and oriented strand board (OSB) manufacturing plant near Bourgas on Bulgaria’s Black Sea coast. KBE will use the investment to set up a production plant for OSB—widely used in the United States and Europe for construction and industrial applications. The company’s competitive position will be enhanced by introducing a higher-value-added product through the adoption of world-class technological and management know-how and further modernization of its manufacturing systems.
IFC's financing for the EURO 20 million project consists of a loan for its own account of EURO 7 million and a syndicated loan of EURO 3 million for the account of Erste Bank. In 1999, IFC invested EURO 21.5 million in the company, which allowed it to modernize and rehabilitate a state-owned particleboard plant and introduce advanced environmentally friendly technology to Bulgaria.
The project will enable Bulgaria to develop its large forestry resources, address the industrial sector’s critical need for long-term investments, and demonstrate how a previously state-owned enterprise can be transformed into a highly efficient and profitable company. The project, which is geared for export, will also increase net foreign exchange earnings. Its products will replace imported products used in the construction and packaging industry, resulting in additional foreign exchange savings.
MOLDOVA—LOCAL BANKING
IFC will help develop the local banking sector in Moldova by providing a loan of $1.5 million to Moldindconbank, a well-managed, privately owned commercial bank that lends to small and medium enterprises. A portion of the loan may be converted into shares of Moldindconbank.
Moldindconbank will use the loan to consolidate its position in the Moldovan banking sector and expand its lending operations. IFC’s loan will also enhance the existing limited resources of long-term financing to local small and medium enterprises.
This project is IFC’s first involving a Moldovan commercial bank and is expected to encourage further investment in the country’s emerging financial sector. It signals IFC’s commitment to support the Moldovan private sector by providing long-term financing that is not easily available in the region. The investment is also expected to positively affect overall economic development, particularly employment creation and competitiveness. Substantial long-term technical assistance to modernize the bank was supported by trust funds from the Dutch Government.
BANGLADESH—TRADE ENHANCEMENT FACILITY
IFC; the Dutch development agency, FMO; and Standard Chartered Bank have committed to support a $52 million trade enhancement facility designed to benefit private sector importers and exporters—mostly small and medium enterprises—in Bangladesh. Under the terms of the facility, IFC and FMO will jointly guarantee Standard Chartered Bank up to $26 million of the total facility amount of $52 million.
The two-year revolving facility will give businesses in Bangladesh—which have limited access to trade finance from local and international commercial banks—better access to letters of credit confirmations by guaranteeing documentary credits originated by selected commercial banks. The facility will initially include six Bangladeshi banks—Dhaka Bank Limited, Dutch Bangla Bank Limited, Eastern Bank Limited; National Credit and Commerce Bank, Prime Bank, and South East Bank Limited. IFC and FMO will guarantee up to 50 percent of each transaction.
The
project will increase the availability of short-term trade finance to Bangladeshi
importers and exporters by supplementing country limits that restrict commercial banks operating in the country. It will help build the reputation of Bangladeshi banks in international markets and promote confidence in the private and commercial banking sector, through which IFC and FMO can reach smaller businesses. The facility will also ensure that local banks improve their reporting. A technical assistance package is being provided to help the banks move toward international accounting standards and strengthen corporate governance.
INDIA—DELIVERY OF ON-LINE EDUCATION
IFC will invest in Learning Universe Private Ltd., an education company in New Delhi, India, which uses web technology to deliver on-line tutorials and test preparations to supplement secondary school education. The web-based tutoring will widen access to quality education, an important factor for economic development.
Learning Universe Private Ltd. owns
eGurucool.com
, an interactive education website launched in November 1999.
eGurucool
’s products include curriculum support services through test preparation tutorials and programs; specific resources and programs to assist student learning at senior secondary level in the sciences, social sciences, and commerce; and developing customized teaching and learning resources for major client school groups. In addition,
eGurucool.com
has developed templates that help client schools build their own interactive websites to create greater communication and interactivity between schools and their communities.
IFC’s equity investment of $250,000 is in the second round of capitalization for Learning Universe Private Ltd. and represents IFC’s first investment in the on-line education business in Asia. Other investors in
eGurucool.com
are Chrysalis Capital and Riddle Investments, an investment arm of StarTV.
PHILIPPINES—HEALTH CARE
In line with its efforts to address the demand for high-quality health care services in the Philippine private sector, IFC is lending $14 million to Asian Hospital, Inc. (AHI), to build a private hospital complex in southern Manila. The investment will increase competition in private hospitals, promote greater efficiency, and improve the quality of medical services. The $91 million project includes acquisition of state-of-the-art medical equipment and construction of a 247-bed hospital and medical office to house 200 doctors’ clinics. This is the first large hospital to be built in the Philippines in the past 25 years. AHI will be the first Philippine hospital to be professionally managed. It will employ an “open” medical staff policy wherein doctors receive admission privileges based on credentials rather than on their position as shareholders in the hospital.
IFC’s financing—which consists of a $12 million senior loan and a $2 million subordinated loan—will play an important role in the project as it will have appropriate grace periods and maturities to match the relatively long lead time needed for the hospital to build up an adequate patient base. The project will meet World Bank Group environmental, health, and safety policies and guidelines and host country requirements. AHI’s major sponsors are Vista Healthcare Asia Pte. Ltd.; Health Delivery Systems; Dr. Jorge Garcia; and Ms. Evelyn Singson. Vista, based in Singapore, is the largest single shareholder, with a 30 percent stake. It is an integrated health care service provider in the region and will handle AHI’s day-to-day operations.
THAILAND—CREDIT-RATING AGENCY
IFC is promoting the development of the local bond market in Thailand with a 10 percent equity investment in Fitch Ratings (Thailand) Limited, the second credit-rating agency in the country to be granted a license from Thailand’s Securities and Exchange Commission in recent weeks.
IFC’s partners include Fitch, one of the three largest international rating agencies, with 39.9 percent equity; Government Pension Fund, an investment vehicle for retirement savings of government employees, with 10.1 percent equity; Thai Life Insurance Company with 10 percent equity; Muang Thai Life Assurance Company with 10 percent equity; Thai Farmers Asset Management Company with 10 percent equity; and TISCO Asset Management Company with 10 percent equity.
Fitch, the main sponsor, will provide credit-rating technical assistance as well as day-to-day oversight. The project will support the development of the local bond market as a source of stable, long-term finance for Thailand’s private sector and will make an important contribution to the continued growth of capital markets in the country.
The mission of IFC, part of the World Bank Group, is to promote sustainable private sector investment in developing countries as a way 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.
