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World Bank / IMF 9/25/90 [OA 8316]
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administrative marker by the George Bush Presidential
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Speechwriting, White House Office of
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Speech File Backup Files
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World Bank / IMF 9/25/90[OA 8316]
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26
20
7
4
1990 IMF/WORLD BANK ANNUAL MEETING
SHERATON WASHINGTON HOTEL
TUESDAY, SEPTEMBER 25, 1990
3:00 P. M.
THANK YOU ALL VERY MUCH. AND THANKS ESPECIALLY TO
MY GOOD FRIEND NICK BRADY -- FOR THOSE KIND WORDS --
AND FOR THE OUTSTANDING JOB YOU'RE DOING AS OUR
SECRETARY OF THE TREASURY.
CHAIRMAN SAITOTI [SI-TOE-TEE]. MR. CAMDESSUS
[KAHM-DEH-S00]. MY OLD FRIEND BARBER CONABLE. IT
REALLY IS A PLEASURE TO BE BACK WITH YOU THIS YEAR, TO
WELCOME YOU ALL TO WASHINGTON FOR THIS IMPORTANT WORK.
AND IT IS A PARTICULAR PLEASURE TODAY TO WELCOME
THE NEW MEMBERS FROM BULGARIA, THE CZECH AND SLOVAK
REPUBLIC, AND NAMIBIA, AND, OF COURSE, THE SPECIAL
INVITEES FROM THE SOVIET UNION. YOUR PRESENCE HERE
REMINDS US ALL OF HOW EVENTS OF THE PAST YEAR ARE
PRODUCING A NEW PARTNERSHIP OF NATIONS -- A
FUNDAMENTAL, INDEED INSPIRING CHANGE IN THE WORLD'S
POLITICAL AND ECONOMIC ORDER.
- 2 -
THE MOVEMENT TOWARD DEMOCRATIC RULE -- ALREADY
STRONG THROUGHOUT THE 1980'S -- ACCELERATED DURING WHAT
I CALL THE REVOLUTION OF '89. THE RIGHTS OF THE
INDIVIDUAL HAVE BEEN REAFFIRMED, WITH GREATER ADHERENCE
TO THE RULE OF LAW.
THE FREEDOM TO CHOOSE POLITICAL LEADERS -- AND
EVEN POLITICAL SYSTEMS -- HAS TRIUMPHED IN COUNTRIES
THAT ONLY A YEAR AGO WERE RULED BY SINGLE-PARTY
REGIMES. AND HAND-IN-HAND, NEW ECONOMIC FREEDOM HAS
BEGUN TO EMERGE AS WELL.
TODAY, LEADERS AROUND THE WORLD ARE TURNING TO
MARKET FORCES TO MEET THE NEEDS OF THEIR PEOPLE. OF
COURSE, CHANGE HAS NOT COME EASILY. BUT AS I SAID LAST
YEAR, AT THIS SAME MEETING:
"THE JURY IS NO LONGER OUT. HISTORY HAS DECIDED."
111
AND TODAY, THE RESULTS OF THAT GLOBAL EXPERIMENT
ARE UNMISTAKABLE. TODAY, THE CONSENSUS IS THIS:
- 3 -
GOVERNMENTS BY THEMSELVES CANNOT DELIVER
PROSPERITY. 1111
RATHER, THE KEY TO ECONOMIC GROWTH IS SETTING
INDIVIDUALS FREE -- FREE TO TAKE RISKS, FREE TO MAKE
CHOICES, FREE TO USE THEIR INITIATIVE AND ABILITIES IN
THE MARKETPLACE. WE ARE SEEING THIS, FOR EXAMPLE, IN
THE RESTORATION OF PRIVATE OWNERSHIP IN COUNTRIES WHERE
THE STATE ONCE CONTROLLED EVERY ASPECT OF ECONOMIC
LIFE. AND FOR EFFICIENT PRODUCTION -- PRIVATE
OWNERSHIP IS STILL THE MOST POWERFUL INCENTIVE KNOWN TO
MAN. III
MATCHED BY THE REJUVENATION OF MARKETS, THE
ABILITY TO MAKE INDIVIDUAL ECONOMIC CHOICES IS THE
FASTEST, MOST EFFECTIVE WAY TO ACHIEVE AND SUSTAIN
BROAD-BASED ECONOMIC GROWTH. AND THAT IS WHY LEADERS
EVERYWHERE ARE UNDERTAKING DIFFICULT ECONOMIC REFORMS,
BUILDING STRONGER, MORE VERSATILE PRIVATE SECTORS,
IMPROVING EFFICIENCY, AND MAKING GOVERNMENTAL DECISION-
MAKING MORE RATIONAL.
- 4 -
THAT PROCESS TAKES TIME. ECONOMIC ADJUSTMENT IS
OFTEN DIFFICULT. AND IN RECENT MONTHS, A NEW CHALLENGE
HAS ARISEN WHICH COULD HINDER THIS PROCESS OF CHANGE:
IRAQ'S ILLEGAL AND UNPROVOKED AGGRESSION AGAINST THE
SOVEREIGN NATION OF KUWAIT.
CLEARLY, THE GREATEST HARM IS TO KUWAIT AND ITS
PEOPLE. AND WHEN THE SAUDI BORDER WAS OPENED, KUWAIT'S
NEWEST REFUGEES BROUGHT FRESH TALES OF THE CRUELTY AND
HORROR INFLICTED ON THE KUWAITI PEOPLE AND FOREIGN
NATIONALS BY THE OCCUPYING FORCES OF SADDAM HUSSEIN.
AND TODAY, OTHER COUNTRIES -- ALREADY FACING
PAINFUL ECONOMIC AND POLITICAL TRANSFORMATIONS -- MUST
NOW DEAL WITH ADDED HARDSHIPS. SERIOUS CHALLENGES HAVE
EMERGED FOR COUNTRIES ROCKED BY UNPREDICTABLE TIDES IN
THE FLOW OF OIL, TRADE, DISPLACED WORKERS, AND
REFUGEES.
- 5 -
THIS STAGGERING BURDEN, WHICH IS PRESSING UPON
THESE MOST SERIOUSLY AFFECTED COUNTRIES, CALLS FOR A
GENEROUS RESPONSE FROM THE WORLD COMMUNITY. TOWARD
THAT END, WE HAVE ALREADY BEGUN TO MOBILIZE FINANCIAL
RESOURCES FOR THE FRONT-LINE STATES AND TO ENSURE
RESPONSIBLE SHARING AMONG CREDITORS. THE INITIAL
RESPONSE TO THAT EFFORT HAS BEEN IMPRESSIVE. NOW, IN
ORDER TO TRANSFORM COMMITMENTS INTO CONCRETE
CONTRIBUTIONS, I AM PLEASED TO ANNOUNCE THE FORMATION
OF A GULF CRISIS FINANCIAL COORDINATION GROUP, -WHICH
THE
OF TREASURY SEC.
WILL MEET OMORRO UNDER $ CHAIRMANSHIP/WITH THE AIM BRAD4,
OF ACHIEVING EFFECTIVE, TIMELY AND SUSTAINED FINANCIAL
SUPPORT TO THESE MOST SERIOUSLY AFFECTED COUNTRIES.
BUT LET US NOT FORGET AN EVEN LARGER GROUP OF
COUNTRIES REPRESENTED HERE WILL SUFFER FROM HIGHER OIL
PRICES AND OTHER ECONOMIC DISLOCATIONS.
WHILE WORLD ATTENTION HAS RIGHTLY FOCUSED ON THOSE
COUNTRIES CLOSEST TO THE SITUATION AND BEARING THE
HEAVIEST ECONOMIC BURDEN, I CAN TELL YOU THAT THE REST
OF THE WORLD IS CERTAINLY NOT FORGOTTEN, AND NEVER WILL
BE.
- 6 -
THIS GATHERING OF WORLD FINANCIAL LEADERS GIVES US
AN OPPORTUNITY TO DISCUSS HOW WE CAN WORK TOGETHER TO
ADDRESS THE SPECIAL FINANCIAL BURDEN OF THIS CRISIS --
AND DO so IN A WAY THAT WILL SUSTAIN THE DRAMATIC,
WORLDWIDE TRANSITION TO FREE MARKETS.
THE I.M.F. AND WORLD BANK -- GIVEN THEIR CENTRAL
ROLE IN THE WORLD ECONOMY -- ARE KEY TO HELPING ALL OF
US THROUGH THIS SITUATION BY PROVIDING A COMBINATION OF
POLICY ADVICE AND FINANCIAL ASSISTANCE. 11 THE
POLITICAL LEADERSHIP OF THE U.N. MUST BE MATCHED BY THE
ECONOMIC LEADERSHIP OF THE I.M.F. AND THE WORLD BANK.
1111
SECRETARY BRADY WILL BE MAKING SOME SPECIFIC
SUGGESTIONS IN HIS REMARKS FOR POSSIBLE MEANS OF
UTILIZING CURRENT I.M.F. AND WORLD BANK PROGRAMS MORE
EFFECTIVELY. BUT LET ME SAY IT AGAIN: WE ARE
DETERMINED NOT TO ALLOW THE BRUTAL BEHAVIOR OF ONE
AGGRESSOR TO UNDERMINE THE HISTORIC PROCESS OF
DEMOCRATIC CHANGE -- OR TO DERAIL THE MOVEMENT TOWARDS
MARKET-ORIENTED ECONOMIC SYSTEMS.
- 7 -
LET ME CONTINUE, MORE BROADLY, WITH A VISION OF
THE ROLE OF THE UNITED STATES -- AND OF A WORLD ECONOMY
WE CAN ALL SHARE.
FIRST, WE BELIEVE THAT THE UNITED STATES SHOULD
CONTRIBUTES TO ECONOMIC STABILITY AND GROWTH. AND
PERHAPS THE GREATEST CONTRIBUTION THE UNITED STATES CAN
MAKE TO THE HEALTH OF THE INTERNATIONAL ECONOMY IS TO
GET OUR OWN HOUSE IN ORDER. OUR BUDGET DEFICIT MUST BE
BROUGHT UNDER CONTROL AND REDUCED.
- 8 -
SECOND, THE UNITED STATES IS STRONGLY COMMITTED TO
PROMOTING DEVELOPMENT AND GROWTH IN THE NEWLY EMERGING
DEMOCRACIES OF LATIN AMERICA, CENTRAL AND EASTERN
EUROPE, AFRICA AND ASIA. WE'RE WORKING IN ALL FOUR
REGIONS TO EASE DEBT BURDENS UNDER THE BRADY PLAN. IN
THIS HEMISPHERE, WHERE DEBT OVERHANG IMPEDES PROGRESS,
WE ANNOUNCED THE ENTERPRISE FOR THE AMERICAS INITIATIVE
TO PROMOTE ECONOMIC GROWTH BY EXPANDING TRADE AND
INVESTMENT, TO REDUCE DEBT OWED TO THE UNITED STATES
GOVERNMENT, AND TO PROVIDE FUNDS FOR NEEDED LOCAL
ENVIRONMENTAL PROJECTS. IN EASTERN EUROPE, WHERE
MASSIVE RESTRUCTURING IS NEEDED, WE ARE WORKING WITH
OTHER NATIONS TO PROVIDE BILLIONS OF DOLLARS IN
ASSISTANCE TO THE NEWLY EMERGING DEMOCRACIES. AND IN
AFRICA, WHERE UNDERDEVELOPMENT HANGS ON so STUBBORNLY,
MANY OF THE LOWEST-INCOME COUNTRIES HAVE ALREADY
BENEFITTED FROM REDUCTIONS IN DEBT OWED TO THE U.S.
- 9 -
THIRD, THE UNITED STATES IS COMMITTED TO THE
CENTRAL ROLE OF THE I.M.F. AND WORLD BANK IN HELPING
BRING ABOUT ECONOMIC REFORMS. REFORM EFFORTS CAN ONLY
BE SUCCESSFUL IF COUNTRIES CARRY THROUGH ON THEIR
RESPONSIBILITIES. AND THAT MEANS REGULATORY REFORM AND
PRIVATIZATION, SOUND MACRO-ECONOMIC AND STRUCTURAL
POLICIES, AND OPEN BORDERS FOR TRADE AND INVESTMENT.
THIS IS WHY YOUR WORK HERE IN WASHINGTON THIS WEEK
IS so IMPORTANT. FOR MORE THAN 40 YEARS, THE FUND AND
THE BANK HAVE BEEN QUIETLY ENLISTING THE TALENTS AND
THE ENERGIES OF THE DEVELOPED AND DEVELOPING WORLD IN A
GLOBAL STRUGGLE AGAINST POVERTY. AND TODAY, IN A WORLD
WHERE IDEOLOGY NO LONGER CONFRONTS, AND BIG-POWER BLOCS
NO LONGER DIVIDE, THE BANK AND THE FUND HAVE BECOME
PARADIGMS OF INTERNATIONAL COOPERATION. INDEED, WE
ESPECIALLY APPRECIATE YOUR EFFORTS IN CARRYING OUT A
STUDY OF THE SOVIET ECONOMY THAT IS UNPRECEDENTED IN
ITS SCOPE. THIS STUDY WILL PRODUCE RECOMMENDATIONS FOR
ECONOMIC, FINANCIAL, AND STRUCTURAL REFORM.
- 10 -
AS THE COMING WEEK UNFOLDS, PART OF YOUR TASK WILL
ALSO BE TO PLAN FOR THE FUTURE OF YOUR TWO GREAT
INSTITUTIONS. AND I PLEDGE THE CONTINUED SUPPORT OF
THE UNITED STATES FOR A WORLD BANK AND I.M.F. WHICH so
CLEARLY ADVANCE OUR COMMON STRUGGLE TO IMPROVE THE
QUALITY OF LIFE FOR ALL PEOPLE EVERYWHERE.
FOR THIS REASON, WE STRONGLY SUPPORT THE I.M.F.
QUOTA INCREASE AND THE STRENGTHENING OF THE I.M.F.
ARREARS POLICY. AND WE WOULD ALSO LIKE TO CHALLENGE
BOTH INSTITUTIONS TO INTENSIFY THEIR FOCUS ON BUILDING
DYNAMIC PRIVATE SECTORS IN MEMBER COUNTRIES -- ONE OF
THE MOST IMPORTANT STIMULANTS FOR ENERGIZING THESE NEW
MARKET ECONOMIES.
AND WE WOULD ALSO ASK THE WORLD BANK TO PLACE A
HIGH PRIORITY ON THREE OTHER ISSUES VITAL TO SOUND AND
SUSTAINED GROWTH. FIRST IS PROTECTING THE ENVIRONMENT.
AS I SAID HERE LAST YEAR: ENVIRONMENTAL DESTRUCTION
KNOWS NO BORDERS. 11 SECOND, ERADICATING POVERTY MUST
CONTINUE TO BE A CENTRAL MISSION OF THE BANK. 11 AND
THIRD, WE STRONGLY SUPPORT GREATER EFFORTS TO INTEGRATE
WOMEN INTO THE DEVELOPMENTAL PROCESS.
- 11 -
FINALLY, AS WE PLAN FOR THE FUTURE, WE MUST WORK
TOGETHER FOR SUCCESS IN ANOTHER IMPORTANT INTERNATIONAL
ECONOMIC INSTITUTION -- THE GATT.
AS WE MEET TODAY, LESS THAN 70 DAYS REMAIN IN THE
FOUR-YEAR URUGUAY ROUND OF GLOBAL TRADE TALKS. LASTING
REFORM IS ESSENTIAL FOR DEVELOPED AND DEVELOPING
COUNTRIES ALIKE. IT IS THE KEY TO A SUCCESSFUL ROUND
WHICH ESTABLISHES NEW RULES AND OPPORTUNITIES FOR ALL
COUNTRIES. THESE NEGOTIATIONS ARE ONE OF THE WORLD'S
GREATEST ECONOMIC OPPORTUNITIES OF THE DECADE. BUT
MUCH REMAINS TO BE DONE.
THE ROUND IS NOT JUST A TRADE ISSUE, IT IS A
GROWTH ISSUE. AND IT'S NOT JUST AN EXERCISE FOR
BUREAUCRATS IN GENEVA. THE TRADE TALKS ARE THE "LAST
TRAIN LEAVING THE STATION," AND COUNTRIES THROUGHOUT
THE WORLD MUST JUMP ABOARD. IT CAN BE THE ENGINE OF
ECONOMIC GROWTH THAT CARRIES US INTO THE 21ST CENTURY.
- 12 -
THE ROUND PROMISES TO REMOVE BARRIERS IN FOUR
CRUCIAL AREAS, AREAS UNTOUCHED IN PREVIOUS ROUNDS:
SERVICES, INVESTMENT, INTELLECTUAL PROPERTY AND
AGRICULTURE. AS A MATTER OF FACT, AGRICULTURAL REFORM
REMAINS A MAJOR STUMBLING BLOCK. INDEED, IT THREATENS
TO BRING DOWN THE REST OF THE ROUND.
WE MUST LET FARMERS COMPETE WITH FARMERS, INSTEAD
OF FARMERS COMPETING WITH THE DEEP POCKETS OF
GOVERNMENT TREASURIES. WE NEED A SUCCESSFUL RESOLUTION
OF THE AGRICULTURAL ISSUES IF WE ARE TO HAVE AN
AGREEMENT.
IF COUNTRIES AROUND THE GLOBE DON'T MUSTER THE
POLITICAL COURAGE TO FACE THESE TOUGH ISSUES IN THE
TIME REMAINING, WE WILL FORFEIT NEW MARKETS FOR OUR
BUSINESSES, IMPOSE HIGHER PRICES ON OUR CONSUMERS, AND
FORGO NEW JOBS AND HIGHER INCOMES FOR WORKERS IN ALL
COUNTRIES. III
- 13 -
WORST OF ALL, WE WILL ENDANGER A VITAL, PROVEN
FRAMEWORK OF INTERNATIONAL COOPERATION. A COLLAPSE OF
THE ROUND WILL INEVITABLY ENCOURAGE INCREASED
PROTECTIONIST PRESSURE AND POLITICAL INSTABILITY. THAT
IS SOMETHING WE CAN ILL AFFORD AS WE FORGE A NEW
PARTNERSHIP OF NATIONS AGAINST AGGRESSION IN THE
PERSIAN GULF. III
I URGE YOU TO WORK ACTIVELY WITHIN YOUR
GOVERNMENTS TO ENSURE SUCCESS. AND I URGE MY
COUNTERPARTS AROUND THE WORLD -- AS WE DID AT THE
HOUSTON ECONOMIC SUMMIT -- TO INSTRUCT YOUR NEGOTIATORS
TO BRING ALL THE COMPONENTS OF THE URUGUAY ROUND TO A
SUCCESSFUL CONCLUSION BY DECEMBER. III
IN ALL THESE EFFORTS, THERE IS MUCH AT STAKE.
ALMOST 35 YEARS AGO, PRESIDENT EISENHOWER FIRST
APPEARED AT AN I.M.F./WORLD BANK MEETING. HE SPOKE OF
THE LESSONS HE LEARNED WHILE WAGING A WAR THAT BROUGHT
TOGETHER SO MANY DIFFERENT SOLDIERS FROM so MANY
DIFFERENT LANDS.
- 14 -
IKE NOTED, AS I DO NOW, THAT THERE WERE PEOPLE IN
THE AUDIENCE WHO WERE OUR ALLIES IN THAT GRAND EFFORT.
HE SAID:
"WE EARLY FOUND ONE THING: WITHOUT THE HEART,
WITHOUT THE ENTHUSIASM FOR THE CAUSE IN WHICH WE WERE
WORKING, NO COOPERATION WAS POSSIBLE. WITH THAT
ENTHUSIASM -- SUBORDINATING ALL ELSE TO THE ADVANCEMENT
OF THE CAUSE -- COOPERATION WAS EASY." III
AS THE UNITY OF THE UNITED NATIONS HAS
DEMONSTRATED IN THE PAST TWO MONTHS, THE WORLDWIDE
ENTHUSIASM FOR TODAY'S NOBLE "CAUSE" -- THE CAUSE I'VE
DESCRIBED AS A "NEW PARTNERSHIP OF NATIONS" -- IS NOT
ONLY UNPRECEDENTED, BUT TRULY REMARKABLE. AND I URGE
YOU TO SEIZE THAT ENTHUSIASM IN YOUR MEETINGS THIS
WEEK, TO FORGE THE NEW LEVELS OF COOPERATION NEEDED TO
SUCCEED.
THANK YOU FOR COMING TO WASHINGTON. GOOD LUCK
THIS WEEK IN THE MEETINGS AHEAD. AND GODSPEED YOU IN
YOUR TRAVELS HOME.
#
#
#
THE WHITE HOUSE
washington
SCHEDULE OF THE PRESIDENT
FOR
WASHINGTON, D.C.
TUESDAY, SEPTEMBER 25, 1990
EVENT:
Address World Bank/International Monetary Fund Meeting
DRESS:
Men
- Business Suit
Women
- Day Dress
CONTACT:
Office of Presidential Advance
John G. Keller, Jr.
- 202/456-7565
Trip Coordinator
Patricia L. Conrad
- 202/456-7565
ADVANCE:
Kelley Walker
- LEAD
Spence Geissinger
- PRESS
Jack Rohmer
- USSS
Wayne Justice
- MIL. AIDE
Larry Fisher
- WHCA
WEATHER:
Sunny/Low 70's
SCHEDULE OF THE PRESIDENT
FOR
WASHINGTON, D.C.
TUESDAY, SEPTEMBER 25, 1990
2:45 pm
THE PRESIDENT boards Motorcade and departs
White House en route Sheraton Washington Hotel.
MOTORCADE ASSIGNMENTS:
Lead
Spare
B. Caughman
Doctor
LIMO
THE PRESIDENT
Sec. Brady
Follow Up
Control
Gov. Sununu
R. Gates
Mil. Aide
Support
S. Rogich
M. Fitzwater
J. Swift
Official Photographer
Medic
Staff I
All Remaining Staff
Press Van I
J. Herrick
Press Van II
(Drive Time: 10 Minutes)
2:55 pm
THE PRESIDENT arrives Sheraton Washington Hotel
and proceeds to Holding Room.
Met by:
Mr. John McKennon, Jr.
Managing Director, Sheraton Washington Hotel
Mr. Barry Hammond
Convention Coordinator, Sheraton Washington Hotel
2:57 pm
THE PRESIDENT arrives Holding Room.
2:58 pm
THE PRESIDENT, accompanied by Secretary Brady,
departs Holding Room and proceeds to Off-Stage
Announcement Area, Ballroom.
2:59 pm
THE PRESIDENT, accompanied by Secretary Brady,
arrives Off-Stage Announcement Area, Ballroom and
holds briefly.
Met by:
Mr. George Saitoti
Chairman, International Monetary Fund (IMF),
and World Bank Group, and Vice President, Kenya
Mr. Timothy Thahane
Vice President and Secretary, World Bank Group
Mr. Leo Van Houtven
Secretary, International Monetary Fund
Mr. Michael Camdessus
Managing Director, World Bank Group
Page Two
Mr. Barber Conable
President, World Bank Group
NOTE: IMF and World Bank participants will
be escorted to their positions on the
Dais.
EVENT:
ADDRESS WORLD BANK/INTERNATIONAL MONETARY FUND
MEETING
OPEN PRESS
OFF-STAGE ANNOUNCEMENT
REMARKS
TELEPROMPTER
3:00 pm
THE PRESIDENT, accompanied by Secretary Brady, is
announced onto Dais and proceeds to Seat.
3:01 pm
THE PRESIDENT is introduced for Remarks by
Secretary Brady.
3:02 pm
THE PRESIDENT gives Remarks.
3:17 pm
THE PRESIDENT concludes Remarks, departs
Stage and proceeds to Holding Room.
3:20 pm
THE PRESIDENT arrives Holding Room.
3:25 pm
THE PRESIDENT departs Holding Room and proceeds to
Motorcade
3:30 pm
THE PRESIDENT boards Motorcade and departs
Sheraton Washington Hotel en route White House.
Page Three
MOTORCADE ASSIGNMENTS:
Same as on Arrival, except:
LIMO
THE PRESIDENT
(Drive Time: 10 Minutes)
3:40 pm
THE PRESIDENT arrives White House.
Page Four
THE WHITE HOUSE
WASHINGTON
September 21, 1990
INFORMATION
MEMORANDUM FOR THE PRESIDENT
THROUGH:
CHRISS WINSTON cw
FROM:
EDWARD E. MCNALLY qun
SUBJECT:
REMARKS TO WORLD BANK/IMF ANNUAL MEETING
I.
SUMMARY
On Tuesday, Sept. 25, at 3:00 p.m., you will address
the annual meeting of the World Bank and International
Monetary Fund at the Sheraton Washington on Connecticut
Avenue. The audience will consist of about 3,500 bankers
and government finance officials from around the world. You
spoke at this same event one year ago.
II. DISCUSSION
The remarks (14 minutes, on teleprompter) were prepared
in accordance with guidance from World Bank President Barber
Conable, the Treasury Department, the U.S. Trade
Representative, Stephen Farrar of Roger Porter's office and
Meg Lundsager of the NSC.
Two sections may be of particular interest to the
public: a call for the World Bank and IMF to match the
political leadership of the U.N. with economic leadership;
and tough language recommended by USTR on the Uruguay Round
of the GATT.
McNally/Simon
September 21, 1990
Draft Five (B:IMF)
PRESIDENTIAL REMARKS: 1990 IMF/WORLD BANK ANNUAL MEETING
SHERATON WASHINGTON HOTEL
TUESDAY, SEPT. 25, 1990, 9:30 A.M.
Thank you all very much. And thanks especially to my good
friend Nick Brady -- for those kind words -- and for the
outstanding job you're doing as our Secretary of the Treasury.
Chairman Saitoti [si-TOE-tee]. Mr. Camdessus [KAHN-deh-
soo]. My old friend Barber Conable. It really is a pleasure to
be back with you this year, to welcome you all to Washington for
this important work.
And it is a particular X pleasure today to welcome the new
X
members from Bulgaria, Czechoslovakia, and Namibia, and, of
458-0242 world
course, the special invitees from the Soviet Union. Your
presence here reminds us all of how events of the past year are
producing a new partnership of nations -- a fundamental, indeed
inspiring change in the world's political and economic order.
The movement toward democratic rule -- already strong
throughout the 1980's -- accelerated during what I call the
Revolution of '89. The rights of the individual have been
reaffirmed, with greater adherence to the rule of law.
The freedom to choose political leaders -- and even
political systems -- has triumphed in countries that only a year
ago were ruled by single-party regimes. And hand-in-hand, new
economic freedom has begun to emerge as well.
Today, leaders around the world are turning to market forces
to meet the needs of their people. Of course, change has not
come easily. But as I said last year, at this same meeting:
"The jury is no longer out. History has decided." III
And today, the results of that global experiment are
unmistakable. Today, the consensus is this:
Governments by themselves cannot deliver prosperity.
Rather, the key to economic growth is setting individuals
free -- free to take risks, free to make choices, free to use
their initiative and abilities in the marketplace. We are seeing
this, for example, in the restoration of private ownership in
countries where the state once controlled every aspect of
economic life. And for efficient production -- private ownership
is still the most powerful incentive known to Man. III
Matched by the rejuvenation of markets, the ability to make
individual economic choices is the fastest, most effective way to
achieve and sustain broad-based economic growth. And that is why
leaders everywhere are undertaking difficult economic reforms,
building stronger, more versatile private sectors, improving
efficiency, and making governmental decision-making more
rational.
That process takes time. Economic adjustment is often
difficult. And in recent months, a new challenge has arisen
which could hinder this process of change: Iraq's illegal and
unprovoked aggression against the sovereign nation of Kuwait.
Clearly, the greatest harm is to Kuwait and its people. And
when the Saudi border was opened, Kuwait's newest refugees
3
brought fresh tales of the cruelty and horror inflicted on the
Kuwaiti people and foreign nationals by the occupying forces of
Saddam Hussein.
And today, many other countries -- already facing painful
economic and political transformations -- must now deal with
added hardships. Serious challenges have emerged for countries
rocked by unpredictable tides in the flow of oil, trade,
displaced workers, and refugees.
And an even larger group of countries represented here will
suffer from higher oil prices and other economic dislocations.
While world attention has rightly focused on those countries
closest to the situation and bearing the heaviest economic
burden, I can tell you that the rest of the developing world is
certainly not forgotten, and never will be.
This gathering of world financial leaders gives us an oppor-
tunity to discuss how we can work together to address the special
financial burden of this crisis -- and do so in a way that will
sustain the dramatic, worldwide transition to free markets.
The IMF and World Bank -- given their central role in the
world economy -- are key to helping all of us through this
situation by providing a combination of policy advice and
financial assistance. 11 The political leadership of the U.N.
must be matched by the economic leadership of the I.M.F. and the
World Bank.
Secretary Brady will be making some specific suggestions in
his remarks for possible means of utilizing current IMF and World
4
Bank programs more effectively. But let me say it again: We are
determined not to allow the brutal behavior of one aggressor to
undermine the historic process of democratic change -- or to
derail the movement towards market-oriented economic systems.
Let me continue, more broadly, with a vision of the role of
the United States -- and of a world economy we can all share.
First, we believe that the United States should contributes
to economic stability and growth. And perhaps the greatest
contribution the United States can make to the health of the
international economy is to get our own house in order. Our
budget deficit must be brought under control and reduced.
Second, the United States is strongly committed to promoting
development and growth in the newly emerging democracies of Latin
America, Central and Eastern Europe, Africa and Asia. We're
working in all four regions to ease debt burdens under the Brady
Plan. In this hemisphere, where debt overhang impedes progress,
we announced the Enterprise for the Americas Initiative to
promote economic growth by expanding trade and investment, to
reduce debt owed to the United States government, and to provide
funds for needed local environmental projects. In Eastern
Europe, where massive restructuring is needed, we are working
with other nations to provide billions of dollars in assistance
to the newly emerging democracies. And in Africa, where
underdevelopment hangs on so stubbornly, many of the lowest-
income countries have already benefitted from reductions in debt
owed to the U.S.
5
Third, the United States is committed to the central role of
the IMF and World Bank in helping bring about economic reforms.
Reform efforts can only be successful if countries carry through
on their responsibilities. And that means deregulatory reform
and privatization, sound macro-economic and structural policies,
and open borders for trade and investment.
This is why your work here in Washington this week is so
important. For almost fifty years, the Fund and the Bank have
been quietly enlisting the talents and the energies of the
developed and developing world in a global struggle against
poverty. And today, in a world where ideology no longer
confronts, and big-power blocs no longer divide, the Bank and the
Fund have become paradigms of international cooperation. Indeed,
we especially appreciate your efforts in carrying out a study of
the Soviet economy that is unprecedented in its scope. This
study will produce recommendations for economic, financial, and
structural reform, and will establish criteria under which
Western assistance could support such reform.
As the coming week unfolds, part of your task will also be
to plan for the future of your two great institutions. And I
pledge the continued support of the United States for a World
Bank and IMF which so clearly advance our common struggle to
improve the quality of life for all people everywhere.
For this reason, we strongly support the IMF quota increase
and the strengthening of the IMF arrears policy. And we would
also like to challenge both institutions to intensify their focus
6
on building dynamic private sectors in member countries -- one of
the most important stimulants for energizing these new market
economies.
And we would also ask the World Bank to place a high
priority on three other issues vital to sound and sustained
growth. First is protecting the environment. As I said here
last year: Environmental destruction knows no borders.
Second, eradicating poverty must continue to be a central mission
of the Bank. 11 And third, we strongly support greater efforts
to integrate women into the developmental process.
Finally, as we plan for the future, we must work together
for success in another important international economic
institution -- the GATT.
As we meet today, less than 70 days remain in the four-year
Uruguay Round of global trade talks. These negotiations are one
of the world's greatest economic opportunities of the decade.
But much remains to be done.
The Round is not just a trade issue, it is a growth issue.
And it's not just an exercise for bureaucrats in Geneva. The
trade talks are the "last train leaving the station," and
countries throughout the world must jump aboard. It can be the
engine of economic growth that carries us into the 21st century.
The Round promises to remove barriers in four crucial areas,
areas untouched in previous rounds: services, investment,
intellectual property and agriculture. As a matter of fact,
agricultural reform remains a major stumbling block. Indeed, it
7
threatens to bring down the rest of the Round.
We must let farmers compete with farmers, instead of farmers
competing with the deep pockets of government treasuries. We
need a successful resolution of the agricultural issues if we are
to have an agreement.
If countries around the globe don't muster the political
courage to face these tough issues in the time remaining, we will
forfeit new markets for our businesses, impose higher prices on
our consumers, and forgo new jobs and higher incomes for workers
in all countries. III
Worst of all, we will endanger a vital, proven framework of
international cooperation. A collapse of the Round will
inevitably encourage increased protectionist pressure and
political instability. That is something we can ill afford as we
forge a new partnership of nations against aggression in the
Persian Gulf. III
I urge you to work actively within your governments to
ensure success. And I urge my counterparts around the world --
as we did at the Houston Economic Summit -- to instruct your
negotiators to bring all the components of the Uruguay Round to a
successful conclusion by December. III
In all these efforts, there is much at stake. Almost 35
years ago, President Eisenhower first appeared at an IMF/World
Bank meeting. He spoke of the lessons he learned while waging a
war that brought together so many different soldiers from so many
different lands.
8
Ike noted, as I do now, that there were people in the
audience who were our allies in that grand effort. He said:
"We early found one thing: Without the heart, without the
enthusiasm for the cause in which we were working, no cooperation
was possible. with that enthusiasm -- subordinating all else to
the advancement of the cause -- cooperation was easy." III
As the unity of the United Nations has demonstrated in the
past two months, the worldwide enthusiasm for today's noble
"cause" -- the cause I've described as a "new partnership of
nations" -- is not only unprecedented, but truly remarkable. And
I urge you to seize that enthusiasm in your meetings this week,
to forge the new levels of cooperation needed to succeed.
Thank you for coming to Washington. Good luck this week in
the meetings ahead. And Godspeed you in your travels home.
#
#
#
S
Sheraton Washington
HOTEL
2660 WOODLEY RD., AT CONN. AVE., N.W., WASHINGTON, D.C. 20008
PHONE: (202) 328-2000 FAX: (202) 234-0015
ITT Sheraton
3:00 pm speech
Brady introduces
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McNally/Simon
September 18, 1990
Draft Four (B:IMF)
PRESIDENTIAL REMARKS: 1990 IMF/WORLD BANK ANNUAL MEETING
SHERATON WASHINGTON HOTEL
TUESDAY, SEPT. 25, 1990, 9:30 A.M.
Thank you all very much. And thanks especially to my good
friend Nick Brady -- for those kind words -- for the outstanding
job you' re doing as our Secretary of the Treasury.
[SI-TOE-tee] [Kahm-Deh-soo]
Chairman Saitoti. Mr. Camdessus. My old friend Barber
Conable. It really is a pleasure to be back with you this year,
to welcome you all to Washington for this important work.
And it is a particular pleasure today to welcome the special
invitees from the Soviet Union. Your presence here reminds us
all of how events of the past year have produced a new partner-
ship of nations -- a fundamental, indeed inspiring change in the
world's political and economic order.
The movement toward democratic rule -- already strong
throughout the 1980's -- accelerated during what I call the
Revolution of '89. The rights of the individual have been
reaffirmed, with greater adherence to the rule of law.
The freedom to choose political leaders -- and even
political systems -- has triumphed in countries that only a year
ago were ruled by single-party regimes. And hand-in-hand, new
economic freedom has begun to emerge as well.
Today, leaders around the world are turning to market forces
to meet the needs of their people. Change has not come easily.
And many other approaches have been tried. But as I said last
2
year, at this same meeting:
Q-27-89
"The jury is no longer out. History has decided." III
And today, the results of that global experiment are
unmistakable. Today, the consensus is this:
Governments by themselves cannot deliver prosperity.
Rather, the key to economic growth is setting individuals
free -- free to take risks, free to use their initiative and
abilities in the marketplace. We are seeing this, for example,
in the restoration of private ownership in countries where the
state once owned or controlled all aspects of economic life. And
for efficient production -- private ownership is still the most
powerful incentive known to Man.
Matched by the rejuvenation of markets, the ability to make
individual economic choices is the fastest, most effective way to
see broad-based economic growth. And that is why leaders every-
where are undertaking difficult economic reforms, building
stronger, more versatile private sectors, improving efficiency,
and making decisionmaking more rational.
That process takes time. Economic adjustment is always
difficult. And in recent months, a new challenge has arisen
which could hinder this process of change: Iraq's illegal and
unprovoked aggression against the sovereign nation of Kuwait.
Clearly, the greatest harm is to Kuwait and its people. And
when the Saudi border was opened last week, Kuwait's newest
refugees brought fresh tales of the cruelty and horror inflicted
by the barbarous forces unleashed by Saddam Hussein.
3
And today, many other countries -- already facing painful
transformations -- must now deal with added hardships. Serious
challenges have emerged for countries rocked by unpredictable
tides in the flow of oil, tradé, displaced workers, and refugees.
And an even larger group of countries represented here will
suffer from higher oil prices and other economic dislocations.
While world attention has rightly focused on those countries
closest to the situation and bearing the heaviest economic
burden, I can tell you that the rest of the developing world is
not forgotten, your hardships are not being ignored.
This gathering of world financial leaders gives us an oppor-
tunity to discuss how we can work together to address the special
financial burden of this crisis -- and do so in a way that will
sustain the dramatic, worldwide transition to free markets.
The IMF and World Bank -- given their central role in the
world economy -- are key to helping all of us through this crisis
by providing a combination of policy advice and financial
assistance. 11 Because in this crisis, the political leadership
of the U.N. must be matched by the economic leadership of the
I.M.F. and the World Bank.
Secretary Brady will be making some specific suggestions in
his remarks for possible means of utilizing current IMF and World
Bank programs more effectively. But let me say it again: We are
determined not to allow the brutal behavior of one aggressor to
undermine the historic process of democratic change --- or to
derail the movement towards market economic systems.
III
4
Let me continue, more broadly, with my vision of the role of
the United States -- and of a world economy we can all share.
First, we are committed to a United States which contributes
to economic stability and growth. And perhaps the greatest
contribution the United States can make to the health of the
international economy is to get our own house in order. Our
budget deficit will be brought under control and reduced. [[Last
week's agreement
]]
Second, the United States is strongly committed to promoting
development and growth in the newly emerging democracies of Latin
America, Eastern Europe, Africa and Asia. We're working in all
four regions to ease debt burdens under the Brady Plan. In this
hemisphere, we announced the Enterprise for the Americas Initia-
tive to promote economic growth by expanding trade and invest-
ment, and by reducing debt owed to the United States government.
In Eastern Europe, we are working with other nations to provide
billions of dollars in assistance to the newly emerging demo-
cracies. And in Africa, many of the lowest-income countries have
already benefitted from reductions in debt owed to the U.S.
Third, all these areas of progress have one important ele-
ment in common -- the central role of the IMF and World Bank in
helping bring about economic reforms. Reform efforts can only be
successful if the beneficiary countries carry through on their
responsibilities. And that means deregulation, sound macro-
economic policies, and open borders for trade and investment.
This is why your work here in Washington this week is so
5
important. The international community looks to you to provide
three-dimensional responses to a changing world. And for good
reason. Your two institutions have evolved into powerful forces
for promoting free markets.
The Fund and the Bank have been indispensable players in the
economic transformation sweeping Eastern Europe, Latin America
and other regions, through their support for economic reforms and
their role in the debt strategy. We also appreciate your efforts
in carrying out the unprecedented study of the Soviet economy.
This study will produce recommendations for economic, financial,
and structural reform, and will establish criteria under which
Western assistance could support such reform.
As the coming week unfolds, part of your task will also be
to plan for the future of your two great institutions. The Fund
and the Bank must be in a strong position to continue their
encouragement of economic reforms and adjustment efforts.
For this reason, we strongly support the IMF quota increase
and the strengthening of the IMF arrears policy. And we would
also like to challenge both institutions to focus on building
dynamic private sectors in member countries -- one of the most
important stimulants for energizing these new market economies.
And we would also ask the World Bank to place a high
priority on three other issues vital to sound and sustained
growth. First is protecting the environment. As I said here
last year: Environmental destruction knows no borders.
Second, poverty alleviation must continue to be a central mission
6
of the Bank. 11 And third, we strongly support greater efforts
to integrate women into the developmental process.
Finally, as we plan for the future, we must work together
for success in the other great post-war international economic
institution --, the GATT.
As we meet today, less than 70 days remain in the four-year
Uruguay Round of global trade talks. But much remains to be
done. Agricultural reform remains a major stumbling block.
Indeed, it threatens to bring down the rest of the Round.
The Round is not just a trade issue, it is a growth issue.
It can be the engine of economic growth that carries us into the
21st century. It promises to remove barriers in three crucial
areas, three areas untouched in previous rounds: services,
investment, and intellectual property. But if we fail to achieve
an agreement, we will forfeit new markets for our businesses,
force higher prices for our consumers, and block new jobs and
higher incomes for our workers. III
Worst of all, we will endanger a vital, proven framework of
international cooperation. The collapse of the Round will
inevitably encourage increased protectionist pressure and
political instability. That is something we can ill afford at a
time when we are trying to forge a new partnership of nations,
and when we are engaged in a great struggle against aggression in
the Persian Gulf. III
Therefore, I urge you who to work actively within your
governments to ensure success. And I urge my counterparts around
7
the world -- as we did at the Houston Economic Summit -- to
instruct your negotiators to bring the Uruguay Round to a
successful conclusion by December. III
In all these efforts, there is much at stake. Almost 35
years ago, when President Eisenhower first appeared at an
IMF/World Bank meeting, he spoke about one of the lessons he
learned while waging a war that brought together so many
different soldiers from so many different lands.
Ike noted, as I do now, that there were people in the
audience who were our allies in that grand effort. He said:
"We early found one thing: Without the heart, without the
enthusiasm for the cause in which we were working, no cooperation
was possible. With that enthusiasm -- subordinating all else to
the advancement of the cause -- cooperation was easy." III
As the unity of the United Nations has demonstrated in the
past two months, the worldwide enthusiasm for today's noble
"cause" -- the cause I've described as a "new partnership of
nations" -- is not only unprecedented, but truly astounding. And
I urge you to seize that enthusiasm in your meetings this week,
to forge the new levels of cooperation needed to succeed.
Thank you for coming to Washington. Good luck this week in
the meetings ahead. And Godspeed you in your travels home.
#
#
#
McNally/Simon
September 18, 1990
Draft Three (B:IMF)
PRESIDENTIAL REMARKS: 1990 IMF/WORLD BANK ANNUAL MEETING
SHERATON WASHINGTON HOTEL
TUESDAY, SEPT. 25, 1990, 9:30 A.M.
Thank you all very much. And thanks especially to my good
friend Nick Brady -- for those kind words -- for the outstanding
job you're doing as our Secretary of the Treasury.
saitoti
[Si-TOE-tee]
458-0242
Chairman Lee. Mr. Camdessus. My old friend -- former
Ranga
Congressman, now World Bank President -- Barber Conable. It
really is a pleasure to be back with you and your colleagues this
year, to once again welcome you all to Washington, and to wish
you well in your important work.
And it is a particular pleasure today to welcome the special
invitees from the Soviet Union. Your presence here reminds us
all of how events of the past year have produced a new partner-
ship of nations -- a fundamental, indeed inspiring change in the
world's political and economic order. III
The movement toward democratic rule -- already strong
throughout the 1980's -- accelerated during what I call the
Revolution of '89. The rights of the individual have been
reaffirmed, with greater adherence to the rule of law.
The freedom of choice of political leaders -- and even
political systems -- has won acceptance in countries that only
recently abandoned one-party state structures. And hand-in-
hand, new economic freedom has begun to emerge as well.
Today, national leaders around the world, from the Soviet
Union to Eastern Europe to Latin America and Africa, are turning
to market forces to meet the needs of their people. This shift
has not come easily. Many other approaches have been tried.
But as I said last year, at this same meeting: "The jury is
no longer out. History has decided." III
And today, the results of that global experiment are
unmistakable. Today, the consensus is this:
Governments by themselves cannot deliver prosperity.
Rather, the key to economic growth is setting individuals
free -- free to take risks, free to use their initiative and
abilities in the marketplace. We are seeing this, for example,
in the restoration of private ownership in countries where the
state once owned or controlled all aspects of economic life. And
for efficient production --- private ownership is still the most
powerful incentive known to Man.
Matched by the rejuvenation of markets, the ability to make
individual economic choices is the fastest, most effective way to
see broad-based economic growth. And that is why leaders every-
where are undertaking difficult economic reforms, building
stronger, more versatile private sectors, improving efficiency,
and making decisionmaking more rational.
That process takes time. Economic adjustment is always
difficult. And in recent months, a new challenge has arisen
which could hinder this process of change: Iraq's illegal and
unprovoked aggression against the sovereign nation of Kuwait.
Clearly, the greatest harm is to Kuwait and its people. And
when the Saudi border was opened last week, Kuwait's newest
3
refugees brought fresh tales of the cruelty and horror inflicted
by the barbarous forces unleashed by Saddam Hussein.
And today, many other countries -- already facing painful
transformations -- must now deal with added hardships. Serious
challenges have emerged for countries that were dependent on oil
from Iraq and Kuwait, whose workers were displaced, that face
serious refugee problems, or that have suffered trade losses as a
result of Saddam's invasion.
And an even larger group of countries represented here will
suffer from higher oil prices and other economic dislocations
arising out of the Gulf crisis.
While world attention has rightly focused on those countries
closest to the situation and bearing the heaviest economic
burden, I can tell you that the rest of the developing world is
not forgotten, that your hardships are not being ignored.
This gathering of world financial leaders provides us with
an opportunity to discuss how we can work together to address the
special financial burden of this crisis -- and do so in a way
that will sustain the striking transition to free markets that so
many of you are undertaking.
The IMF and World Bank, in their central role in the world
economy, are key to helping all of us through this crisis by
providing a combination of policy advice and financial
assistance. 11 Because in this crisis, the political leadership
of the U.N. must be matched by the economic leadership of the
I.M.F. and the World Bank.
4
Secretary Brady will be making some specific suggestions in
his remarks for possible means of utilizing current IMF and World
Bank programs more effectively. But let me emphasize again that
we are determined not to allow the brutal behavior of one
aggressor to undermine the historic process of democratic change
-- or to derail the movement towards market economic systems. III
Let me continue, more broadly, with my vision of the
leadership role of the United States -- and of a world economy
which I hope we can all share.
First, we are committed to a United States which contributes
to economic stability and growth. And perhaps the greatest
contribution the U.S. can make to the health of the international
economy is to get our own house in order. Our budget deficit
will be brought under control and reduced. [[Last week's
agreement ]]
Second, the United States is strongly committed to promoting
development and growth in the newly-emerging democracies of Latin
America, Eastern Europe, Africa and Asia.
A major concern of many of you has been the debt burden you
carry from the past. We will continue to work with you to ease
that burden through debt restructuring under the Brady Plan. We
have already seen significant progress in this area, bringing
substantial savings to several countries.
This past June, I announced the Enterprise for the Americas
Initiative, which strives to promote economic growth in the
Western Hemisphere by expanding trade and investment, and by
5
reducing debt owed to the United States government. We are
extremely heartened by the positive reception the Initiative has
received from leaders throughout the Americas. And we would
welcome similar actions by other creditor governments.
In Eastern Europe, we are working with other industrial
countries to provide billions of dollars of technical and
financial assistance to newly emerging democracies. While it
will take time to achieve results, the commitment by these
countries to profound economic re-structuring is inspiring.
Finally, many of the lowest income countries in Africa have
already benefitted from reductions in debt owed to the U.S.,
which we hope will enable them to strengthen and broaden their
economic reforms as well. And one of Africa's newest,
independent countries -- Namibia -- will be joining the Fund and
Bank this week, and will soon benefit from the advice and support
of your institutions.
Third, all these areas of progress have one important ele-
ment in common -- the central role of the IMF and World Bank in
helping bring about economic reforms. Reform efforts can only be
successful if the beneficiary countries carry through on their
responsibilities. And that means deregulation, sound macro-
economic policies, and open borders for trade and investment.
This is why your work here in Washington this week is so
important. The nature of our changing world calls increasingly
for coordinated and cooperative responses. The international
community looks to you to provide the focus for this
6
coordination. And for good reason. These institutions have
evolved into powerful forces for promoting free markets.
The Fund and the Bank have played a key role as we have
responded to the needs of Eastern Europe. They have provided
vital support -- both financial support and sound policy advice
-- to Poland and Hungary. We now welcome Czechoslovakia and
Bulgaria into their ranks.
We also appreciate the efforts of the IMF, World Bank and
other institutions in carrying out a detailed study of the Soviet
economy, an effort that was discussed at the Economic Summit we
hosted in Houston. This study will produce recommendations for
economic, financial, and structural reform, and will establish
criteria under which Western assistance could support such
reform. And this study has been given added importance by the
recent debate in the Soviet Union over alternative economic
restructuring plans.
The Fund and the Bank have also been indispensable players
in the economic transformation sweeping Latin America and other
parts of the developing world, through their support for economic
reforms and their role in the debt strategy.
As the coming week unfolds, part of your task will also be
to plan for the future of your two great institutions. We need
to build further on their ability to respond to changing
circumstances. Market-based economies are best able to adapt to
new demands. That is why the Fund and the Bank must be in a
strong position to continue their encouragement of economic
7
reforms and adjustment efforts.
For this reason, I strongly support the IMF quota increase
and the strengthening of the IMF arrears policy as crucial to
keeping the Fund a viable financial institution.
And I would also like to challenge both institutions to
improve their focus on building dynamic private sectors in member
countries. Private investment -- both domestic and foreign --
will be an important stimulant for strengthening newly emerging
market economies.
IFC
And I would also ask the World Bank to place a high priority
on three issues vital to sound and sustained growth. First is
protecting the environment. As I said here last year: Environ-
mental destruction knows no borders. At Houston, for example,
the leaders of the largest industrial democracies recognized the
special role the World Bank can play in helping to halt the
destruction of tropical rain forests. And we urge the Bank to
take prompt and effective action in this and other areas.
Second, poverty alleviation must continue to be a central mission
of the Bank. \\ And third, we strongly support greater efforts
to integrate women into the developmental process.
Finally, as we plan for the future, we must work together
for success in the other great post-war international economic
institution -- the GATT.
As we meet today, less than 70 days remain in the four-year
Uruguay Round of global trade talks. In that time, much remains
to be done. Agricultural reform remains a major stumbling block.
8
Indeed, it threatens to bring down the rest of the Round.
The Round is not just a trade issue, it is a growth issue.
It can be the engine of economic growth that carries us into the
21st century. It promises to remove barriers in three crucial
areas, three areas untouched in previous rounds: services,
investment, and intellectual property. But if we fail to achieve
lose
an agreement, we will forfeit new markets for our businesses,
higher
on
block new
force lower prices for our consumers, and more jobs and higher incomes
for our workers. III
Worst of all, we will endanger a vital, proven framework of
international cooperation. The collapse of the Round will
inevitably encourage increased protectionist pressure and
political instability. That is something we can ill afford at a
time when we are trying to forge a new partnership of nations,
and when we are engaged in a great struggle against aggression in
the Persian Gulf. III
Therefore, I urge those of you who are finance ministers to
work actively within your governments to ensure success. And I
urge my counterparts around the world -- as we did at the Houston
Economic Summit -- to instruct your negotiators to bring the
Uruguay Round to a successful conclusion by December. III
In all these efforts, there is much at stake. Almost 35
years ago, when President Eisenhower first appeared at an
IMF/World Bank meeting, he spoke about one of the lessons he
learned while waging a war that brought together so many
different soldiers from so many different lands.
9
Ike noted, as I do now, that there were people in the
audience who were our allies in that grand effort. He said:
"We early found one thing: Without the heart, without the
enthusiasm for the cause in which we were working, no cooperation
9-28-56
was possible. With that enthusiasm -- subordinating all else to
the advancement of the cause -- cooperation was easy."
As the unity of the United Nations has demonstrated in the
past two months, the worldwide enthusiasm for today's noble
"cause" -- the cause I've described as a "new partnership of
nations" -- is not only unprecedented, but truly astounding. And
I urge you to seize that enthusiasm in your meetings this week,
to forge the new levels of cooperation needed to succeed.
Thank you for coming to Washington. Good luck this week in
the meetings ahead. And Godspeed you in your travels home.
#
#
#
International Finance Corporation
1818 H Street, N.W.
(202) 477-1234
Washington, DC 20433
Cable Address: CORINTFIN
U.S.A.
FAX: (202) 477-6391
September 17, 1990
Mr. Robert Simon
Room 111
Old Executive Office Building
The White House
Washington, D.C. 20500
Dear Bob:
Thank you for taking the time to talk with me earlier in the
week. I would like to follow up with just a couple of points about
how the IFC has helped the President's objectives in the development
field.
Private Sector Development
As the exclusively private sector oriented member of the World
Bank Group, IFC policy dictates that we will only invest in projects
without government guarantees, taking the full project risk of any
endeavor. Unlike many other development agencies, we have a clear
bottom line that makes IFC successes and failures readily apparent.
This one factor, risk-taking and the potential of loss, instills a
market discipline in our operations that may not be evident
elsewhere.
Another key aspect of our operations is that IFC will rarely
finance more than 25% of any project. Our private sector partners
must not only run the project but also put up most of the
financing. This imposes even more discipline on our project
investments. Our partners are in business to generate a profit. If
that is not possible, they will not become involved and IFC must
also withdraw.
"Sustainable development" is another term of art that has been
used in the development field. We view one of the most important
measures of sustainable development as profit. If a project
promises to earn a large profit for its sponsors, it is very likely
to attract private sector monies and continue operation wholly
independent of the government. If no profit can be found, local
government bureaucrats will likely find a way to cut back or
eventually close any continuing drain on the public fisc.
RCA 248423 Western Union 64145
Y-7039
-2-
Latin America
We know that Latin America is one of the Administration's
primary concerns. Latin America has been IFC's number one target of
our investment for many years, reaching up to 48% of our total
portfolio. As an exclusively private sector organization, we are
directly effected by the investment climate of each country. For
example, in Central America, IFC's new investment programs in
Nicaragua and Panama came to a halt in the 1980s. Since the recent
changes in government, IFC immediately sent teams to both countries
to investigate new operations.
Meanwhile, Mexico is now the number one recipient of IFC
funding. Following the completion of the Brady plan debt
restructuring, IFC has been able to reward the Mexican business
community with fresh, voluntary international lending and equity
investments to finance their recovery. In one transaction alone, a
debt-equity swap with the Visa group, IFC was able to reduce the
debt of Mexico by over $1 billion. IFC's record, backed by our own
record of substantial investment, shows that the Brady plan is
working and we are able to provide private sector banks with new
project financing. Similar stories could be told about Chile where
IFC recently introduced the first Latin American company (the
privatized telephone company) to the U.S. equity markets in 20 years.
Eastern Europe
As one of the first multilateral development organizations in
Eastern Europe, we now have an operational track record there. IFC
has pioneered the development of the Polish private agricultural
sector through our first investment approved back in 1988. Since
then, we have made two other investments that have been used as test
cases to help the development of Poland's legal and regulatory
institutions. IFC has also helped to set up a foundation to assist
the government move ahead with its privatization program.
We are now hoping to put together some very large projects
including the privatization of the Gdynia Shipyard (with Norwegian
partners) and the Polish auto industry (with FIAT). IFC also
sponsored a recent conference chaired by Paul Volcker in an effort
to pair Western Banks with the nine Polish commercial banks that
have been split off from the old National Bank of Poland. To help
this process along, IFC is also launching a new commercial bank with
international partners to compete against these banks. IFC also has
a long record of investment in Hungary, where we recently helped to
launch the Budapest Stock Exchange and invested in seven other joint
venture projects.
-3-
The Environment
IFC is active in the environmental field. It is already
obvious that countries that rely on the private sector take better
care of the environment simply because in a system where costs are
more readily determined, environmental costs are more apparent. IFC
has imposed an environmental screening process by which we divide
our proposed projects into categories "A," "B" or "C". "A" projects
now require a full environmental assessment before they move
forward. "B" projects have less potential impacts, such as a hotel
in an urban area, and deserve a less strict environmental review.
"C" projects are largely financial in nature, such as funding for a
stock exchange, and do not have direct environmental impacts.
Beyond simply vetting projects for potential harm, IFC is now
exploring ways to build environmental cleanup companies in the
developing world. Most of the work of cleaning up the environment
in this country is done by the private sector. The American
industry alone tops $62 billion annually. We are seeking to start
similar companies abroad. Our first feasibility study on a specific
country will be ready for the public shortly. This report will
identify 92 environmental companies in Turkey that need foreign
financing to expand their operations. Following Turkey, IFC will
release a report on Mexico.
Small Business
During its 35 years of operation, IFC has found that operations
in Africa tend to be smaller with reduced operating margins. In
order to respond to Africa's unique requirements, IFC now runs the
Africa Project Development Facility using donor funds from A.I.D.
and a number of other agencies. These funds are used to help
African entrepreneurs put together business plans and other
documents that will help them approach commercial lenders with
bankable projects. Since its start, the APDF has been swamped with
over 1,600 applications and created 3,500 new jobs through its
approved projects.
Summary
This is just a brief summary of some of the things IFC is doing
right now. I have enclosed a copy of our recently released Annual
Report and two brochures on our operations in Eastern Europe and the
U.S. partners we work with. I have also enclosed two draft
paragraphs for the speech that may or may not be appropriate for
what you are preparing.
Thank you for taking the time to learn more about IFC. Please
feel free to give me a call at 473-9331 if you have any questions.
Mach Mark Kirk
Encl.
President's Annual Meeting Speech
Countries which take bold steps to restructure their economies
in line with a market-based approach will find that investment
follows. We have already seen clear results in a number of
countries (Chile, Mexico, Venezuela, Morocco, etc.). In taking
these steps, these countries had the strong support of the Bretton
Woods institutions, the Fund and the Bank at the level of policy
reform and the International Finance Corporation at the private
sector investment level.
The Corporation has reached record levels this year in direct
investment and in mobilizing other investors to "bet" on the
countries undergoing structural reform. To ensure the IFC has the
necessary resources to continue to support the adjustment process in
Latin America, Asia and Africa, in addition to taking on new
challenges in E. Europe, we need to reach an early decision on
whether or not to provide a substantial capital increase for the
Corporation.
0123g
DRAFT
McNally/Simon
September 17, 1990
Draft Two (B:IMF)
PRESIDENTIAL REMARKS: 1990 IMF/WORLD BANK ANNUAL MEETING
SHERATON WASHINGTON HOTEL
TUESDAY, SEPT. 25, 1990, 9:30 A.M.
Thank you all very much. And thanks especially to my good
friend Nick Brady -- for those kind words -- for the outstanding
job you're doing as our Secretary of the Treasury.
Chairman Lee. Mr. Camdessus. My old friend -- former
Congressman, now World Bank President -- Barber Conable. It
really is a pleasure to be back with you and your colleagues this
year, to once again welcome you all to Washington, and to wish
you well in your important work.
And it is a particular pleasure to welcome members of the
Soviet delegation, who are attending this meeting as special
invitees. Your presence here reminds us all of how events of the
past year have produced a new partnership of nations --- a
1
fundamental, indeed inspiring change in the world's political and
economic order.
The movement toward democratic rule -- already strong
throughout the 1980's -- accelerated during what I call the
Revolution of '89. The rights of the individual have been
reaffirmed, with greater adherence to the rule of law.
The freedom of choice of political leaders -- and even
political systems -- has won acceptance in countries that only
recently abandoned one-party state structures. And hand-in-
hand, new economic freedom has begun to emerge as well.
Today, national leaders around the world, from the Soviet
Union to Eastern Europe to Latin America and Africa, are turning
to market forces to meet the needs of their people. This shift
has not come easily. Many other approaches have been tried.
But as I said last year, at this same meeting: "The jury is
no longer out. History has decided." III
And today, the results of that global experiment are
unmistakable. When it comes to economic development, there has
never has been clearer evidence of what works and what does not.
Today, the consensus is this: Governments by themselves cannot
deliver prosperity.
The key to economic growth is setting individuals free --
free to take risks, free to use their initiative and abilities in
the marketplace. We are seeing this, for example, in the
restoration of private ownership, which -- for efficient
production -- is still the most powerful incentive known to Man.
Complemented by the rejuvenation of markets, the ability to
make individual economic choices is the most effective -- and
most rapid -- way to achieve broad-based economic growth. And
that is why leaders everywhere are undertaking difficult economic
reforms, to improve efficiency and make decisionmaking more
rational. And an important part of this effort is building
stronger, more versatile private sectors.
That process takes time. Economic adjustment is always
difficult. And in recent months, a new challenge has arisen
3
which could hinder this process of change: Iraq's illegal and
unprovoked aggression against the sovereign nation of Kuwait.
Clearly, the greatest harm is to Kuwait and its people. And
when the Saudi border was opened last week, Kuwaiti refugees
fleeing across the desert brought fresh tales of the cruelty and
horror inflicted by the uncivilized soldiers of Saddam Hussein.
And today, many other countries -- already facing painful
transformations -- must now deal with added hardships. Serious
challenges have emerged for countries that were dependent on oil
from Iraq, whose workers were displaced, that face serious
refugee problems, or that have suffered trade losses as a result
of Saddam's invasion.
And an even larger group of countries represented here will
suffer from higher oil prices and other economic dislocations
arising out of the Gulf crisis.
While world attention has rightly focused on those countries
closest to the situation and bearing the heaviest economic
burden, I can tell you that the rest of the developing world is
not forgotten, that your hardships are not being ignored.
This gathering of world financial leaders provides us with
an opportunity to discuss how we can work together to address the
special financial burden of this crisis -- and do so in a way
that will sustain the striking transition to free markets that so
many of you are undertaking.
The IMF and World Bank, in their central role in the world
economy, are key to helping all of us through this crisis through
4
a combination of policy advice and financial assistance. I know
that the IMF stands ready to provide the needed financial
assistance to cope with emerging economic costs. And we look to
the Fund and the Bank to provide the kind of leadership and
coordination on economic issues that the United Nations is
providing on political dimensions of the crisis.
Secretary Brady will be making some specific suggestions in
his remarks for possible means of utilizing current IMF and World
Bank programs more effectively. But let me emphasize again that
we are determined not to allow the brutal behavior of one
aggressor to undermine the historic process of democratic change
or to derail the movement towards market economic systems. III
Let me continue, more broadly, with my vision of the
leadership role of the United States -- and of a world economy
which I hope we can all share.
First, we are committed to a United States which contributes
to economic stability and growth. And perhaps the greatest
contribution the U.S. can make to the health of the international
economy is to get our own house in order. Our budget deficit
will be brought under control and reduced. [[Last week's
agreement ]]
We will do this in a manner that sustains both our economic
growth, and that of our trade and investment partners. This is a
responsibility we share with the other major industrial
countries, and we will continue to work closely with them to
ensure that we all do our part.
5
Second, the United States is strongly committed to promoting
development and growth, in both developing countries and newly-
emerging democracies in Eastern Europe and elsewhere.
A major concern of many of you has been the debt burden you
carry from the past. We will continue to work with you to ease
that burden through debt restructuring under the Brady Plan --
the debt strategy introduced by Secretary Brady a year ago. We
have already seen significant progress in this area, bringing
major savings to several countries.
This past June, I announced the Enterprise for the Americas
Initiative, designed to improve investment and trade relations in
the Western Hemisphere, while providing some reduction in debt
owed to the United States government.
I would welcome similar actions by other creditor
governments. But you should also know this: We place such a
high priority on this Initiative that we are prepared to pursue
these goals independently.
Through a major collaborative effort of the industrial
countries, we have also provided technical and financial
assistance to the newly emerging democracies of Eastern Europe.
While it will take time to achieve results, the commitment and
perseverance of these countries is inspiring.
Finally, many of the lowest income countries in Africa have
already benefitted from reductions in debt owed to the U.S.,
which we hope will enable them to strengthen and broaden their
economic reforms as well.
6
Third, these efforts can only be successful if the
beneficiary countries carry through on their responsibilities to
reform their economic systems through deregulation, sound macro-
economic policies, and, through opening their borders to trade
and investment.
Fourth, all these areas of progress have one important
element in common -- the central role of the IMF and World Bank
in helping bring about the necessary economic reforms.
This is why your work here in Washington this week is so
important. The nature of our changing world calls increasingly
for coordinated and cooperative responses. The international
community looks to you to provide the focus for this
coordination. And for good reason. These institutions have
evolved into powerful forces for promoting free markets.
The Fund and the Bank have played a key role as we have
responded to the needs of Eastern Europe. They have provided
vital support -- both financial support and sound policy advice
-- to Poland and Hungary. We now welcome Czechoslovakia and
Bulgaria into their ranks.
We also welcome the help of the Fund in preparing a detailed
study of the Soviet economy, an effort that was discussed at the
Economic Summit we hosted in Houston in July. This study will
produce recommendations for reform and will establish criteria
under which Western assistance could support reform. And this
study has been given added importance by the recent debate in the
Soviet Union over alternative economic reform plans.
7
The Fund and the Bank have also been indispensable players
in the economic transformation sweeping Latin America and other
parts of the developing world, through their support for economic
reforms and their role in the debt strategy.
As the coming week unfolds, part of your task will also be
to plan for the future of your two great institutions. We need
to build further on their ability to respond to changing
circumstances. Market-based economies are best able to adapt to
new demands. That is why the Fund and the Bank must be in a
strong position to continue their support for economic reforms
and adjustment efforts.
For this reason, I strongly support the IMF quota increase
and the strengthening of the IMF arrears policy as key to keeping
the Fund a viable financial institution.
And I would also like to challenge both institutions to
improve their focus on building dynamic private sectors in member
countries. Private investment -- both domestic and foreign --
will be an important stimulant to strengthen newly emerging
market economies.
And I would also ask the World Bank to place a high priority
on three issues which we all recognize as vital to sound and
sustained growth. First is protecting the environment. As I
said here last year: Environmental destruction knows no borders.
And we urge the World Bank to take prompt and effective action in
this area, particularly to help halt the destruction of tropical
rain forests. Second, poverty alleviation must continue to
8
be a central mission of the Bank. And third, we strongly
support greater efforts to integrate women into the developmental
process.
Finally, as we plan for the future, we must work together
for success in the other great post-war international economic
institution -- the GATT.
\
As we meet today, less than 70 days remain in the four-year
Uruguay Round of global trade talks. In that time, much remains
to be done. Agricultural reform remains a major stumbling block.
Indeed, it threatens to bring down the rest of the Round.
The Round is not just a trade issue, it is a growth issue.
It can be the engine of economic growth that carries us into the
21st century. It promises to remove barriers in three crucial
areas, three areas untouched in previous rounds: services,
investment, and intellectual property. But if we fail to achieve
an agreement, we will forfeit new markets for our businesses,
lower prices for our consumers, and more jobs and higher incomes
for our workers. III
Worst of all, we will squander a vital, proven framework of
international cooperation. The collapse of the Round will lead
inevitably to increased protections and political instability.
That is something we can ill afford at a time when we are trying
to forge a new partnership of nations, and when we are engaged in
a great struggle against aggression in the Persian Gulf. III
Therefore, I urge those of you who are finance ministers to
work actively within your governments to ensure success. And I
9
urge my counterparts around the world -- as I did at the Houston
Economic Summit -- to instruct your negotiators to bring the
Uruguay Round to a successful conclusion by December. III
In all these efforts, there is much at stake. Almost 35
years ago, when President Eisenhower first appeared at an
IMF/World Bank meeting, he spoke about one of the lessons he
learned during wartime. He recalled working with soldiers -- men
and women who had to develop real cooperation among themselves
-- or there could be no success.
Ike noted, as I do now, that there were people in the
audience who were our allies in that grand effort. He said:
"We early found one thing: Without the heart, without the
enthusiasm for the cause in which we were working, no cooperation
was possible. With that enthusiasm -- subordinating all else to
the advancement of the cause -- cooperation was easy.' III
As the unity of the United Nations has demonstrated in the
past two months, the worldwide enthusiasm for today's noble
"cause" -- the cause I've described as a "new partnership of
nations" -- is not only unprecedented, but truly astounding. And
I urge you to utilize that enthusiasm in your meetings this week,
to forge the kind of new levels of cooperation needed to succeed.
Thank you for coming to Washington. Good luck this week in
the meetings ahead. And Godspeed you in your travels home.
#
#
#
Welcome Address by President Bush
to 1990 IMF/World Bank Annual Meeting
Introduction/General Theme
Fast-paced events around the world, particularly in the last
year, have introduced a new world order.
There is a clear economic dimension to this fundamental change in
the way the world operates.
The Rise of the Market
New national leaders are turning to market forces as means of
meeting the needs of their people.
Economic reforms to facilitate growth are driving
national policy.
Goal is to improve efficiency and rationalize economic
decision-making.
Building stronger, more versatile private sectors an
important part of this trend.
This upheaval of centralized economic planning happening throughout
the world.
Eastern Europe.
Soviet Union.
Developing countries.
Recent events in the Gulf are making economic transformations
more difficult.
Countries faced with increased hardships on top of
already painful adjustment over the last few years.
Dealing with these new problems and helping countries
push ahead on economic reforms will pose a serious
challenge.
Must not allow tragic events in Gulf to waylay progress
in increasing the role of the market.
Role of the U.S. in New World Order
The U.S. has a major role to play in the evolving international
economic situation.
We have taken a leadership role in the Gulf not only in
terms of defense but also regarding economic responses.
2
Our greatest contribution will be to get our own house in order.
Bringing budget deficit under control.
Protecting growth.
We are also pledged to providing long-term support for developing
countries as they seek to reform their economies and reach out
for growth.
Have supported evolving international debt strategy.
Major new initiative to respond to the needs of our
neighbors in Latin America and the Caribbean.
Multilateralism
While national leadership is vital, the nature of the changing
world calls increasingly for coordinated and cooperative responses.
Particularly in the economic and financial sphere, we
depend on a multilateral approach which allows nations
to leverage scarce resources and assure consistent
response.
The international community looks to the IMF and World Bank to
provide a focus for such multilateral coordination.
These institutions have evolved into powerful forces for promoting
free markets.
They have played a fundamental role as we have responded
to the needs of Eastern Europe. They have provided
vital support to Poland and Hungary, and we now welcome
Czechoslovakia and Bulgaria into their ranks.
Welcome their role in preparing a detailed study of the
Soviet economy, pursuant to Houston Summit, to make
recommendations for reform and establishing criteria
under which Western assistance could support reforms.
They have also been critical in the economic
transformation sweeping Latin America and other parts
of the developing world -- through support for economic
reforms, role in debt strategy.
We need to build further on the ability of the institutions to
respond to changing circumstances.
They must be in a strong position to continue support for
economic reforms and adjustment efforts with view
toward viability.
ISA UUD
3
Strongly support IMF quota increase and strengthening
of arrears policy as critical steps to maintain the
IMF's role.
Important to focus on building dynamic private sectors
in developing economies. Institutions should strengthen
efforts to promote private sector development and to
facilitate private investment.
In addition, we look to the World BAnk to attend to issues which
are increasingly recognized as vital to sound and sustainable
growth.
Protecting the environment is a major concern for all
of us. Urge the World Bank to take prompt and effective
action in this area, particularly to help halt the
destruction of tropical forests.
Poverty alleviation is a central mission for the World
Bank.
The U.S. supports greater efforts to integrate women
into the development process.
IFC
and
the
United
States
INVESTING IN DEVELOPMENT
IFC
International
Finance
Corporation
Where IFC and U.S. firms have invested
D.
Countries where U.S.
Dominican Republic
Jordan
Seychelles
firms have invested with
Ecuador
Kenya
Sri-Lanka
Egypt, Arab Republic of
Korea, Republic of
Swaziland
IFC:
El Salvador
Liberia
Thailand
Argentina
Ethiopia
Malaysia
Togo
Bangladesh
Fiji
Mexico
Trinidad and Tobago
Barbados
Gabon
Morocco
Turkey
Brazil
Ghana
Nepal
Uruguay
Cameroon
Greece
Nigeria
Venezuela
Chile
Grenada
Pakistan
Yemen Arab Republic
China
Guinea-Bissau
Panama
Yugoslavia
Colombia
Honduras
Paraguay
Zaire
Congo, People's Republic
Hungary
Peru
Zambia
of the
India
Philippines
Zimbabwe
Costa Rica
Indonesia
Rwanda
Côte d' Ivoire
Jamaica
The colors, boundaries, denominations and classifications in this brochure do not imply on the part of IFC any judgment on the legal or other status of any territory, or any endorsement or acceptance of any boundary.
IFC and the United States
IFC has worked with some
Some U.S institutions that
First National Bank of
OPIC
200 U.S. private companies,
have been involved in IFC
Maryland
Pfizer Inc.
financial institutions and official
Goldman, Sachs & Co.
Phillips Petroleum Company
agencies to establish more than
projects:
Henley Group, Inc.
Pillsbury Co.
220 ventures in over 50 devel-
American Express
Himont Inc.
Pittsburgh National Bank
oping countries. The U.S.
American Security Bank
Hormel International
Riggs National Bank of
organizations have provided
Amoco Chemical Co.
Corporation
Washington, D.C.
nearly- $2 billion to help finance
Bank of America
Intercontinental Hotels
Santa Fe Energy Company
these ventures-ventures that
Bankers Trust Co.
Corporation
Schwinn Bicycle Co.
have generated over $1 billion
Cabot Corp.
Irving Trust Company
Scientific Design Company
in sales of U.S. goods and
J.I. Case Company
Kellogg Co.
Scott Paper Company
services.
Chase Manhattan Bank
Manufacturers Hanover Trust Co.
Security Pacific National Bank
U.S. financial institutions
Chemical Bank
Maxus Energy Corp.
Shearson Lehman Hutton Inc.
and banks have made loans at
Citicorp
Mellon Bank
Trend International Limited
both fixed and variable rates,
Continental Illinois National
Merrill Lynch
United California Bank
invested equity and participated
Bank and Trust Company of
Morgan Guaranty Trust
USAID
in syndications. Other U.S.
Chicago
Company of New York
Valmont Industries
companies, in addition to com-
Export-Import Bank of the
Morgan Stanley Group Inc.
Westinghouse Electric
mitting funds, have provided
United States
Northern Michigan
Corporation
engineering and other technical
Fidelity Bank
Exploration Company
assistance to projects, extended.
First National Bank of Chicago
suppliers' credits and partici-
pated in procurement contracts.
What are the advantages of
Sectors in which IFC and
Industry
Services
working with IFC?
U.S. institutions have
Basic metals
Business services
- IFC has over 30 years' expe-
invested:
Bicycles
Hotels
rience in structuring projects
in developing countries.
Agriculture and agribusiness
Chemical products
Wholesale and retail trade
Clothing
- IFC is knowledgeable about
Beans
Communications
business conditions through-
Beverages
Fertilizers
out the developing world.
Cotton
Fiberglass
IFC is not limited to these
- IFC's staff have expertise in
Fisheries
Glass
sectors. It can support most
solving difficult engineering
Livestock production
Machinery and equipment
types of viable enterprises that
and financial problems
Palm oil
Non-metallic mineral products
contribute to the economic
- As a neutral international
Shrimp farming
Paper and paper products
development of a country.
partner, IFC can facilitate
Sugar
Petroleum refineries
In addition; IFC increasingly
joint ventures.
Tanneries
Printing and publishing
provides technical and financial
- IFC.is able to make equity
Financial institutions
Rubber and plastic products
assistance to firms that are faced
investments in high-risk
environments.
Brokerage companies
Shoes
with severe financial or other
Development finance
Steel
problems and must restructure
- IFC can mobilize project
companies
Textiles
their businesses.
financing from other inves-
tors and lenders.
Export finance companies
Transport and storage
Investment and merchant
Wood and wood products
-
Start-up businesses benefit
banks
Natural resources
from the long-term maturi-
ties on IFC's loans.
Leasing companies
Coal mining
Securities firms
- IFC enjoys local shareholder
Crude petroleum
status in some developing
Venture capital companies
Metal ore mining
countries, facilitating
Natural gas production
investment.
What IFC Is
technical expertise and interna-
ment often assists in financing
tors find local partners in a
The International Finance
tional experience.
projects by enhancing the con-
developing country and negoti-
Corporation (IFC) is the
Since it began operations in
fidénce of other potential
ate with the host government.
world's largest multilateral
1956, IFC has been associated
lenders and shareholders. In
It is IFC's role as a catalyst in
organization that provides
with more than 2,000 compa-
many projects, the sponsors,
the chemistry of entrepreneur-
financial assistance in the form
nies and financial institutions in
their banks and the host gov-
ship, investment capital and
of loans and equity investments
supporting over 1,000 busi-
ernment look to the long-term
private sector growth in devel-
to the private sector of develop-
nesses in more than 90 coun-
presence of IFC to help main-
oping countries that makes IFC
ing countries.
tries. The total capital cost of
tain stability of relationships
different from other public or
IFC's fundamental purpose
these projects amounts to more
and to internationalize the
private sector institutions.
is to promote the economic
than $50 billion.
character of the project.
IFC is affiliated with the
development of its developing
IFC makes its investment
On the basis of long experi-
World Bank, but operates as a
member countries through sup-
decisions on the basis of a thor-
ence and close relations with
separate, legally independent
port of the private sector. It
ough technical, financial and
individuals and governments in
organization with its own staff
makes investment in the devel-
economic appraisal of the pro-
developing countries, IFC can
and funding. Its share capital is
oping world profitable by pro-
posed project. The IFC invest-
help prospective foreign inves-
held by 134 member countries.
viding financial resources,
You can learn more about
IFC or initiate discussion
about a specific project by
contacting:
IFC Headquarters
1818 H Street, N.W.
Washington, D.C. 20433
Telephone: (202) 477-1234
Telex: ITT 440098
RCA 248423
WU 64145
Cable: CORINTFIN
Fax: (202) 477-6391
IFC IN EASTERN EUROPE
International Finance Corporation
Washington, DC
September 1990
IFC IN EASTERN EUROPE
INTRODUCTION
The historic changes in Eastern Europe have created new opportunities for the International
Finance Corporation to fulfill its unique role as a multilateral investor in the private sector of developing
countries.
IFC is already involved in joint ventures in Poland and Hungary and is assisting these countries
in their economic reform programs. Czechoslovakia and Bulgaria will soon be members of IFC, and
Romania has initiated steps to join. IFC recently established field missions in Vienna and Warsaw to
handle the increased workload from Eastern Europe.
IFC promotes the new private sector in Eastern Europe through:
Long-term loans for projects
Joint ventures--providing equity investment, technology, and access to foreign mar-
kets
Development of local capital markets and financial institutions
Financial and technical services to business
Advice to governments on investment incentives and privatization programs.
For companies looking at new opportunities in Eastern Europe, IFC can be a uniquely attractive
partner.
1
When appropriate, IFC supports joint ven-
WHAT IS IFC?
tures between private enterprises and government
entities. In any project, local investors should be able
to participate, either at the outset or later. IFC will
The International Finance Corporation
only invest in a venture when appropriate arrange-
(IFC) is the world's largest source of direct project
ments exist for the repatriation of its investment
financing for private investment in developing coun-
capital and related earnings.
tries.
IFC can offer most types of financial in-
IFC's purpose is to promote the economic
struments, including senior loans, subordinated and
development of its developing member countries by
convertible loans, income notes, preferred or com-
supporting the private sector. Of the 135 member
mon equity, in whatever combination is necessary
countries of IFC, over 110 are developing nations.
and feasible to ensure that a project is soundly funded
Since it began operations in 1956, IFC has
from the outset.
been associated with more than 2,000 companies and
financial institutions in supporting over 1,000 busi-
Investment Limits and Project Size
ness ventures in more than 90 countries. The total
capital cost of these projects amounts to more than
The loan and equity investments IFC can
$50 billion.
make in Eastern Europe for its own account are
In recent years, IFC has approved annu-
usually limited to no more than 25 percent of project
ally some 90-100 projects in 40 countries, with total
cost.
project costs exceeding $9 billion a year.
IFC typically invests in ventures costing
IFC is affiliated with the World Bank, but
at least $10 million. The largest amount that IFC will
operates with a separate staff and funding. It supple-
invest for its own account is around $100 million.
ments the activities of the Bank by providing to
When needed, IFC can also raise substantial funds in
private business equity and loans without govern-
addition to the investment it makes for its own
ment guarantees in whatever form and combination
account.
are best suited to a project.
Equity Investments
IFC will make investments only if suffi-
cient capital cannot be obtained on reasonable terms
IFC can invest up to 35 percent of the
from other sources. IFC often serves as the catalyst
share capital for a venture. Once an investment has
for a project by encouraging other sources of fi-
matured, IFC typically seeks to divest by selling its
nance-from inside and outside the host country-to
equity to local private sector investors. In some
provide loans or equity along with the local spon-
countries, IFC shareholdings are treated as domestic
sors.
or neutral capital for nationality ownership purposes.
IFC plays a special role: it offers its expe-
IFC does not itself assume management
rience and standing as an international institution to
responsibilities in companies; it expects its invest-
help investors find practical solutions to difficult
ment partners to provide management. IFC has not
investment problems.
generally been represented on the boards of directors
of companies, but it will do SO when there is a need
or when its stake is substantial.
WHAT IFC DOES
As a rule IFC prefers to make both an
equity investment and a loan, but when appropriate
IFC will provide just a loan or just equity.
IFC can invest in all types of projects in
Loans
Eastern Europe, both large and small. It invests in
ventures in heavy industry that supply essential
While IFC normally offers either fixed-
materials and equipment for other domestic enter-
rate loans denominated in U.S. dollars or other major
prises and also earn foreign exchange through ex-
currencies, or variable rate loans in U.S. dollars,
ports.
other arrangements can be made according to the
It also invests in light industries to help
needs of a project. IFC does not provide subsidized
meet domestic or regional consumer and industrial
finance; interest rates and fees are determined on a
demand.
commercial basis.
IFC only finances ventures that have
The terms and grace periods of IFC's
realistic prospects of being profitable and that will
loans are designed to accommodate the cash flow
benefit the economy of the host country.
needs of each venture. Their overall term usually
runs from seven to twelve years. IFC has the flexi-
2
bility to structure loan repayments to match the needs
lized in this way by IFC now exceed $500 million a
of projects involving relatively long construction
year.
periods and slow build-up of capacity utilization.
Other types of financial mobilization by
IFC include underwritings, partial guarantees and
Mobilizing Other Funds
backstop arrangements for both public offerings and
private placements of securities issued by companies
IFC has developed a special participation
in developing countries.
mechanism to facilitate the syndication of its project
loans among commercial banks. IFC signs a single
Advice and Technical Assistance
loan agreement with the borrower, but the loan has
two portions--one for account of IFC and the other
Based on its long experience of develop-
funded by participant banks. The terms of the two
ment through the private sector, IFC provides gov-
portions may differ as regards periods, currencies
ernments and companies with an unusual range of
and interest rates. Each syndicate member has a
advisory services.
separate participation agreement with IFC, which
IFC has its own in-house technical, legal,
acts as lender of record and administrator of the
and financial staff, who come from some 80 coun-
whole loan throughout its life.
tries. IFC can also draw on the World Bank's wide
This mechanism enables IFC in practice
experience, as well as on its own working relation-
to pass on to participant banks the same benefits and
ships with financial institutions and development
advantages that it derives from its status as a multi-
agencies.
lateral institution. Commercial bank funds mobi-
IFC ACTIVITY IN POLAND
Economic reforms favoring the private sector were already under way when Poland joined IFC in
December 1987. Much more was needed to transform the Polish economy into a true market-based system. The
Polish Government asked IFC to helpattract Western investors to larger industries, to support cooperatives, and
to advise on financial sector development.
Projects
Less than a year after Poland became a member, IFC approved the first World Bank Group investment
in Poland: a DM29 million loan to Hortex, an agricultural cooperative owned by 300,000 private farmers. IFC
financed an expansion and modernization program, and is currently helping Hortex develop a new strategy for
future growth.
IFC's second Polish project was a DM50 million credit/quasi-equity facility to the Export Development
Bank for onlending to small private exporting companies. The facility is the first of its kind in Poland. IFC is
also helping the bank improve its internal systems and procedures.
In May 1990, IFC's Board approved its third investment, a US$9 million loan to reconstruct and
renovate Warsaw's Bristol Hotel. The US$35 million project is a partnership between Trusthouse Forte (THF)
and Orbis, the state-owned Polish tourist agency. IFC played the lead role in structuring the financial plan and
acted as a general advisor to the Polish authorities and THF during negotiations.
Other Polish joint ventures currently being considered by IFC include a new commercial bank and
several large industrial projects with foreign partners.
Privatization
IFC is assisting the Polish Government on various aspects of privatization. IFC advised the Government
on appropriate legal and institutional frameworks, the process for selecting candidates for privatization, and the
choice of privatization techniques. IFC is now involved in advisory work on specific privatization possibilities.
IFC also negotiated a substantial European Community grant to fund the agency responsible for
managing the privatization process.
Other Assistance
The National Bank of Poland requested IFC technical assistance to set up a framework for foreign
banks' entrance to the country.
IFC is also providing assistance to the Government on the development of capital markets.
3
IFC frequently provides technical assis-
reduce government involvement in business
tance in the course of appraising and monitoring the
decisions, improve access of FDI to foreign
individual projects in which it invests. This may in-
exchange, revise procedures for resolution
volve advice on accounting, financial management,
of disputes, and expand legal coverage to
equipment selection, marketing, administration, and
regulate the-treatment of FDI in privatiza-
other aspects.
tions.
Through its Corporate Finance Service
Department IFC also provides advice, on a fee basis,
Revising tax regulations to provide more ef-
independently of project financing. The main areas
fective incentives.
covered are corporate restructuring, privatizations,
debt reduction strategies, and business plan evalu-
Restructuring and strengthening the Foreign
ation.
Investment Agency, and improving its abil-
Specifically on privatizations, IFC has
ity to promote Poland as a site for FDI.
provided general advice to the governments of its
Eastern European member countries. It also helps
Hungary
private companies in evaluating investment oppor-
tunities arising from privatization programs world-
Restructuring and re-targeting tax incen-
wide.
tives.
Foreign Investment Advisory Service (FIAS)
Identifying which public enterprises should
be allowed to proceed on their own with
Through FIAS, operated jointly with its
"spontaneous" privatization, and which
fellow World Bank affiliate MIGA, IFC also assists
should be more closely controlled; improv-
governments of Eastern Europe in creating the
ing the regulations governing spontaneous
framework of policies and institutions necessary to
privatization; and assuring a competitive
attract and regulate foreign direct investment (FDI).
and open process for involving foreign in-
FIAS has studied and made recommendations on a
vestors in the privatization of the most im-
number of issues:
portant enterprises.
Poland
Overhauling the screening process for FDI.
Changing the foreign investment law to
IFC ACTIVITY IN HUNGARY
In 1985, Hungary became the first COMECON country to join IFC. Hungary sought IFC's assistance
in setting up joint ventures and developing the country's financial sector.
Projects
IFC has to date helped structure and finance seven ventures, all currently operational or under
construction.
IFC's financial commitment to these projects--involving manufacturing, capital markets, and financial
institutions-- totals about US$70 million, including US$22 million in equity. IFC has been an active partner,
finding foreign investors (from Germany, Austria, Japan, Italy and Sweden), structuring the finance, drafting
and negotiating documentation, and participating in discussions between foreign and domestic investors and
lenders and the Government.
Privatization
IFC also gave informal advice to the Hungarian Government on drafting privatization legislation. The
legislation, which was enacted in March 1990, established a National Property Agency to be responsible for
privatizations.
Financial Sector
IFC has been helping to develop Hungary's financial sector through its involvements in Unicbank and
the First Hungary Fund. It has also provided advice and technical assistance to the Government on setting up
a stock exchange and related institutions.
4
CZECHOSLOVAKIA AND BULGARIA
Both countries will soon be members of IFC, and temporary resident missions have been established in
Prague and Sofia to begin conversations with a wide variety of domestic enterprises and government officials
as to the assistance IFC can provide. In both countries IFC is developing a pipeline of projects for joint venture
possibilities, as well as setting the stage for advice and investment in the financial sector. Privatization activity
will also be a priority area for IFC in these new member countries.
IN SUMMARY
Why Work with IFC?
Companies seek to involve IFC in their investments in Eastern Europe for a number of reasons.
Among these are IFC's:
o
status as a multilateral organization owned in large part by the very countries in which
IFC makes investments, and the political comfort foreign investors derive from the close
contact IFC maintains with host governments;
willingness to make equity investments in high-risk environments, and work
with a project's sponsors through the project's life cycle;
o
ability to offer long-term loans for projects with long gestation periods, including
mobilization of resources from other financial partners;
experience in structuring projects and financing companies in developing countries;
ability to bring together and deploy the necessary human resources--including in-house
technical, financial, economic, legal, and capital mobilization skills;
o
honest broker role, as a neutral international partner, in facilitating joint ventures and
assisting with lengthy business negotiations and complex legal arrangements;
o
detailed knowledge of business conditions in Eastern Europe.
5
IFC Headquarters
Mr. Douglas Gustafson
Department of Investments, Europe
1818 H Street, N.W.
Washington, D.C. 20433, U.S.A.
Telephone: (202) 473-0571
Telex: FTCC 82987
Cable: CORINTFIN
Fax: (202) 477-6391
London
Tokyo
Mr. Christopher Bam
Mr. Sugio Hatanaka
New Zealand House, 15th Floor
Kokusai Building, Room 913
Haymarket
1-1 Marunouchi 3-chome
London SW1Y 4TE, England
Chiyoda-ku, Tokyo 100, Japan
Telephone: (071) 930-8741
Telephone: (03) 201-2310
Telex: 919462
Telex: 26838
Cable: CORINTFIN
Cable: INTBAFRAD
Fax: (071) 321-0589
Fax: (03) 211-2216
Paris
Vienna
Mr. Giovanni Vacchelli
Mr. Theo Zirkel
66 Avenue d'Iéna
Boesendorferstrasse 2/II
75116 Paris, France
1010 Vienna, Austria
Telephone: (01) 4069.3060
Telephone: (222) 505-7306
Telex: 136433
(222) 505-2853
Cable: CORINTFIN
Telex: 620628
Fax: (01 4720.7771
Fax: (222) 505-1226
Warsaw
Mr. Anthony Doran
(temporary address)
Marriott Hotel Warsaw
Aleje Jerozolemskie 65/79
Warsaw, Poland
Telephone: temp.-hotel: (48-22) 306-306
permanent no: (48-22) 300-267)
Telex: (EDB) 817119
Fax: temp.-hotel: (48-22) 30-00-41
IFC
International Finance Corporation
Annual Report 1990
RGN -1
Kirk, Mark S.
I 9149
AIMS AND OBJECTIVES
The International Finance Corporation (IFC) is a
multilateral development institution. An affiliate of the
World Bank, IFC was established in 1956 to further
economic growth in its developing member countries
by promoting productive private investment. Its equity
capital is provided by its 135 member countries-both
developed and developing-which, through the Board
of Directors, collectively determine its policies and
activities.
IFC brings together the financing, technical assis-
tance, and management needed to make good use of
investment opportunities in the developing world. It
provides long-term loans and risk capital, without gov-
ernment guarantees, to private enterprises that have dif-
ficulty raising funds from other sources on reasonable
terms. The types of financial assistance provided by
IFC are adapted to the specific requirements of its
client companies. IFC mobilizes additional project
finance from other investors and lenders. In all of its
activities, IFC seeks to ensure fair conditions for pri-
vate-sector investors and employs its status as a multi-
lateral institution to facilitate the process by which local
and foreign investors, lenders, borrowers, and relevant
government agencies arrive at mutually satisfactory
agreements.
IFC also encourages the flow of foreign and
domestic private capital to developing countries
through the establishment or expansion of capital
markets and financial institutions. It offers technical
assistance to member governments in support of their
efforts to create an environment hospitable to private
investment.
HIGHLIGHTS OF THE YEAR
1990
1989
New investments approved*
122
92
Total investments (gross)
$ 2.2 billion
$
1.7 billion
Net investments for IFC's account
$ 1.5 billion
$
1.3 billion
Total project costs
$ 9.4 billion
$
9.7 billion
Net commitments for IFC's account
$ 1.0 billion
$
1.2 billion
Net disbursements for IFC's account
$ 1.0 billion
$ 870 million
Net income
$ 157 million
$ 196.5 million
Paid-in capital
$ 1.1 billion
$ 948 million
Accumulated earnings
$ 792 million
$ 635 million
Borrowings for the year
$ 799 million
$
845 million
Total disbursed loan and equity
portfolio for IFC's account
$ 3.6 billion
$
2.8 billion
* Totals include 12 Africa Enterprise Fund projects
in FY90 and two Africa Enterprise Fund projects
in FY89.
page
11
Investment approvals reached a record level.
15
IFC's net income was the second highest in its history.
4
IFC prepared for a major new program of activity in Eastern Europe.
37
IFC syndicated a record volume of loan participations with
commercial banks.
6
A formal environmental review of projects was established.
17
IFC made its largest borrowing to date, a $300 million Eurobond
issue.
38
IFC launched a new instrument, the Multi-Country Loan Facility,
for financing small and medium-size enterprises.
Acronyms
AEF
Africa Enterprise Fund
ADB
African Development Bank
AMSCo
African Management Services Company
APDF
Africa Project Development Facility
ASEAN
Association of Southeast Asian Nations
CPDF
Caribbean Project Development Facility
DEG
German Finance Company for Investments in Developing Countries
EC
The European Community
EMDB
Emerging Markets Data Base
FIAS
Foreign Investment Advisory Service
GATT
General Agreement on Tariffs and Trade
IDB
Inter-American Development Bank
IBRD
International Bank for Reconstruction and Development
IDA
International Development Association
IFC
International Finance Corporation
IMF
International Monetary Fund
MIGA
Multilateral Investment Guarantee Agency
OECD
Organisation for Economic Co-operation and Development
SPPF
South Pacific Project Facility
UNDP
United Nations Development Programme
USAID
United States Agency for International Development
Abbreviations
BOT
build-operate-transfer
FY
fiscal year
GDP
gross domestic product
GNP
gross national product
LIBOR
London interbank offered rate
Notes and Definitions
1. IFC's fiscal year runs from July 1 to June 30. Thus, fiscal year 1990 (FY90) began on July 1, 1989
and ended on June 30, 1990.
2. The World Bank includes both IBRD and IDA. The World Bank Group includes the World
Bank, IFC, and MIGA. In this report, IFC is sometimes referred to as the Corporation.
3. Investment amounts are generally given in U.S. dollars, regardless of the original currency or cur-
rencies of the investment, based on the exchange rate in effect on June 30, 1990.
4. Figures cited in connection with investments may refer to the following:
(a) Approvals
Loans, equity and quasi-equity investments, guarantees,
standby facilities, and underwritings approved during FY90.
(b) Commitments
Loans, equity and quasi-equity investments,
and underwritings for which agreements were
signed by IFC and project sponsors during FY90.
(c) Disbursements
Loans, equity and quasi-equity investments,
and underwritings actually disbursed during FY90.
5. Figures cited in this Report may refer to either net or gross investments:
(a) Net investment
Amount lent or invested for IFC's own account. Includes
guarantees and standby facilities, but does not include funds
provided by others or underwritings.
(b) Gross investment Total investment, including IFC's loan, equity and quasi-equity
participation, standby facilities, funds provided by other
investors and lenders, guarantees, and underwritings.
6. In some tables, totals may differ from the sum of individual figures because of rounding.
TABLE OF CONTENTS
International
Letter to the Board of Governors
2
Finance
The Year in Review
3
Corporation
Investment Climate
7
Annual Report
Report on Operations
11
1990
Investment Review
11
The Portfolio
13
Financial Review
15
Regional Reports
19
Africa
19
Asia
22
Europe and the Middle East
26
Latin America and the Caribbean
29
Capital Markets
33
Corporate Finance Services
36
Other Operations
37
Syndications 37
Africa Project Development Facility 40
African Management Services Company
41
Caribbean Project Development Facility
41
Energy Program 42
Foreign Investment Advisory Service
44
South Pacific Project Facility 45
Technical Assistance and Technology Service
45
Personnel Management and Administration
47
Financial Statements
49
Appendices 59
Boxes
An Environmental Case Study
6
Africa Enterprise Fund
21
Multi-Country Loan Facilities
38
Examples of APDF Projects 40
The Meleiha Exploration and Development Venture
43
FIAS Activities in Eastern Europe 44
Technical Assistance Projects 46
IFC
August 7, 1990
TO THE BOARD OF GOVERNORS,
The Board of Directors of the International Finance Corporation has had this
Annual Report for the fiscal year ending June 30, 1990 prepared in accordance with the
By-Laws of the Corporation. Mr. Barber B. Conable, President of the Corporation and
Chairman of the Board of Directors, has submitted this Report, together with the
accompanying audited financial statements, to the Board of Governors.
The Directors are pleased to report that in fiscal year 1990 IFC continued to expand
its investment and advisory activities in its developing member countries while further
strengthening its financial position.
The Board wishes to thank the staff of IFC for their contribution to another
successful year for the Corporation.
Board of Directors
Directors
Alternates
Ibrahim A. Al-Assaf
Abdulaziz Al-Sehail
Fawzi Hamad Al-Sultan
Mohamed W. Hosny
Paul Arlman
Cvitan Dujmovic
Mourad Benachenhou
Salem Mohamed Omeish
J.S. Baijal
M. Mustafizur Rahman
Gerhard Boehmer
Bernd Esdar
Cesare Caranza
Fernando S. Carneiro
E. Patrick Coady
Mark T. Cox, IV
Jacques de Groote
Bahar Sahin
J.S.A. Funna
Jabez A. Langley
Jonas H. Haralz
Jorunn Maehlum
Jean-Pierre Landau
Stephane Pallez
Chang-Yuel Lim
Robert G. Carling
Andre Milongo
Jean-Pierre Le Bouder
Raymundo Morales
Felix Alberto Camarasa
David Peretz
Robert Graham-Harrison
Jorge Pinto
Silvia Charpentier
Frank Potter
Clarence Ellis
Masaki Shiratori
Yukio Yoshimura
Vibul Aunsnunta
Le Van Chau
Eduardo Wiesner
Pedro Sampaio Malan
Zhang Junyi
Jin Liqun
THE YEAR IN REVIEW
PORTFOLIO
T
he year ending on June 30, 1990 was one
of continued overall expansion of IFC's
US$ millions
Total
Held for Others
activities. The Corporation's impact on the
development of many of its member coun-
6,000
tries was increased. In all three principal areas of activ-
ity-financing projects, mobilizing funds from other
sources, and providing advisory services-record vol-
5,000
umes were achieved. At the same time, a number of
new initiatives were launched, and the Corporation's
4,000
financial standing was further enhanced.
The Board of Directors approved new investments
by the Corporation for its own account totaling
3,000
$1.5 billion-16 percent more than in FY89-in 122
private sector projects in 38 countries. Disbursements
2,000
for IFC's own account in FY90 totaled $1.0 billion, an
increase of 15 percent, and the Corporation's disbursed
and outstanding portfolio grew to $3.6 billion by the
1,000
end of the fiscal year. The number of companies in
which IFC held loan or equity investments increased
0
from 468 to 495.
1986
1987
1988
1989
1990
By its participation, IFC helps to mobilize funding
from other sources for sound private sector projects,
and this catalytic effect is an important aspect of IFC's
developmental role. In FY90 the overall costs of the
projects financed by IFC totaled nearly $9.4 billion,
about the same as in FY89. Thus for every dollar in-
vested by IFC, an average of $5.2 was supplied by other
The Corporation's net income for FY90 was high-
lenders and investors. This was below the mobilization
er than expected at $157 million, although below the
rate achieved in FY89 but above the average for the
exceptional figure achieved the previous year. The
five-year period 1985-89, which was $4.5. Funds
portfolio remained healthy. Interest, dividend, and fee
raised directly by IFC for projects through syndicated
income were all at record levels, but, as expected, real-
bank loans, underwritings, and private placements
ized capital gains, although substantial at $91 million,
were the highest ever, at $1.0 billion.
were not as high as in FY89. Despite the sales that pro-
IFC also mobilizes funding in the international
duced these gains, the value of unrealized capital gains
capital markets. In FY90 IFC was instrumental in
on the Corporation's equity portfolio at the end of
structuring and launching 11 country funds (including
FY90 is estimated to be higher than at the end of FY89.
one debt-equity conversion fund), as well as one inter-
The return on the Corporation's equity portfolio (net
national equity offering for a private Chilean company.
of reserves) in FY90 amounted to 25.9 percent.
These international securities offerings raised over
With additional payments of capital and retained
$1 billion in equity capital for investment in companies
earnings during the year, IFC's net worth increased to
in developing countries, with little or no investment of
$1.9 billion at June 30, 1990, compared with $1.6 bil-
IFC's own money.
lion at the end of FY89. The Corporation's financial
The volume and variety of advisory services to
ratios remained strong. Total borrowings over the year
both public and private sector clients grew in FY90.
were $799 million, slightly lower than in FY89, but in
These services, an increasingly important part of IFC's
FY90 a higher proportion of borrowings (81 percent)
development work in recent years, were provided prin-
were from the international markets. Borrowings from
cipally in the areas of privatization, corporate restruc-
the World Bank were used mainly to fund fixed-rate
turing, and capital markets development. At year end,
assets.
IFC was working on over 50 advisory assignments in
In May 1990 IFC tapped the Eurobond market for
30 countries. Service fee income reached $17 million.
its largest single borrowing to date, a $300 million five-
3
IFC has made two investments in Scott Paper Company of Costa Rica, S.A.,
the leading tissue paper manufacturer in Central America.
year issue led by Deutsche Bank Capital Markets Ltd.
The general expansion of IFC's activities partly
The success of this issue furthered the Corporation's
reflects a world trend towards market-based policies
objective of becoming a regular, high-quality borrower
and encouragement of the private sector. A number
in the public bond markets, supported by the triple-A
of developing countries now undertaking adjustment
ratings achieved for its long-term debt issues in
programs are looking to the private sector and private
June 1989.
investment to provide the main impetus of economic
During the year the Board of Governors approved
growth, and some are engaged in privatization
additional allocations of 37,570 shares to France, India,
programs.
Italy, Japan, and the Republic of Korea. As a result,
During FY90 Eastern Europe emerged as an
Japan will become the second largest shareholder in
important area requiring increasing emphasis in IFC
IFC after the United States, with the Federal Republic
activities in support of the reforms being undertaken
of Germany in third place, France and the United
there. IFC is well equipped to give advice on the prac-
Kingdom in equal fourth place, and Canada, India, and
tical problems of transition to market-based economic
Italy in equal sixth place.
systems. In Hungary and Poland, IFC is now providing
Two countries became new members of IFC
advice on a variety of subjects to government agencies
during FY90. Angola joined in September 1989
involved in the process of economic and financial
and Cape Verde in May 1990, bringing the
reform, and is engaged in a program of investments,
Corporation's total membership to 135 countries.
mainly joint ventures, in these countries.
Czechoslovakia, Namibia, Romania, and Switzerland
Within IFC, a new Department of Investments,
4
applied for membership.
Europe, has been created to concentrate on Eastern and
Southern Europe. The Corporation also looks forward
Net investment approvals in Asia were up 81%,
to collaborating with the new European Bank for
buoyed by a continued positive environment for
Reconstruction and Development in assisting private
private investment. IFC's FY90 program included
sector development in Eastern Europe.
major industrial investments in East Asia, and invest-
A new department was also created to focus greater
ments in the power sector in South Asia. Following on
attention on the Middle East and North Africa, an area
the success of the Africa and Caribbean Project Devel-
where IFC's investment activity has not grown strongly
opment Facilities, IFC is establishing a similar facility
in recent years.
for the South Pacific.
Net investment approvals in Africa rose 50 percent
The share of new investments going to Latin
in FY90 to a record level. Sizeable investments in
America and the Caribbean, which had been over 50
natural resource-based projects were approved, partic-
percent for some years, was lower in FY90, but the
ularly in countries where the investment climate has
Corporation's role in this region remains very signifi-
benefited from private sector-oriented economic re-
cant. Investments were approved in a number of large
forms. The Corporation continued its efforts to assist
projects in Brazil, Chile, Mexico, and Venezuela, and
small and medium-size businesses in sub-Saharan
the Corporation was able to mobilize finance for some
Africa. Twelve investments in such businesses were
of them from international sources, partly through the
made through the Africa Enterprise Fund (AEF). With
sale of participations in IFC's loans, thus bringing
staff in place, this program is expected to expand con-
commercial banks back into the business of financing
siderably. Demand for the services of the Africa Project
development in Latin America. IFC also provided
Development Facility (APDF) continued strong; dur-
advisory and financial services, including the Corpora-
ing the year the Board approved an IFC contribution
tion's first currency swap intermediations, which were
to a renewal and expansion of APDF.
transacted for two Latin American banks.
THE PAST TEN YEARS
(US$ millions)
Fiscal Years
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
OPERATIONS
Investments Held
Number of firms
314
333
341
349
366
377
409
454
468
495
Loans
1,374
1,551
1,588
1,644
1,748
2,001
2,347
2,848
3,472
4,068
Equity
273
284
294
346
368
386
409
526
573
684
Total
1,647
1,835
1,882
1,990
2,116
2,387
2,756
3,374
4,045
4,752
Disbursements
IFC's own account
292
246
228
238
266
325
328
762
870
1,001
Participants
295
284
146
143
84
140
166
110
207
125
Total
587
530
374
381
350
465
493
872
1,077
1,126
Commitments
IFC's own account
347
300
218
355
354
513
742
1,098
1,207
1,027
Participants
390
80
115
415
127
168
255
63
314
337
Total
737
380
333
770
481
681
997
1,161
1,521
1,574
Approvals
Number of projects
56
65
58
62
75
85
92
95
92¹
122²
Gross investments
811
612
845
696
937
1,156
920
1,270
1,710
2,201
Total project costs
3,340
2,936
2,894
2,473
2,768
3,588
4,343
5,010
9,698
9,377
RESOURCES AND INCOME
Capitalization
Borrowings
509
531
536
583
825
1,223
1,581
2,047
2,255
3,580
Paid-in capital
392
497
544
544
546
602
722
850
948
1,072
Accumulated earnings
159
181
204
230
258
284
338
438
635
792
Earnings
Net income
19.5
21.6
23.0
26.3
28.3
25.4
53.8
100.6
196.5
157.0
1. Includes two Africa Enterprise Fund projects.
2. Includes 12 Africa Enterprise Fund projects.
5
IFC stepped up its efforts to assist small and
medium-size companies during FY90. The Corpora-
An Environmental Case Study
tion approved 10 credit lines to financial intermediaries
During the year, IFC completed its environmental re-
for onlending to projects too small for direct IFC assis-
view of a project approved in FY89 to reopen a gold
tance, one equity line, and two loan agency lines where
mine, closed since 1955, at the Bogosu concession in
the intermediaries will identify, appraise, and invest in
Ghana. Gold ore will be mined by open pit, at a rate of
small and medium-size enterprises alongside IFC.
900,000 tons annually, and treated on-site.
These projects represent 14 percent of gross approval
IFC's review was based on visits to the project site by
volume. A new instrument for mobilizing foreign-
its own staff and an environmental assessment prepared
exchange lending from commercial banks, the Multi-
by the sponsor, Canadian Bogosu Resources Limited
(CBRL), in accordance with Ghanaian law. A number of
Country Loan Facility (MLF), was also launched.
environmental and social issues arose in connection with
Three MLFs were approved in FY90. Under these
this project:
MLFs, IFC and commercial banks will provide match-
recovery of arsenic trioxide from the gases emitted
ing amounts of finance to small and medium-size
during the roasting of the ore;
projects in a number of developing countries.
sulfur dioxide emissions from the roaster;
The evolution of IFC's advisory role was reflected
handling and treatment of tailings;
in the conversion of the Corporate Finance Services
reclamation of mine pits and tailings disposal areas;
Group, established last year, into a full department of
impact on local water resources;
the Corporation in January 1990, in response to rapidly
resettlement of approximately 200 families; and
growing demand for advisory services related to priva-
worker health and safety procedures.
tizations and corporate restructurings. The Capital
Given the special sensitivities of the project, IFC's staff
worked closely with the sponsor, CBRL, and CBRL's
Markets Department expanded its activities vigorously,
consultants during the preparation of the environmental
with the number of projects worldwide rising from 20
assessment. IFC reviewed draft studies and assessment
to 33. The International Securities Group, set up with-
documentation covering all the issues identified. As a
in the Capital Markets Department to help borrowers
result of IFC's review and dialogue with the sponsor, the
in developing countries tap the international securities
final assessment contained a detailed environmental man-
markets, became fully staffed and operational, and now
agement plan for monitoring and mitigating measures.
has a good pipeline of projects.
CBRL will monitor liquid effluents, stack emissions, and
Increased attention was given to the protection of
ambient air quality and has also agreed to install addition-
the environment during FY90. IFC's environmental
al pollution-control equipment if results are not in line
review procedures were formalized. To qualify for IFC
with World Bank guidelines. In addition, the monitoring
finance, projects must comply with the host countries'
plan covers land-use changes, vegetation, and surface and
groundwater quality. Annual monitoring reports will be
environmental requirements and the World Bank's
provided to IFC to ensure continuing compliance with
guidelines. IFC's environmental adviser reviewed ap-
World Bank guidelines.
proximately 100 project proposals during FY90. After
CBRL assigned an environmental officer to the
projects are implemented, IFC will supervise them to
project full-time. One of his first tasks has been to
ensure continuing compliance. The Corporation is also
develop a worker health and safety plan, which will be
undertaking a study of the possibility of promoting and
reviewed by IFC. CBRL is also currently preparing
financing private sector production of environmental
detailed plans for the safe handling, storage, and market-
goods and services in developing countries.
ing of the recovered arsenic trioxide.
During FY90 IFC opened a new regional mission
in Pakistan (Islamabad). New missions in Brazil (Sao
Paulo), Cameroon (Douala), and Zimbabwe (Harare)
expansion of their economies. The pace at which IFC
were opened early in FY91.
investments can expand is, however, governed in part
Demand for IFC's finance and services continues
by its capital. At the close of the fiscal year, discussions
strong and seems likely to increase during the 1990s as
were under way among IFC's shareholders about a pos-
more countries look to the private sector to lead the
sible capital increase.
6
INVESTMENT CLIMATE
declined. Sub-Saharan Africa enjoyed some recovery of
growth, up from 2.8 percent in 1988 to 3.2 percent in
1989, but the rate of growth barely kept pace with the
Business Environment
increase in population.
Slower growth in the industrialized countries had
some effect on the economic performance of the devel-
In 1989 the industrialized countries enjoyed their
oping countries, but the main cause of slow growth in
seventh consecutive year of expansion. They grew by
3.4 percent, down from 4.5 percent in 1988. In con-
the latter is their continuing struggle against inflation.
trast to earlier years, the growth paths of these countries
Stabilization efforts have curbed the growth of domestic
demand in countries as diverse as China, India, and
have begun to diverge. Growth of the U.S. economy
slowed from 4.4 percent in 1988 to 3.0 percent in
Turkey. In other countries-for example Argentina
1989, while growth accelerated in France and the
and Poland-accelerating inflation undermined
Federal Republic of Germany. Japan's economy also
growth during 1989.
began to grow very rapidly after mid-year.
The near-term outlook for the developing coun-
Expansion continued to be fueled largely by in-
tries is mixed. In Asia, growth prospects are particularly
vestment. Business investment accelerated in France,
good in Indonesia, Malaysia, and Thailand; these coun-
Germany, and Italy, and remained at high levels in
tries have created very favorable environments for pri-
Japan; however, it slowed in the United States, where
vate business, reflected in unprecedented increases in
profit margins were squeezed by rising costs. The over-
foreign direct investment. Elsewhere in Asia, particu-
all strength of investment in the industrialized countries
larly in China and India, stabilization efforts and financ-
is one of the main causes of continued growth in the
ing constraints will limit growth.
volume of world trade, which estimates put at 6.8 per-
While modest improvement in growth is projected
cent in 1989 (after 9 percent growth in 1988). How-
in sub-Saharan Africa as a whole, as structural adjust-
ever, the slowdown in the U.S. economy led to a drop
ment efforts begin to bear fruit, low levels of private
in exports of manufactured goods from developing
investment and scarcity of foreign exchange will con-
countries to the U.S. market and promises keener
tinue to limit severely what can be achieved in the
competition for these exports in the near future.
majority of countries.
The prices of many commodities began to weaken
In Latin America, Mexico's vigorous stabilization
during 1989, reflecting slower economic growth and
and adjustment efforts are beginning to be reflected in
increased supply. Prices for tin, nickel, and aluminum
increased private investment. The Chilean economy
fell particularly sharply. So did prices of some key in-
grew by 10 percent last year, one of the world's top per-
dustrial products such as methanol, propylene, and eth-
formances, and should continue to grow at satisfactory
ylene. Coffee and cocoa prices continued to slide. On
rates. Elsewhere in the region, the prospects are less
the other hand, producers of grain and sugar did well,
encouraging; governments continue to grapple with
and steel and cement prices held firm. Petroleum prices
inflation and the process of structural adjustment is only
were up from 1988 levels.
beginning.
Capital inflows to developing countries were lower
The dramatic transformations in Eastern Europe
than financial outflows, resulting in another year of net
may have an impact on developing countries in other
negative resource transfer. Real interest rates began to
regions. A number of companies in developing coun-
rise towards the end of 1989 and continued at this
tries are concerned about losing market shares to firms
higher level until mid-1990. These higher rates in-
in Czechoslovakia, Hungary, and Poland as foreign in-
creased the burden of debt service on debtor countries.
vestment in Eastern Europe increases, and as the East-
The growth rate in 1989 for the developing coun-
ern European countries restructure their economies,
tries as a group was the lowest since 1983-3.5 percent,
increase exports, and benefit from trade preferences
down from 5.5 percent in 1988. Most of the slowdown
they may secure from the EC. However, consumer
occurred in Asia, principally in China, India, and the
demand in Eastern Europe is likely to lead to increased
Republic of Korea, where the growth rate fell but re-
imports of manufactures as soon as foreign exchange
mained high by international standards. The ASEAN
availability permits. This growth in demand will
countries continued to show robust growth. In Latin
benefit competitive suppliers from other developing
America, growth remained steady, but was very low at
regions.
1.5 percent, resulting in a decline in per capita GDP.
In sum, growth in developing countries was weak
Growth rates in Eastern Europe and the Middle East
last year and is not likely to improve very much, in part
7
finance investment. All too often, term finance is not
available, forcing companies to rely on short-term bor-
rowings. Governments' demands for resources and the
battle against inflation are leading to levels of real inter-
est rates at which very few investment projects can be
viable. In Argentina and Brazil, governments' actions
to solve their domestic debt problems, however neces-
sary to fight inflation, have further hampered the
growth of capital markets. Stabilization policies that re-
strict the growth of domestic demand also limit the
growth of local markets for businesses. In the case of
non-tradeables or products that cannot be exported
profitably, such policies have resulted in severe difficul-
ties for many firms. Producers of tradeable goods have
been able to shift their sales from the domestic to the
international markets, but this is not always an easy
transition.
The Importance of Trade for Businesses
in Developing Countries
In the 1980s international trade became vitally
important for businesses in developing countries. The
world market for manufactured goods has been grow-
ing rapidly: during the 1980s exports of manufactured
goods from the developing countries to the three major
OECD markets, the EC, Japan, and the United States,
increased from about $80 billion to nearly $250 billion.
Although a small number of countries have a substan-
tial share of this trade, a large number of other devel-
oping countries have recorded dramatic increases in
their exports. Businesses in the Dominican Republic,
In FY90 IFC approved a second loan to the Tata Electric Companies,
which supply electricity to the city and suburbs of Bombay.
Indonesia, Pakistan, and Turkey, among others, have
successfully developed export markets in the industri-
alized countries. Indonesian firms, for example, have
been increasing their exports to the industrialized
countries by about 30 percent per year, and exports
reflecting stabilization and structural adjustment efforts.
from industrial firms in Malaysia grew by about 15 per-
Moreover, growth has begun to soften in the United
cent per year during the 1980s. Hungary's manufac-
States.
tured exports to Japan have risen from virtually none in
1980 to well over $100 million, and Morocco's manu-
factured exports to the EC have increased at a very
Implications for Businesses in Developing
rapid rate.
Countries
The range of products has also become increasing-
ly diversified. A small number of traditional products,
This slowdown has had important implications for
particularly textiles, clothing, and footwear, remain
the business climate in developing countries. The con-
extremely important and are still exported in large
tinued struggle with stabilization and the persistence of
quantities, even from relatively advanced developing
public sector deficits are hampering capital market
countries. Yet products virtually unknown among ex-
8
development and making it hard for businesses to
ports from the developing world just ten years ago-for
example, data-processing equipment and accessories;
The stiff wind of international competition is be-
office machinery; sound recording and playback equip-
ginning to be felt widely throughout the developing
ment; cars, vans, and motorcycles; and heating and
world. An excellent example is the Latin American au-
cooling equipment-are becoming major trade items.
tomobile industry, long the beneficiary of substantial
To a large extent, this increased trade flow reflects
protection. Mexico began liberalizing its trade regime
the increasingly competitive nature of the world econ-
several years ago, with a view to building an industry
omy. In the 1980s, businesses in the industrialized
capable of exporting. It is now emerging as a key sup-
countries attempted to reduce production costs by in-
plier of both automobiles and components to the U.S.
troducing innovations such as just-in-time production
market, and is also exporting engines to Japan. The
methods and developing a great variety of out-sourcing
country's producers are now meeting world quality and
arrangements with firms in developing countries.
delivery standards. Brazil recently decided to liberalize
Companies in industrial countries have been rational-
its import regime, a change that will put pressure on
izing the location of their production facilities, often for
both component and car manufacturers. Nor is this an
export of foreign subsidiaries' output to the home
isolated example; more and more developing countries
country or to third countries. As a result, not only is
and more and more industries are opening up to the
trade in finished goods increasing, but trade in parts,
world market. Producers find they can no longer rely
components, and subassemblies is also growing dramat-
on the domestic market to absorb goods of inferior
ically, driven in part by foreign direct investment in
quality; standards are set in the world market.
developing countries. With rising domestic costs, firms
Assembly/processing operations in duty-free zones
from the newly industrialized countries in East Asia are
represent an increasingly important type of export
also adding to the growth of trade through offshore
industry that has attracted many international investors
locations.
(including IFC). There are concerns as to whether
Above all else, it was the rapid growth in U.S.
these export-processing zones (EPZs) generate value-
demand for imported goods in the 1980s that allowed
added for the domestic economy. However, they have
exports from developing countries to grow rapidly.
demonstrated ability to create employment and export
Between 1980 and 1988, U.S. imports of manufac-
earnings.
tured goods from the developing world climbed from
$35 billion to $122 billion, whereas EC imports went
from $40 billion to $86 billion, and Japanese imports
The Outlook for Investment
from $8 billion to $30 billion. Not only was the U.S.
market large and expanding rapidly, it was also com-
Although economic conditions in the developing
paratively easy to penetrate, thanks to a relatively open
countries will remain difficult in the near future, the
trade regime, internal competitiveness, and the major
prospect of slow average growth need not imply weak
role played by a small number of retailers who were
demand for private investment during 1990-91.
anxious to reduce their costs by sourcing overseas. U.S.
First, the private sector is uniquely qualified to deal
growth is slowing, however, dampening demand for
with certain changes in the world economy, in partic-
exports of manufactured goods from the developing
ular, the internationalization of production and trade,
countries. U.S. imports of manufactures from develop-
the rapid rise in trade in services, and the acceleration
ing countries grew by 7 percent in 1989, less than half
of technological change. The need to remain compet-
of the average rate for the 1980s as a whole. Although
itive in markets means investment will continue in
they are expected to rebound in 1990 and 1991, the
three areas: for export, for modernization, and to meet
growth rate is projected at 9 percent, still well below
ever higher quality standards. Competition among
the increases of the past decade.
firms is increasingly over quality, reliability, and deliv-
The combination of slower growth in the United
ery, rather than simply over price. This means develop-
States and continued sluggish growth in the domestic
ing countries can no longer attract investment simply
markets of many developing countries is going to make
on the basis of cheap labor. Corporations in developing
world markets more competitive in the near future,
countries are beginning to pay more attention to ensur-
despite the likelihood of increased imports into the
ing market access for their exports through close links
Japanese and European markets. A successful conclusion
with partners in developed countries. These links are
to the Uruguay GATT round will bring the disciplines
likely to be formal, such as joint ventures, in areas
of international trade to hitherto protected areas of the
where technological know-how is important, or they
world economy, further increasing competitive pressures.
may simply be close associations in industries such as
9
textiles where market access and the ability to respond
ing countries, the preserves of governments and state-
quickly to changing consumer demands are more im-
owned enterprises.
portant. The textile industry provides an interesting ex-
Indeed, recent data on private investment trends
ample of these trends. Increasingly, the latest spinning
show that the balance between private and public sec-
and weaving machines can be found in developing
tors has already begun to shift. In 27 developing coun-
countries because exporting firms need to produce to
tries for which private and public investment data are
world-market standards. Hence good management and
available through 1988, the share of private investment
the availability of labor with the skills to use this ma-
in GDP has increased, from 10.2 percent in 1986 to
chinery are of growing importance, and simple labor
11.8 percent in 1988, while the share of public invest-
cost advantages are decreasing in importance. Foreign
ment dropped from 8.2 to 7.5 percent.
direct investment (FDI) is one way in which these links
It is hard to overstate the size of the investment
to the world market are cemented. In 1989, flows
backlog in developing countries, particularly the highly
of FDI increased to many developing countries,
indebted ones, especially in infrastructure. From elec-
particularly Chile, Indonesia, Thailand, and Turkey,
tric power generation and distribution to water supply
and a large number of smaller countries. Mexico,
and telecommunications to health care and transporta-
Singapore, and Thailand were the top recipients of
tion, there is a growing role for the private sector. This
foreign direct investment in 1989. In some countries,
may take the form of privatization of state-owned as-
FDI represents a large proportion of total private in-
sets, or may be fresh involvement by the private sector
vestment. In Malaysia, for example, FDI was 9 percent
as the regulatory environment changes. Investment
of total private investment in 1988, and in Thailand,
projects in such areas are likely to be large, and the pri-
20 percent.
vate sector will only be willing to undertake them if it
Second, most developing countries face severe fis-
has confidence in the stability of government policy.
cal problems and lack the financial resources needed to
Such confidence is likely also to generate greater pri-
expand (and, in many cases, to keep up) the services
vate sector investment in more traditional productive
provided by the public sector. These investments, par-
areas of the economy. This is what is beginning to hap-
ticularly in infrastructure, are essential to maintain the
pen in a number of countries, notably Chile, where
competitiveness of the private sector. Greater recourse
there is growing private investment in power and tele-
to private enterprise is often the only way to meet rising
communications as well as in the industrial and export
demand. There has also been disappointment in many
sectors.
developing countries with the performance of public
This process is expected to accelerate: there can
enterprises in directly productive activities, as well as
be no doubt that the past year has seen much greater
the realization that, in the right environment, private
emphasis on the role of the private sector in developing
enterprises can be more efficient. As a result, the private
countries. As more and more countries place greater
sector is becoming increasingly involved in sectors as
reliance on the private sector in the years to come,
varied as commercial aviation, telecommunications,
demand for substantial private sector investment will
and power-formerly, in both developed and develop-
grow.
10
REPORT ON OPERATIONS
INVESTMENT APPROVALS
FY86 90
US$ millions
Cumulative
Yearly
INVESTMENT REVIEW
8,000
Project Approvals
6,000
During the fiscal year, 122 projects were approved,
including Africa Enterprise Fund projects, compared
with 92 in FY89. IFC approved investments of
4,000
$1.5 billion for its own account, compared with
$1.3 billion in FY89, and $622 million was approved
for participants in IFC's loans, compared with
2,000
$398 million in FY89.
One of IFC's primary functions is the mobilization
of project finance from other sources. This function has
become even more important during recent years, giv-
0
en the reluctance of commercial banks to increase their
1986
1987
1988
1989
1990
exposure in highly indebted developing countries. IFC
estimates that the total capital costs of the projects it ap-
proved in FY90 will be nearly $9.4 billion. This means
that for every dollar IFC lent, invested, or guaranteed
for its own account, others invested about $5.2 in non-
recourse loans or equity participations. Although the
mobilization rate was lower than in FY89 (when it was
loan volume was in U.S. dollars. The currency mix for
influenced by a few very large projects), it was higher
loans approved in FY90 was as follows (in US$ million
than the average of $4.5 for the period 1985-89.
or equivalent):
Of the total net investments approved in FY90,
$1.2 billion was for loans, and $257 million was for
Percentage
equities and quasi-equity instruments. Corporate re-
of Total
structuring was involved in five of the loans, which
U.S. dollars
$972
80.3
came to $103 million. Quasi-equity instruments in-
Deutsche mark
$101
8.4
cluded subordinated loans, convertible debentures,
Japanese yen
$94
7.8
preferred stock, income notes, and loans with conver-
French francs
$27
2.2
sion features. IFC also approved $13 million in guaran-
Swiss francs
$16
1.3
tees and $26 million in standby arrangements.
In accordance with IFC's policies, its loans were
made at market rates. Maturities, set to conform with
IFC provided its clients with a broad range of
the requirements of each project, were between five
other financial services during FY90, including under-
and 13 years, including grace periods ranging from two
writings in domestic and international markets
to five years. Interest rates ranged from 62 to 294 basis
($73 million), swaps, and debt conversions. It also
points over six-month LIBOR for variable-rate loans,
placed with private institutional investors $328 million
or the swap-based equivalents for fixed-rate loans; IFC
in securities in five IFC-sponsored funds.
also charged standard front-end and commitment fees.
IFC continued to offer loans denominated in all of the
major international currencies at the client's choice.
Where IFC Invested
Most of the loans approved in FY90 were denominated
in U.S. dollars and were available at either fixed or vari-
IFC strives for geographical diversity in its invest-
able rates. Over 66 percent of the loans approved for
ments. Projects approved in FY90 were located in 38
IFC's account carried variable rates; 80 percent of total
countries; one was regional and three global in scope.
11
Of the 92 projects approved in FY89, 90 were located
The dollar value of net approvals increased in all
in 38 countries; one was regional, and one was world-
regions except Latin America and the Caribbean. The
wide in scope.
largest increase, 81 percent over FY89, occurred in
Of total approvals, 37, accounting for $328 mil-
Asia. Next was Africa, which showed a 50 percent in-
lion, were located in low-income countries with per
crease over FY89, followed by Europe and the Middle
capita incomes of $830 or less. These investments rep-
East with a 6 percent increase. The number of invest-
resented 30 percent of the number and 22 percent of
ments declined in Latin America, but increased in all
the net volume approved.
other regions.
FY90 and FY89 Projects by Region
FY90
FY89
Amount¹
Amount¹
No.
(US$ millions)
No.
(US$ millions)
Africa²
34
$362
21
$283
(of which sub-Sahara)
(32)
(265)
(20)
(275)
Asia
35
697
25
321
Europe & Middle East
21
244
15
259
Latin America & Caribbean
29
735
30
842
Worldwide
3³
163
1⁴
5
Total
122
$2,201
92
$1,710
1. Dollar amount refers to total investment approved for IFC's account and for account of other participants.
2. Totals include Africa Enterprise Fund projects.
3. Multi-Country Loan Facilities.
4. Emerging Markets Investment Fund.
Sectoral Breakdown of Project Approvals
tional commercial banks for small and medium-size
projects in developing countries. IFC approved three
IFC approved investments in a broad range of sec-
MLFs in FY90. IFC also helped to launch 11 country
tors during FY90. Projects in capital markets, develop-
funds, approved investments in several leasing compa-
ment finance, and financial services represented 32
nies and merchant banks, and arranged currency swaps
percent of approval volume. Thirteen of these projects
for banks in Bolivia and Mexico.
involved loans and equity investments made through
Projects in petrochemicals and fertilizers represent-
financial intermediaries and facilities. IFC has found
ed 20 percent of investment volume. Agribusiness and
that such investments enable it to reach many more
food processing, cement, energy, pulp and paper, and
small enterprises than it could serve as a direct investor
textiles together accounted for 18 percent of project
and thus enhance its developmental impact. It ap-
approvals. Sizeable investments were approved for
proved a loan to the Export Development Bank in
projects involving oil development and on-and off-
Poland-its second project in that country since Poland
shore petroleum exploration; an oil exploration venture
became a member-for onlending to small, export-
in Guinea-Bissau was IFC's first project ever in that
oriented companies. It approved other credit and
country. Projects in tourism-including the Corpo-
equity lines and loan agency lines in India, Indonesia,
ration's first investment in Belize-and industrial
Mexico, and Zimbabwe. In addition, IFC developed a
services, such as power generation and distribution,
new instrument, the Multi-Country Loan Facility (MLF),
accounted for 21 percent of approval volume. The
12 to mobilize foreign exchange lending from interna-
Corporation also made a loan of $6 million to help
FY90 APPROVALS BY SECTOR
General manufacturing,
Textiles
Timber, pulp, and paper
automotive industry,
7
6
industrial equipment
Mining, nonferrous metals, iron and steel
NUMBER
14
4
Cement and construction materials
Total = 122
Chemicals,
4
Energy
petrochemicals,
4
fertilizers
9
Food and agribusiness
11
Tourism, industrial
services
Capital markets,
22
development finance,
financial services
41
General manufacturing, automotive
Textiles
industry, industrial equipment
$77.84
$132.58
Timber, pulp, and paper
$151.66
Chemicals, petrochemicals,
Mining, nonferrous metals, iron and steel
fertilizers
$74.97
$440.66
Cement and construction materials
$7.30
Energy $109.45
AMOUNT
Food and agribusiness $45.25
(US$ millions)
Total $2,200.64
Capital markets,
development finance, financial services
Tourism, industrial
$701.18
services
$459.75
finance the expansion of a free trade zone in the
committed portfolio can be broken down as follows:
Dominican Republic that will lease factory space to
foreign companies.
(US$ millions)
Mining and metals attracted 3 percent of IFC's
Loans
4,068
investments, with two gold-mining projects in Ghana.
Equity
684
General manufacturing projects, including auto-
Total IFC portfolio
4,752
mobiles and automotive parts and glass products,
Total disbursed
3,589
represented 6 percent of investment volume.
Total undisbursed
1,163
THE PORTFOLIO
The total committed portfolio increased 17 percent
over FY89. The $707 million increase consists of
$596 million in committed loans and $111 million in
Commitments
committed equities. At the close of FY89, the portfolio
held investments in 464 companies in 79 countries and
At the close of the fiscal year, IFC held in its
in six companies that were regional or worldwide in
committed portfolio $4,752 million of loan and equity
scope, for a total commitment of $4.1 billion.
investments in 495 companies. Of this total, 484 com-
During FY90 IFC invested in 67 new companies,
panies are located in 79 countries; six are regional (two
and through repayments, sales, and write-offs closed
in Africa, three in Asia, and one in Latin America), and
out 46 investments. New commitments for IFC's
five are worldwide in scope. The total value of IFC's
own account totaled $1.0 billion, compared with
13
$1.2 billion in FY89. About 34 percent of IFC's new
Loan portfolio income rose 22 percent, from $244 mil-
commitments were in Latin America, 25 percent were
lion in FY89 to $297 million in FY90. Both interest
in Asia, 18 percent were in Africa, and 16 percent were
and financial fee income were higher than in FY89,
in Europe and the Middle East. The remaining 7 percent
reflecting an increase in the size of the disbursed
were worldwide in scope. The sectors with the biggest
loan portfolio and significant recoveries from non-
share of new commitments were capital markets, devel-
performing loans. Loans that acquired non-performing
opment finance, and financial services (34 percent); tour-
status were offset by loans that became performing.
ism and industrial services (15 percent); manufacturing,
Equity income decreased from the exceptional lev-
the automotive industry, and industrial equipment (14
els of $149 million in FY89, to $121 million in FY90,
percent); and timber, pulp, and paper (13 percent).
but FY90 levels were still the second highest in IFC's
In addition to its own investments, IFC administers
history. Despite the high rate of capital gains realized by
investments for participants. In FY90 IFC committed
the Corporation during FY90 ($91 million), unrealized
$337 million for the account of participants, compared
capital gains in IFC's committed equity portfolio at the
with $314 million in FY89.
close of the fiscal year are estimated to be higher than
a year ago.
Disbursements
Portfolio Management
IFC's disbursements increased 15 percent, from
$870 million in FY89 to $1.0 billion in FY90, of which
The performance of IFC's portfolio has been favor-
$839.6 million was for loans and $161.8 million for
ably influenced by the current strength of the world
equity investments. The disbursed loan portfolio grew
economy. Nonetheless, IFC has continued to improve
by 30 percent to $3 billion, while the disbursed equity
the management and supervision of its portfolio. A
portfolio increased by 21 percent to $570 million. IFC
computerized data base and information system cover-
also disbursed $125 million for participants in its loans,
ing the equity and loan portfolio is in place to facilitate
compared with $207 million in FY89.
monitoring of the investments. This system has
strengthened IFC's ability to monitor equity holdings
Portfolio Income
and to take advantage of appropriate selling opportuni-
ties when it has completed its developmental role in
Total income from IFC's portfolio rose slightly,
projects. In addition, the restructuring and workout of
from $394 million in FY89 to $419 million in FY90.
troubled investments have enhanced portfolio quality.
IFC's Special Operations
Unit, through its expert
COMMITTED PORTFOLIO BY SECTOR
and intensive efforts, has
effectively resolved, either
(US$ millions)
by sale or restructuring,
Total $4,752
several previously non-
Mining, non-ferrous
Timber, pulp
metals, iron, steel
and paper
performing assets.
$524
Cement and
$365
Textiles
construction materials
$340
$215
Energy
$279
General
Food and
manufacturing,
agribusiness
automotive industry,
$260
industrial equipment
$714
Tourism, industrial
services
$429
Chemicals, petrochemicals,
fertilizers
$597
Capital markets, development
finance, financial services
$1,029
14
FINANCIAL REVIEW
NET INCOME
US$ millions
200
Highlights
IFC had another year of highly satisfactory finan-
cial performance. Income from loans showed steady
150
growth, and recent improvements in the quality of the
loan portfolio were sustained. Once again, dividends
and capital gains from the sale of mature equity invest-
ments made an important contribution to IFC's
100
financial results. However, the level of capital gains
inevitably varies from year to year and, as expected, the
record level realized in FY89 was not repeated. As a
50
result, net income in FY90 was below that of FY89,
but was nonetheless well ahead of the objective set by
IFC's management at the commencement of the fiscal
year and the second highest in IFC's history.
0
The Corporation continued to place emphasis on
1986
1987
1988
1989
1990
providing a range of fee-generating services to respond
to the needs of its clients and to diversify its sources of
income. More resources are being devoted to develop-
ing these services.
The volume of new investments continued to
grow, although at a slower pace than in recent years.
Investment approvals and disbursements were higher in
gains realized from equity sales were $90.7 million, the
FY90 than in FY89.
second highest in the Corporation's history, surpassed
The Corporation received triple-A ratings for its
only by capital gains of $118.6 million realized in
debt securities from the two main U.S. rating agencies
FY89.
at the end of FY89 and now offers its securities in the
Dividends of $30.7 million received during FY90
public bond markets. In May 1990, IFC launched a
were close to the record level of $30.8 million achieved
$300 million Eurobond issue, the largest borrowing in
in FY89. Dividends were received from 101 compa-
its history.
nies in 40 countries, compared with 107 companies in
38 countries last year.
Loan income, which remains easily the largest
Net Income
single contributor to IFC's income, was $297 million in
FY90. Loan income was higher than in FY89, reflect-
Net income for FY90 was $157 million. This was
ing both the growth and the high quality of the dis-
below the record level of $196.5 million achieved in
bursed loan portfolio. Improvements achieved in the
FY89, when IFC realized an exceptional level of capital
collection rate of interest payments and in the non-
gains on mature equity investments. Nonetheless, the
performing loan portfolio were sustained during the
Corporation's income performance was strong and was
year.
well balanced among the loan and equity portfolios and
Fees received from advisory services totaled
IFC's advisory activities.
$16.8 million in FY90. This compares with $25.3 mil-
During the fiscal year, in accordance with its poli-
lion received in FY89, which included an exceptional
cies regarding equity investments, the Corporation
$13.6 million fee recognized on a single advisory
revolved its equity portfolio in companies where its role
assignment. The Corporation is actively expanding its
had been completed, freeing up resources for new
capacity to deliver advisory services in connection with
investments. Thirty-three mature equity investments
privatizations, restructurings, and transactions in the in-
were sold. The sales included 18 investments in poorly
ternational capital markets.
performing companies, reflecting concentrated efforts
Income from the liquid asset portfolio was
to revolve underemployed capital. Overall, capital
$142.2 million in FY90, compared with $101.5 million
15
in FY89. The liquid asset portfolio includes the pro-
ceeds of borrowings pending disbursement on IFC's
Sources of Gross Income FY90 and FY89
loans, as well as capital, accumulated earnings, and
(US$ millions)
reserves. The increase in income from liquid assets
FY90
FY89
reflects, in part, a higher average level of liquidity, and,
Interest and financial fees
297.1
244.4
more particularly, improved returns from invested
Dividends and profit participations
30.7
30.8
liquid assets, which in FY90 were 8.81 percent, com-
Realized gains on equity sales
90.7
118.6
pared with 7.85 percent in FY89. These higher returns
Service fees
16.8
25.3
can, to some extent, also be attributed to a revised in-
From deposits and securities
142.2
101.5
vestment strategy implemented during FY90 whereby
Other (losses) income
7.4
(2.1)
the component of the liquid portfolio deriving from
584.9
518.5
variable-rate borrowings awaiting disbursement is in-
vested with a view to minimizing carrying costs-a
carrying gain of 51 basis points was achieved in FY90-
while the remainder is invested through the strategic
reserve and is maintained at a level approved by IFC's
setting of average durations for each individual currency.
Board after taking into account the historical loss expe-
Gross income increased to $584.9 million in FY90,
rience, the concentration of the portfolio, and other
up from $518.5 million last year. Administrative ex-
aspects of potential risk to that portion of the portfolio
penses increased to $105.9 million, from $76.8 million
not covered by the Specific Loss Reserve. These are
in FY89, including a one-time charge of $7.6 million
risks that, by their nature, cannot be readily determined
to comply with a new accounting policy for non-
from a review of individual portfolio investments. At
pension retirement benefits.
the end of FY90, total loss reserves were $319.3 mil-
The provision for losses in FY90 was $90.5 million,
lion, representing 8.9 percent of the total disbursed
compared with $59.6 million in FY89. The increase to
portfolio of $3.6 billion, compared with 9.2 percent at
the Specific Loss Reserve (before write-offs), which
the end of FY89. The Specific Loss Reserve amounted
covers identifiable losses on specific investments with a
to $159.3 million and the General Loss Reserve to
significant and relatively permanent decline in value,
$160 million.
was $23.8 million. $70 million was added to the
General Loss Reserve, which supplements the specific
Capital and Accumulated Earnings
RECEIPTS: FISCAL YEAR 1990
During FY90, IFC received $124.4 million in
capital payments from member countries. Of this
US$ millions
amount, $90.1 million represented payments under the
1,200
December 1985 capital increase, $33.5 million repre-
sented payments for additional shares requested and
purchased by France, India, Japan, and Korea, and $.8
million represented subscriptions from IFC's new
900
members, Angola and Cape Verde.
At June 30, 1990, paid-in capital amounted to
$1.1 billion, and retained earnings to $792 million. The
600
Corporation's net worth was $1.9 billion, up from
$1.6 billion at the end of FY89. In addition, $86 million
has been subscribed but not paid. Final payment is due
by August 1991.
300
The debt-to-equity ratio, which measures out-
standing borrowings and guarantees against subscribed
capital and accumulated earnings, was 1.88:1 at the end
of the fiscal year, compared with 1.34:1 at the end of
0
FY89.
Repayments
Borrowings
Income from
and sales
loan/equity
16
PAYMENTS: FISCAL YEAR 1990
to offer its securities in the public bond markets. A key
objective of IFC's borrowing program in FY90 was to
US$ millions
establish IFC as one of the highly rated supranationals
1,200
issuing in the public Euromarkets. IFC's most impor-
tant public issue in FY90, and its largest borrowing
to date, was a $300 million Eurobond issue. It was
launched in May 1990 by an underwriting group lead-
900
managed by Deutsche Bank Capital Markets Ltd. The
co-lead managers were Credit Suisse First Boston Ltd.,
J.P. Morgan Securities Ltd., Morgan Stanley Interna-
600
tional Ltd., and Norinchukin International. Other
market borrowings in FY90 included two issues for a
total of Ptas 20 billion (the equivalent of $180.7 mil-
lion), and two reverse dual currency Samurai issues in
300
Japan for ¥25 billion (the equivalent of $169.8 million).
In the coming fiscal year, IFC intends to gain access
to a wider range of public markets, limiting borrowings
from the World Bank to not more than 20 percent of
0
total funding. IFC will pursue a dual strategy with
Repayments
Administrative
Financial
Disbursements
respect to borrowings, establishing liquid, well-traded
on borrowings
expenses
charges
issues in the public markets, and achieving low-cost
funding in the arbitrage markets.
Funding Management
IFC's total funding program for FY90 came to
$799 million, compared with $845 million in FY89.
IFC borrowed $650 million, 81 percent of its funding
needs, in the international markets, up from $595 mil-
lion in FY89. The remaining $149 million was bor-
rowed from the World Bank, with which IFC has a
Master Loan Agreement. IFC's borrowings from the
Bank were used mostly to fund fixed-rate assets de-
nominated in various currencies, including Deutsche
Mark, Japanese yen, and French francs.
All of IFC's market borrowings were swapped into
variable-rate U.S. dollars, the kind of financing most
often sought by its clients. The sub-LIBOR cost
achieved through these swaps contributed significantly
to the lowering of IFC's overall funding costs. At the
end of FY89, after receiving triple-A ratings for its debt
securities from the two U.S. rating agencies, IFC began
17
Underwriters of IFC Market Borrowings in FY90
Lead and Co-Lead Managers
Banco Español de Crédito, S.A.
J.P. Morgan Securities Ltd.
Banco Exterior de España, S.A.
Morgan Stanley International
Bankers Trust Sociedad de Valores, S.A.
The Nikko Securities Co. Ltd.
Citibank España, S.A.
The Nomura Securities Co. Ltd.
Credit Suisse First Boston Ltd.
Norinchukin International Ltd.
Daiwa Securities Co. Ltd.
Tokyo Sociedad de Valores (España) S.A.
Deutsche Bank Capital Markets Ltd.
Yamaichi Securities Co. Ltd.
Co-Managers
B.N.P. España, S.A.
Kidder, Peabody International Ltd.
Banco Bilbao Vizcaya, S.A.
Kokusai Securities Co. Ltd.
Banco Comercial Transatlántico
Mapfre Indosuez, Sociedad de Valores, S.A.
Banco de Crédito Industrial S.A.
Marusan Securities Co. Ltd.
Banco Exterior de España
Merrill Lynch Japan Inc.
Banco Hispano Americano, S.A.
Midland Bank, PLC
Banco Santander de Negocios
New Japan Securities Co. Ltd.
Bankers Trust Servicios Financieros, S.A.
The Nippon Kangyo Kakumaru Securities Co. Ltd.
Banque Bruxelles Lambert, España
Nomura International
Banque Nationale de Paris, España
Okasan Securities Co. Ltd.
Banque Paribas, España
Paribas Capital Markets Group
Caisse Nationale de Crédit Agricole, España
Salomon Brothers Asia Ltd. (Tokyo)
Citibank España, S.A.
Salomon Brothers International Ltd.
Commerzbank AG, España
Sanyo Securities Co. Ltd.
Cosmo Securities Co. Ltd.
Shearson Lehman Hutton International
Crédit Commercial de France
Swiss Bank Corporation Investment Banking
Crédit Lyonnais
Taiheiyo Securities Co. Ltd.
Credit Suisse First Boston Ltd.
Tokyo Securities Co. Ltd.
CS First Boston (Japan) Ltd.
Tokyo Sociedad de Valores (España) S.A.
Dai-Ichi Securities Co. Ltd.
Toyo Securities Co. Ltd.
Dresdner Bank AG, España
UBS Phillips & Drew Securities Ltd.
Generale Bank-Banco Belga, España
Universal Securities Co. Ltd.
Goldman Sachs International Ltd.
Wako Securities Co. Ltd.
Goldman Sachs (Japan) Corp.
S.G. Warburg Securities
IBJ International Ltd.
S.G. Warburg Securities (Japan) Inc.
J.P. Morgan Sociedad de Valores y Bolsa, S.A.
Yamatane Securities Co. Ltd.
18
REGIONAL REPORTS
On the other hand, there are major obstacles to
private investment in some countries. These include
negative factors like high inflation, restrictive govern-
AFRICA
ment policies, arrears in foreign payments, and political
instability.
Investment Overview
Regional Initiatives
Economic conditions and prospects for private
investment vary considerably throughout Africa. There
IFC has launched several initiatives over the past
was a general resumption of economic growth in sub-
few years in response to concerns specific to the region.
Saharan Africa in 1989, compared with 1987-88,
The Africa Project Development Facility (APDF), a
following increases in some commodity prices and in
UNDP project of which IFC is the executing agency,
export volumes. Improved weather conditions and the
was created in 1986 to help African entrepreneurs pre-
positive response of local producers to adjustment
pare bankable projects; in FY90, its donors decided to
efforts also contributed to this recovery. However, a
extend its mandate through 1995 (see p. 40). The
number of large economies are still performing poorly.
Africa Enterprise Fund (AEF) was founded in FY89 to
Although the investment climate in Africa remains
finance small and medium-size projects in sub-Saharan
difficult, it is improving significantly in countries that
Africa (see p. 21). A third initiative, the African Manage-
are liberalizing the domestic economy by reforming
ment Services Company (AMSCo), which provides
the regulatory frameworks for trade and private invest-
management training and temporary managers to
ment. Many countries are also seeking to achieve a bet-
African enterprises, was established in FY90 (see p. 41).
ter balance between their public and private sectors. In
Increased provision of IFC finance to small and
the early stages of adjustment, the business community
medium-scale businesses through private-sector com-
must adapt to a more open and competitive environ-
mercial intermediaries was a feature of FY90. This type
ment, less government protection, and depressed de-
of financing activity enables IFC to invest in specific
mand; as a result, private investment may slow down.
sectors-for example, transport and export industries-
In the long term, however, adjustment programs in-
and to utilize the knowledge and project appraisal
crease the scope for private sector activity by creating a
capabilities of local private banking institutions. In a
more favorable environment. The private sector's re-
number of projects, IFC was able to act as a catalyst in
sponse to economic reforms has been strongly positive
mobilizing foreign commercial bank financing, in
in Morocco and Tunisia, and is improving in countries
addition to the finance it provided.
such as Ghana, Madagascar, Nigeria, and Togo-the
IFC is also prepared to provide advisory services
revival of private investment in Ghana's mining sector,
in Africa. In FY90 IFC began discussions with the
for example, is a positive sign.
Moroccan Government regarding IFC's possible
involvement in the design and implementation of a
privatization program.
A $3 million loan to Africamer, S.A., a major fishing and fish processing
company in Senegal, will help to finance the modemization and expansion
Highlights of the Year's Activities
of the company's land facilities.
During fiscal year 1990, total financing of
$362 million was approved for 34 projects in 13
countries in Africa, including Africa Enterprise Fund,
capital markets, and energy projects. Of this amount,
loans accounted for $339 million, and equity and quasi-
equity investments for $18 million. There was also a
guarantee of $5 million. In FY89, a total of $283 mil-
lion in loan, equity, and quasi-equity financing was ap-
proved for 21 projects in the region.
At the close of FY90, IFC's committed portfolio
included investments of $762 million in 133 companies
in 34 countries in Africa-$674 million in loans and
$88 million in equity and quasi-equity. This compares
19
FY90 Project Approvals: Africa
(US$ millions)
Gross
Project
Company
Country
Activity
Investment
Cost
Société Industrielle Laitière du Cameroun
Cameroon
Food and food processing
1.36
4.10
Société des Industries Alimentaires et des
Produits Laitiers de Côte d'Ivoire
Côte d'Ivoire
Food and food processing
2.09
4.90
Pelican Seafood (Gambia) Ltd.
The Gambia
Fisheries
1.65
2.50
Ashanti Goldfields Corporation (Ghana) Limited
Ghana
Mining
70.00
93.00
Ghanaian-Australian Goldfields Limited (Iduapriem)
Ghana
Mining
3.00
13.50
Anetibene Petroleum Exploration Program
Guinea-Bissau
Oil exploration
5.85
39.00
Clearwater Fishing Project (Pescas Bissau)
Guinea-Bissau
Fishing
.20
1.15
Saxon Properties Limited
Mauritius
Tourism
3.59
14.70
Textile Industries Ltd.
Mauritius
Textiles
3.10
7.60
Crédit Immobilier et Hôtelier (CIH)
Morocco
Tourism
92.12
200.00
Société Ennasr de Pêche
Morocco
Fishing
4.83
13.00
Afcott Nigeria Ltd.
Nigeria
Agribusiness
4.50
17.30
Tiger Battery Company (Nigeria) Limited
Nigeria
Dry-cell batteries
1.70
1.70
Togotex
Togo
Textiles
1.61
22.70
Barclays Bank of Zimbabwe Ltd.*
Zimbabwe
Credit line
20.11
20.11
Mashonaland Holdings Ltd.
Zimbabwe
Wire drawing
4.44
6.54
Merchant Bank of Central Africa Ltd.*
Zimbabwe
Credit line
25.21
25.21
RAL Merchant Bank Ltd.
Zimbabwe
Merchant Bank/Credit line
17.85
19.00
RAL Merchant Bank Ltd.
Zimbabwe
Credit line
30.21
30.21
Scotfin Limited*
Zimbabwe
Credit line
7.50
7.50
Standard Chartered Merchant Bank Ltd.*
Zimbabwe
Credit line
30.21
30.21
Syfrets Merchant Bank Ltd. Zimbabwe*
Zimbabwe
Credit line
25.21
25.21
Subtotal
356.34
599.14
Capital Markets approvals (see p. 34)
.11
1.08
AEF approvals (see p. 21)
5.61
19.95
Total
362.06
620.17
*
Project undertaken in cooperation with the Capital Markets Department.
with investments of $624 million in 123 companies in
cial banks for Crédit Immobilier et Hôtelier (CIH),
33 countries at the end of FY89.
Morocco's leading development bank for tourism
In FY90, IFC's investments in Africa were concen-
and housing, to fund private investments in tourism
trated in industries based on natural resources-for
projects during the 1989-90 period. The loan repre-
example, mining, tourism, and fishing. In Ghana, IFC
sents the fourth internationally syndicated loan since
played a major role in structuring, and arranging the
the early 1980s for a Moroccan financial institution-
financing of, a $93 million expansion program for
all the syndicated loans were arranged by IFC.
Ashanti Goldfields Corporation (Ghana) Limited.
The African fishing sector benefited from a num-
The project will increase Ashanti's gold production by
ber of IFC investments. IFC approved a $4.8 million
180,000 ounces yearly. IFC approved a loan of $60 mil-
guarantee that will enable Société Ennasr de Pêche, a
lion to the project, as well as a standby facility of
Moroccan company, to acquire a fleet of four deep-sea
$10 million; it arranged syndications with international
freezer trawlers. In The Gambia, IFC approved a loan
commercial banks for half of each of these. IFC also ap-
of $1.7 million, of which $600,000 will be syndicated
proved an equity investment of up to $3 million for
to commercial banks, for Pelican Seafood, which will
Ghanaian-Australian Goldfields Limited, a gold mining
rehabilitate a fish-processing plant. A quasi-equity in-
venture that will develop reserves on the Iduapriem
vestment of $200,000 was approved in a one-year pilot
gold concession in Ghana.
project to determine the feasibility and scope of a fish-
IFC continued to support Africa's tourism sector
ing venture in Guinea-Bissau.
in FY90. In Mauritius, where tourism is a growth in-
IFC was also active in the textile industry. It was
dustry, IFC approved an investment of $3.6 million in
instrumental in structuring and financing the privatiza-
Saxon Properties Limited to complete a 206-room
tion and rehabilitation of Togo's two largest textile
beach hotel and upgrade the hotel's rating. IFC also
mills. The project is sponsored by Cha Chi Ming Ltd.,
20 arranged a $92 million syndicated loan with commer-
a company based in Hong Kong. The mills are expect-
INVESTMENT APPROVALS
sectors, and a $15 million line was approved for RAL
FY86 90
Merchant Bank for onlending to corporate clients.
A $131 million medium-term, non-revolving credit
US$ millions
line was approved for five commercial and merchant
Cumulative
Yearly
1,200
banks in Zimbabwe. The borrowing banks are Barclays
Bank, Merchant Bank of Central Africa, RAL Merchant
Bank, Standard Chartered Merchant Bank, and Syfrets
900
Merchant Bank. Each bank will borrow $20-$30 mil-
lion to be onlent to local export-oriented companies to
600
finance imports of capital equipment. Of the total in-
vestment, $66 million is for IFC's own account, and the
remainder is being syndicated to commercial banks. The
300
project will provide much-needed foreign exchange to
expand and diversify Zimbabwe's export sector.
0
1986
1987
1988
1989
1990
Africa Enterprise Fund
The Africa Enterprise Fund (AEF), which was established in
FY89, finances projects too small to be processed directly from
IFC headquarters. During a three-year trial period, AEF
ed to produce 20 million yards of African prints annu-
expects to invest $60 million in small and medium-scale ven-
ally. A loan approved for Textile Industries Limited in
tures in IFC's sub-Saharan member countries. Investment pro-
Mauritius will enable the company to consolidate its
posals are developed and appraised by IFC's resident missions in
Abidjan, Lagos, and Nairobi in collaboration with local banks
garment manufacturing operations in one location and
that provide cofinancing. AEF's activities are carried out
to upgrade its equipment.
mostly by locally recruited professional staff under the super-
IFC approved a number of credit lines to private
vision of IFC's resident representatives.
commercial intermediaries during FY90. These credit
Although AEF has been in operation only 15 months, there
has already been broad-based demand for its financing. It has
lines, developed jointly by the regional investment
received over 400 investment proposals from entrepreneurs in
department and Capital Markets Department, are de-
34 member countries. By the end of FY90, AEF had approved
signed to foster the private banking industry in Africa
14 investments located in eight countries, for a total of $7 mil-
lion equivalent; over 50 projects were under serious consider-
and provide foreign exchange to medium-size busi-
ation at the end of the fiscal year.
nesses for investment. In Zimbabwe, a $7.5 million line
AEF staffing will be increased in FY91 to handle the grow-
was approved for Scotfin Limited to finance the pur-
ing pipeline of projects and the large number of unsolicited
chase of imported capital goods by small and medium-
proposals received by IFC's resident missions. IFC's new re-
gional missions in Douala, Cameroon and Harare, Zimbabwe,
size companies in the transport and manufacturing
which opened in early FY91, will allow AEF to increase its as-
sistance to businesses in central and southern Africa.
FY90 Project Approvals: Africa Enterprise Fund
(US$ millions)
Gross
Company
Project
Country
Activity
Investment
Cost
Northern Textiles
Botswana
Textiles
.38
1.82
Omnium de Transformations Alimentaires, S.A.
Côte d'Ivoire
Oils and fats
.83
Tribois S.A.
1.80
Côte d'Ivoire
Wood processing
.54
1.30
Alugan Co. Ltd.
Ghana
Aluminum fabrication
.28
.70
Dimples Inn
Ghana
Hotel
.24
Plastic Laminates Ltd.
.60
Ghana
Plastic products
.60
Upper Qeme Holdings (Pty.) Limited
2.50
Lesotho
Concrete blocks
.12
.31
Financière d'investissement ARO (FIARO)
Madagascar
Venture capital company
.40
General Haulage Limited
2.60
Mauritius
Trucking
.14
Intermatch Nigeria Ltd.
.32
Nigeria
Paper products
.96
Mat Tools and Forging (Private) Limited
3.10
Zimbabwe
Retrofit (Private) Limited
Tool and die manufacturing
.75
3.80
Zimbabwe
Electrical contracting
.37
1.10
Total
5.61
19.95
21
ASIA
While a number of governments throughout Asia
have plans to privatize state-owned enterprises, partic-
ularly in infrastructure-for example, energy, power,
Investment Overview
roads, and transport-actual progress has been slow.
There has been some divestment of the non-
In 1989 the developing economies in Asia per-
performing assets of government-owned financial insti-
formed better than those in other regions; however,
tutions in the Philippines, and the Government of Pa-
the rate of aggregate growth dropped from the very
kistan is planning several privatizations.
high levels of 1988. This decline, especially evident in
China, India, and the Republic of Korea, reflected a
variety of economic and political factors. Nonetheless,
in general the climate for private investment, both local
Regional Initiatives
and foreign, remained strongly positive.
IFC's initiatives in East Asia during the fiscal year
Growth in East Asia dropped to just under 6 per-
cent in 1989, primarily because of lower growth rates
focused on major sectors such as petrochemicals. IFC
in China and Korea, which had achieved double-digit
played an advisory role in a petrochemical project in
growth rates in 1988. However, economic perfor-
Indonesia, and approved an investment in a petro-
mance remained strong in Indonesia, Malaysia, and
chemical complex in the Philippines. IFC provided
advice to the Government of Thailand in connection
Thailand; it was also surprisingly resilient in the
Philippines, despite political uncertainties in the second
with the development of the country's second petro-
half of the year. Foreign and domestic private invest-
chemical complex and approved an investment in a
ment continued to grow rapidly throughout the
downstream project. Thailand's first petrochemical
region, most notably in projects in export-oriented
complex, which is now being implemented, was devel-
industries. Rapid economic growth also made possible
oped in 1984 with advisory and financial assistance
the implementation of large projects in sectors such as
from IFC.
IFC facilitated the relocation of industrial facilities
petrochemicals. These projects are expected to under-
pin future industrial growth in East Asia. Because of
from Korea to countries such as Indonesia and the
rising costs in countries such as Japan and Korea, there
Philippines. IFC's participation in relocation projects
is a growing tendency to move labor-intensive indus-
was the result of continuing promotional work with
tries such as textiles and garments, electronics, basic
Korean companies, some of which had benefited from
engineering goods, and automobile components to
earlier IFC investments to finance local operations.
overseas locations within the region.
In FY90 IFC established the South Pacific Project
A number of factors contributed to a weakening of
Facility (SPPF), which is modeled on similar IFC ini-
economic performance in South Asia: natural disasters,
tiatives in Africa and the Caribbean (p. 45). SPPF will
inflation, rising fiscal and balance of payments deficits,
help entrepreneurs in the small island economies pre-
and growing external debt-servicing requirements.
pare viable projects and raise financing for them.
However, sustained improvements in productivity and
In South Asia, IFC's continued emphasis on the
exports indicate that these economies respond to the
energy sector reflects the increasingly important role
right incentives. This is true of India, where private
assumed by private investors in India's power industry,
companies have fared extremely well in the past two
and private sector interest in oil and gas development
fiscal years; as a result, new security issues in rupees
and power generation in Pakistan. IFC approved
have increased significantly, and the share market has
finance for two private power utilities in India. The
been buoyant. Although private investment slowed
engineering sector in these two countries has also
somewhat in India after the change of government,
attracted IFC investment, and IFC has undertaken pro-
India's recent budget and new foreign trade policy sug-
motional efforts in other industries where these coun-
gest that economic liberalization will be sustained;
tries have natural advantages. In Pakistan, these efforts
the climate for local private investment should remain
have emphasized diversification of the portfolio and
favorable. Pakistan's Government took additional
have resulted in the identification of good investment
measures to open up the economy and began to imple-
potential in general manufacturing.
ment its medium-term structural adjustment and
The Corporation continued to seek additional di-
reform programs with support from the World Bank
rect equity investments in India and Pakistan. It made
and the IMF. The private sector in Pakistan has contin-
large equity investments both in greenfield projects and
22 ued to demonstrate an underlying strength.
in big companies with expanding capital bases, as well
IFC has made a number of investments in manufacturing projects in Pakistan.
as a limited number of small straight equity investments
Highlights of the Year's Activities
in projects involving technology transfers. An equity
line arranged with a financial intermediary in India will
enable IFC to make a greater number of small equity
During fiscal year 1990, total financing of
investments in a cost-effective way.
$697 million was approved for 35 projects in 8 coun-
IFC provided further technical assistance to the
tries in Asia, including capital markets and energy
Governments of Nepal and Pakistan in their priva-
projects. Of this amount, loans accounted for $559 mil-
tization efforts. IFC reached an agreement with the
lion, equity and quasi-equity investments for $109 mil-
Government of Nepal and UNDP on the details of a
lion, and underwritings for $29 million. In FY89, a
UNDP-funded advisory assignment to be carried out
total of $321 million in loan, equity, and quasi-equity
by IFC. IFC will continue to assist in the formulation
financing was approved for 25 projects in the region.
of privatization policy and in institution-building in
At the close of FY90, IFC's committed portfolio
Nepal and will provide direct support in the imple-
included investments of $921 million in 113 companies
mentation of two privatization transactions. IFC ad-
in 12 countries in Asia-$701 million in loans and
vised the Government of Pakistan on the privatization
$220 million in equity and quasi-equity. This compares
of selected state-owned enterprises.
with investments of $729 million in 109 companies in
To support its promotional efforts in Bangladesh
12 countries at the end of FY89.
and Pakistan, IFC opened a new regional mission in
Many countries in East Asia are upgrading their
Islamabad in FY90.
industrial structures by entering into the production
23
FY90 Project Approvals: Asia
(US$ millions)
Gross
Project
Company
Country
Activity
Investment
Cost
Bengal Glass Works Ltd.
Bangladesh
General manufacturing
2.30
6.80
CESC Ltd. (formerly Calcutta Electric
Supply Corp. Ltd.)
India
Electricity distribution
20.10
92.20
Herdillia Oxides and Electronics Ltd.
India
General manufacturing
.32
13.40
Industrial Credit and Investment Corp.
of India Ltd. (ICICI)
India
Equity line
25.00
25.00
Mahindra & Mahindra Ltd.
India
Automobile manufacturing
16.37
212.00
Mahindra Ugine Steel Co. Ltd.
India
Steel/tourism
1.32
26.20
Tata Electric Companies
India
Electricity generation/distribution
60.00
273.70
Tata Keltron Ltd.§
India
General manufacturing
.13
.68
Titan Watches Ltd.§
India
General manufacturing
.17
9.10
Bank Umum Nasional*
Indonesia
Agency credit line
10.00
20.00
P.T. Indo-Rama Synthetics
Indonesia
Textiles
12.00
74.00
P.T. Kayu NIC Indonesia
Indonesia
Wood products
13.10
52.10
Raja-Pendopo Petroleum Exploration Project
Indonesia
Oil exploration
3.60
32.60
Hae Un Dae Development Company Ltd.
Korea
Tourism
.50
15.80
Korea Long Term Credit Bank
Korea
Commercial/merchant banking
15.98
450.00
Twenty First Century Oleochemicals Sdn. Bhd.
Malaysia
Chemicals
8.63
20.00
Pak-Suzuki Motor Company Ltd.
Pakistan
Automobile manufacturing
15.14
92.60
Rupali Polyester Ltd.
Pakistan
Petrochemicals/textiles
24.51
89.00
Avantex Mill Corporation
Philippines
Textiles
13.74
51.00
General Milling Corporation
Philippines
Food and agribusiness
.64
14.20
Luzon Petrochemical Corporation
Philippines
Petrochemicals
105.00
500.00
Makati Shangrila Hotel and Resort Inc.
Philippines
Tourism
59.00
118.00
Northeast Agriculture Company Ltd.§
Thailand
Food and agribusiness
.05
.41
Shin Ho Paper
Thailand
Paper products
57.08
108.00
Siam Asahi Technoglass Company
Thailand
General manufacturing
8.06
313.00
Vinythai Company Ltd.
Thailand
Petrochemicals
150.00
529.00
Subtotal
622.74
3,138.79
Capital Markets approvals (see p. 34)
74.69
442.44
Total
697.43
3,581.23
* Project undertaken in cooperation with the Capital Markets Department.
§ As a rights issue below $250,000, this project is not included in the total number of approvals.
of basic and intermediate petrochemicals. In the
finance a $529 million integrated polyvinyl chloride/
Philippines, where funding for large investments is
vinyl chloride monomer plant near Bangkok. In a
scarce, IFC is helping to arrange financing for private-
project with a Japanese partner involving the transfer
sector projects in infrastructure and basic industries.
of technology to Thailand, IFC approved an equity
IFC approved $105 million in loan and equity financ-
investment in a plant that will manufacture glass TV
ing for the Luzon Petrochemical Corporation to con-
tubes.
struct the Philippines' first integrated petrochemical
In Indonesia, where a number of development
complex. Total project costs are estimated to be
initiatives are constrained for want of equity capital,
$500 million. Also in the Philippines, IFC approved a
IFC is helping privately held companies to broaden
$59 million loan, half of which will be syndicated, for
their investment base by going public and issuing
a major hotel development in Manila. IFC continued
securities. The Corporation also supported the devel-
its advisory work for Philippines Airlines (PAL), pre-
opment of Indonesia's resource-based industries with
paring a detailed action plan for restructuring PAL's
an investment in a medium-density fiberboard plant
balance sheet and privatizing it as a viable entity. PAL
that uses recycled mill waste. Two agency credit lines
decided to implement IFC's recommendations.
were approved for onlending to Indonesian companies.
In Thailand, IFC approved a $50 million loan
In Korea, IFC is working with firms interested in set-
24 and syndicated another $100 million in loans to help
ting up joint ventures elsewhere in the region.
IFC approved its second loan, for $60 million, to
INVESTMENT APPROVALS
the Tata Electric Companies (TEC) in India, which
FY86 90
supply electricity to Bombay and its suburbs. It also
US$ millions
approved a loan of $20 million to CESC Ltd. (formerly
Cumulative
Yearly
the Calcutta Electric Supply Corporation Ltd.), to
2,500
finance the expansion of CESC's transmission and
distribution system. This expansion will enhance the
2,000
quality and reliability of power supply to the Calcutta
area, with more efficient distribution and reduced
1,500
transmission losses.
Also in India, IFC approved a loan of $10 million
1,000
and a quasi-equity investment of $6.4 million in fully
convertible debentures for Mahindra & Mahindra
500
Limited (M&M), a leading manufacturer of utility
vehicles and agricultural tractors. The investments will
0
help finance a program to modernize and rationalize
1986
1987
1988
1989
1990
key manufacturing facilities in M&M's automotive and
tractor divisions and to increase annual production to
31,250 tractors and 56,500 utility vehicles. The pro-
gram will also allow M&M to produce utility vehicles
with modern transmissions and fuel-efficient engines
in response to demand in the increasingly competitive
Indian market.
The Corporation approved an equity line in the
A loan of $22 million and an equity investment of
amount of $25 million, to be implemented with the
$2.6 million were approved for Rupali Polyester Lim-
assistance of the Industrial Credit and Investment Cor-
ited in Pakistan to help finance the expansion of staple
poration of India Limited (ICICI). This line will enable
fiber capacity from 22,750 to 72,750 metric tons per
IFC to make small equity investments in 15-20 small
year with the addition of two staple fiber lines. The
and medium-size industrial enterprises in sub-sectors
synthetic fiber, which will be used by the local spinning
where India has some comparative advantage. ICICI,
industry to manufacture blended yarns of polyester and
a premier development finance institution, will help
cotton, will contribute to the modernization and diver-
IFC to identify, appraise, and administer investments
sification of Pakistan's textile industry.
under the equity line; introduction of new technology
IFC approved a loan of $2.3 million to Bengal
and export potential will be important criteria in the
Glass Works Limited (BGWL), Bangladesh's only
selection of projects. IFC also approved an equity
automated glass producer, to help finance the expan-
investment of $320,000 in Herdillia Oxides and
sion of its glass-making capacity and product range.
Electronics Limited to help establish India's first facility
BGWL will install a manufacturing line to produce
to manufacture magnetic iron oxide, which is used to
20 million light-bulb-shells yearly and increase its flint
coat audio, video, and computer tapes and disks.
container capacity to 4,000 metric tons per year.
25
EUROPE AND THE MIDDLE EAST
Despite a significant drop in growth rates from
1988 levels, the economies of Cyprus and Turkey, with
their increasingly sophisticated private sectors, continue
Investment Overview
to be vigorous and competitive. The close ties these
countries have with the EC-Turkey is an associate
Hungary, Poland, and Yugoslavia are all reforming
member, and Cyprus has a Customs Union with the
their economies to create market-oriented, com-
Community-make them attractive locations for new
petitive enterprise sectors. The restructuring and priva-
enterprises. The tourism sector, in particular, attracted
tization of state-owned enterprises, as well as the elim-
substantial new private investment in 1989. Portugal's
ination of price controls and government subsidies for
membership in the EC has brought it high economic
producers and consumers, are key elements of the
growth and rapidly expanding private-sector
reform process, in which foreign investment and
investment. Cyprus and Portugal continue to enjoy rel-
know-how are expected to play an important role. The
atively low levels of inflation (4 percent and 11 percent,
Governments' new economic policies are creating an
respectively) and manageable levels of external debt.
environment in which enterprises are forced to re-
On the other hand, Turkey is still battling inflation,
spond to market-pricing signals and market incentives
which fell only slightly, from 75 percent in 1988 to 69
and penalties to survive. In the short term, the reforms
percent in 1989, making it difficult for the Turkish pri-
are having a harsh impact on employment and produc-
vate sector to raise long-term domestic financing. Al-
tion. In Poland and Yugoslavia, the control of hyperin-
though Turkey continues to have some difficulty
flation and the elimination of currency controls were
raising external financing as well, foreign direct invest-
priorities in the past year. Inflation in both countries
ment is on the rise. Authorizations for new foreign in-
had fallen to manageable levels early in 1990, and ex-
vestment in Turkey climbed to $1.5 billion in 1989, an
change rates had become internally convertible, greatly
80 percent increase over 1988; actual inflows reached
improving the environment for foreign investment.
$650 million.
All three countries face, in varying degrees, sub-
In the Middle East, Egypt, Jordan, and the
stantial macroeconomic problems. As a result, their
Republic of Yemen continued to adjust to a drop
Governments are making difficult decisions during a
in incomes resulting from low oil prices, falling work-
period of political change, when their responsiveness to
ers' remittances, and the decline of growth in the major
popular will is being tested.
oil-exporting countries. In Egypt, the Government's
continuing efforts to improve the environment
for private investment and decontrol prices have
begun to bear fruit. Export-oriented projects in
the free trade zone are attracting private capital.
A loosening of price controls in the hotel indus-
try and a remarkable increase in foreign tourism
have accelerated domestic and foreign private
investment in the tourism sector. In Jordan,
progress is being made towards restoring the
business community's confidence in the econo-
my. The recent reunification of the Yemen Arab
Republic and the People's Democratic Republic
of Yemen promises to result in greater opportu-
nities for private sector activity.
IFC helped to establish Poland's first onlending facility, the Export
Development Bank, which will provide financing to small Polish
26
enterprises like this fruit and vegetable processing company.
FY90 Project Approvals: Europe and Middle East
(US$ millions)
Gross
Project
Company
Country
Activity
Investment
Cost
Leptos Calypos Bay Hotels Ltd.
Cyprus
Tourism
8.20
30.00
Al-Hikma Pharmaceuticals (Jordan), Limited
Jordan
Pharmaceuticals
2.00
5.32
Bristol Hotel
Poland
Tourism
10.22
36.20
Export Development Bank*
Poland
Credit line/Quasi-equity facility
29.60
60.00
AL HIKMA Farmaceûtica (Portugal), Limitada
Portugal
Pharmaceuticals
2.00
6.00
Banco Português de Investimento (BPI)
Portugal
Development finance
2.03
72.35
Sociedade de Capital de Risco S.A.-Inter-Riscof
Portugal
Development finance
.02
2.10
União Industrial Textil e Quimica S.A. (UNITECA)
Portugal
Chemicals/petrochemicals
6.63
16.11
Anadolu Cam Sanayii A.S.S
Turkey
Glass manufacturing
.10
1.56
Conrad International
Turkey
Tourism
49.00
93.00
Kamelya Turism Islemecilik and Sol Hotels
Turkey
Tourism
11.84
43.00
Kepez Electric Company
Turkey
Power generation
25.00
67.60
Kiris Otelcilik ve Turizm A.S.
Turkey
Tourism
5.26
20.30
Koy-Tur
Turkey
Poultry production
12.60
25.90
Mersin Enternasyonal Otelcilik A.S.
Turkey
Tourism
12.50
25.00
Nasas Aluminyam Sanayii ve Ticaret A.S. (NASAS)S
Turkey
Non-ferrous metals
.05
14.67
Silkar Turism Yatirim ve Isletmeleri A.S.
Turkey
Tourism
22.64
38.50
Simplot ve Besikcioglu A.S.
Turkey
Agribusiness/food processing
9.50
47.33
Salonit Anhovo
Yugoslavia
Pipe manufacturing
6.82
16.70
Subtotal
216.01
621.64
Capital Markets approvals (see p. 34)
27.73
201.80
Total
243.74
823.44
*
Project undertaken in cooperation with the Capital Markets Department.
§ As a rights issue under $250,000, this project is not included in the total number of approvals.
Regional Initiatives
prospective new members. To take account of growing
demand for its services in Eastern Europe, the Corpo-
In Europe and the Middle East, IFC's main effort
ration made plans to restructure its regional investment
in FY90 was in expanding the role of private enterprise,
departments. The new organizational structure took
particularly in the manufacturing and banking sectors.
effect on July 1, 1990.
In Poland, IFC actively sought joint-venture invest-
ment opportunities arising from privatizations; IFC also
provided advisory assistance to Poland's new govern-
Highlights of the Year's Activities
ment with regard to privatization, foreign investment,
the development of local capital markets, and the intro-
duction of foreign banks. IFC supported efforts to
During fiscal year 1990, total financing of
strengthen the financial and banking sectors in both
$244 million was approved for 21 projects in 7 coun-
Hungary and Poland. In Oman and Turkey, it initiated
tries in Europe and the Middle East, including capital
discussions and provided advice on BOT projects in in-
markets projects. Of this amount, loans and one stand-
dustries that have traditionally been the domain of the
by facility accounted for $188 million, equity and
public sector, such as power generation. In Egypt, IFC
quasi-equity investments for $40 million, and under-
pursued promotional activities, especially in the tour-
writings for $16 million. In FY89, a total of $259 mil-
ism sector. Given the abundance of low-cost skilled
lion in loan, equity, and quasi-equity financing was
labor in Egypt, IFC began to study the possibility of
approved for 15 projects in the region.
participating in export-oriented projects-particularly
At the close of FY90, IFC's committed port-
in the pharmaceutical, textile, and paper industries-
folio included investments of $889 million in 82
located in free trade zones.
companies in 12 countries in Europe and the Middle
During FY90, IFC held discussions with the Gov-
East-$798 million in loans and $91 million in equity
ernments of Bulgaria, Czechoslovakia, and Romania,
and quasi-equity. This compares with investments of
27
$756 million in 74 companies in 12 countries at the end
INVESTMENT APPROVALS
of FY89.
FY86 90
IFC continued to participate in Turkey's rapidly
growing tourism sector. Financing was approved for
US$ millions
Cumulative
Yearly
four beach resort hotels and two city hotels. IFC also
1,000
approved investments in two agro-industrial expansion
projects: Simplot ve Besikcioglu A.S., for production
800
of frozen French fries for the export market; and
Koy-Tur, for production of animal feed and poultry.
600
IFC also approved a loan, for $25 million, to a privately
owned and operated power-generation facility, Kepez
400
Electric, to support the construction of a 47-megawatt
hydroelectric dam. In addition, it provided fee-based
200
financial advisory and restructuring services to a num-
ber of domestic and joint-ventures companies.
0
In FY90 IFC undertook its second project in
1986
1987
1988
1989
1990
Poland. It is providing DM50 million ($30 million
equivalent) to the Export Development Bank (EDB),
Poland's first credit facility. Acting as IFC's agent, EDB
will provide financing in amounts ranging from
DM100,000 to DM8 million in the form of quasi-
equity investments and term loans to small Polish com-
panies. The project, which was jointly undertaken by
the investment department for Europe and the Middle
mentally unsound asbestos cement pipes currently used
East and IFC's Capital Markets Department, also
in the country's water and sewage transport systems. It
included grant-financed technical assistance for
also studied the possibility of expanding its activities in
improving EDB's capabilities in appraising and super-
the country in view of recent structural and legal
vising loans. In FY90 IFC approved its first large joint-
changes affecting the ownership and operation of
venture operation in Poland, with a $10 million loan
enterprises.
for the reconstruction of Warsaw's prestigious Bristol
In Jordan, IFC approved equity financing for
Hotel. IFC structured the venture, which represents
Al-Hikma, a successful, domestically owned pharma-
the first major privatization exercise in Poland, and
ceutical company, which will produce intermediate
served as the Polish Government's key adviser.
products for its domestic operations. IFC also approved
More generally, IFC provided technical assistance
loan financing to help Al-Hikma build a new plant in
to the Polish Government, commenting on draft legis-
Portugal. IFC has made previous investments in the
lation on privatization and providing information on
company.
criteria and methodology for selecting privatization
In Hungary, IFC advised the government agency
candidates.
responsible for privatization activities and was invited
In Yugoslavia, IFC approved a project to produce
to provide advisory services in connection with a
PVC-plastic pipes, which will replace the environ-
specific privatization candidate.
28
LATIN AMERICA AND THE
Argentina and Brazil have introduced comprehen-
CARIBBEAN
sive austerity programs to break the vicious circle of
extensive public borrowing, higher interest rates, and
hyperinflation. They have also introduced reforms to
Investment Overview
reduce the state's direct involvement in economic ac-
tivity, adopted more realistic exchange rate policies,
Macroeconomic performance in Latin America
and eliminated most investment subsidies and other
and the Caribbean was uneven during the past year.
government-related distortions. Although it is too early
Chile and Paraguay grew by 10 percent and 5 percent,
to assess the degree of success of these programs, the
respectively; however, Argentina and Peru struggled
immediate effect has been a dramatic reduction of in-
with hyperinflation and severe recessions. Argentina
flation. Not unexpectedly, private investment has been
and Brazil, which were adjusting to recent political
curtailed. Cash-flow problems and shrinking domestic
changes, introduced major adjustment programs in
demand have forced many firms to postpone invest-
1989 and 1990. Venezuela embarked on a radical
ment. On the other hand, the long-term purpose of
structural adjustment program last year. GDP fell by
these programs is to make the Argentine and Brazilian
8.1 percent; however, there was a marked improve-
economies more responsive to free-market principles
ment in the country's external accounts, as the current
and forces. If successful, these programs will reactivate
account went from a deficit of 7.5 percent of GDP
the private sector. Favorable exchange rates, freer trade
in 1988 to an estimated surplus of 4.6 percent of GDP
regimes, and reduced domestic demand are already
in 1989. The Bolivian economy maintained a modest
causing some firms to turn to export markets and
growth rate of 2.8 percent in 1989. Mexico's economy
continued to respond to adjustment efforts, growing by
just under 3 percent. Colombia was also able to sustain
growth of about 3 percent, despite security problems
and reduced earnings from coffee exports. Growth of
GDP was roughly 3 percent in Central America, but
Prospectus
negligible in the Caribbean.
5,882,353 American Depositary Shares
Representing
Many countries in the region are giving the private
100,000,001 Shares of Series A Common Stock
CTC
sector wider scope by reducing government regulation
Compañía de Teléfonos de Chile S.A.
and public-sector investment in industry. The privati-
(Telephone Company of Chile)
zation of state-owned enterprises is part of this shift
Each American Depositary Share ("ADS") represents 17 shares of Series A Common Stock, without face
towards greater reliance on the private sector. Some
value ("Series A Common Stock"), of Compañía de Teléfonos de Chile S.A. (the "Company") The ADSs
are evidenced by American Depositary Receipts ("ADRs"). See "Description of American Depositary
Receipts"
countries are also liberalizing their foreign-investment
The offering of 5,882,353 ADSs is being made in two concurrent offerings, one offering outside the United
States and Canada (the "International Offering") and one in the United States and Canada (the "U.S.
policies.
Offering"). Of the 5,882,353 ADSs offered by the Company, 1,470,588 are being offered in the
International Offering and 4,411,765 are being offered in the U.S. Offering, subject to transfers between
the underwriters of each of the offerings. See "Underwriting".
Prior to this offering there has been no public market in the United States for the ADSs or the Series A
Common Stock The Series A Common Stock is listed on and trades on the Santiago Stock Exchange.
The closing sales price on the Santiago Stock Exchange for the Series A Common Stock based on its
Official Quotations Bulletin as of the close of business on July 19, 1990 was Ch$260 per share equivalent
to US$14.92 per ADS (representing 17 shares of Series A Common Stock), translated at the 'Dólar
Observado" rate of Ch$296.32 per US$1.00 for such day.
Under applicable Chilean regulations, persons who are domiciled or resident in Chile are not entitled to
the foreign exchange treatment accorded other holders of ADSs by the Central Bank of Chile See
"Foreign Investments and Exchange Controls in Chile" and 'Description of American Depositary
Receipts" For a discussion of certain considerations attendant with an investment in a Chilean company,
see "Chilean Company Investment Considerations"
The ADSs are listed on the New York Stock Exchange under the symbol "TCH"
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Price to
Underwriting
Proceeds to
Public
Discount(1)
the Company(2)
Per American Depositary Share
$15.125
$.885
$14.24
Total(3)
$88,970,589
$5,205,882
$83,764,707
(1) See 'Underwriting' for information with respect to indemnification provided to the several underwriters of the U.S. and
International Offerings
(2) Before deducting offering expenses payable by the Company, estimated at $1,998,936 See "Underwriting"
(3) The Company has granted the underwriters of the U.S. and International Offerings day options to purchase up to 616,984
additional ADSs (representing the right to receive up to total of 10 728 shares of Series A Common Stock) at the Price
to Public, less the Underwriting Discount to cover over allotments. if any If all such additional ADSs are purchased by the
underwriters of the U.S. and International Offering the total Price to Public Underwriting Discount and Proceeds to the
Company will be $98,302,472 $5,721,913 and $92,550 respectively See Underwriting
The ADSs offered by this Prospectus are offered by the underwriters of the International Offering subject
to prior sale, to withdrawal, cancellation or modification of the offer without notice, to delivery to and
acceptance by the underwriters of the International Offering, and to certain further conditions It is
expected that the ADRs evidencing ADSs will be ready for delivery at the offices of Salomon Brothers
International Limited, London, England, on or about July 27, 1990
Salomon Brothers International Limited International Finance Corporation
IFC was the lead underwriter in the first international equity offering by a
The date of this Prospectus is July 20. 1990
Latin American company in over 20 years.
29
FY90 Investment Approvals: Latin America and the Caribbean
(US$ millions)
Gross
Project
Company
Country
Activity
Investment
Cost
Hidra Oil Development (Hidra)
Argentina
Oil development
30.00
30.00
Petroquímica Ensenada S.A. (Petroken)
Argentina
Petrochemicals
35.00
135.10
Terminal 6 S.A.
Argentina
Port services
4.00
13.20
Journey's End Caribbean Club Limited
Belize
Tourism
1.00
3.00
Banco Industrial S.A. (BISA)
Bolivia
Development finance
2.12
5.90
Bahia Sul Celulose S.A. (Bahia Sul)
Brazil
Timber, pulp, and paper
55.00
897.00
Companhia Minuano de Alimentos (Minuano)
Brazil
Poultry
7.00
28.00
Companhia Vidraria Santa Marina (Santa Marina)
Brazil
Glass manufacturing
25.00
103.00
Engepol Engenharia de Polimeros S.A. (Engepol)
Brazil
Plastics manufacturing
3.50
11.54
Ripasa S.A. Celulose e Papel (Ripasa)
Brazil
Timber, pulp, and paper
25.00
146.00
Compañía de Teléfonos de Chile S.A. (CTC)*t
Chile
Telecommunications
152.10
1,104.40
Compañía Puerto de Coronel S.A. (Puerto Coronel)
Chile
Port services
8.00
39.70
Compañía Colombiana de Tejidos, S.A. (Coltejer)
Colombia
Textiles
22.50
56.86
Oleoducto de Colombia S.A.
Colombia
Oil pipeline
70.00
321.00
San Isidro Free Trade Zone
Dominican Republic
Industrial services
6.00
15.30
Sociedad Comercializador, S.A. (Comersa)
Dominican Republic
Construction materials/cement
.08
.78
Banca Serfin*
Mexico
Development finance
6.50
22.00
Bancomer*
Mexico
Credit line
20.00
40.00
Banco Nacional de Mexico (Banamex)*
Mexico
Credit line
60.00
200.00
Grupo Condumex, S.A. de C.V.
Mexico
Manufacturing
50.00
128.00
Grupo Primex, S.A. de C.V.
Mexico
Petrochemicals
20.00
57.50
Indelpro, S.A. de C.V.
Mexico
Petrochemicals
42.00
108.00
Petrocel
Mexico
Petrochemicals
32.00
101.60
Compañía de Minas Buenaventura S.A. (Buenaventura)
Peru
Non-ferrous mining
.60
6.00
Productora de Alcoholes Hidratados, C.A. (Pralca)
Venezuela
Petrochemicals
41.40
142.50
Subtotal
718.80
3,716.38
Capital Markets approvals (see p. 34)
16.08
473.10
Total
734.88
4,189.48
*
Project undertaken in cooperation with the Capital Markets Department.
t Two projects, one involving loan and quasi-equity financing of $130 million, the other, underwriting of $22.1 million.
creating competitive pressures that require investments
GDP; the manufacturing sector has been growing by
in modernization, restructuring, and expansion. How-
about 6 percent. However, as the growth of domestic
ever, the scarcity of medium- and long-term credit,
demand is still modest, and high real domestic interest
especially in foreign exchange, continues to be a serious
rates constrain major greenfield investments, most private-
constraint for these companies.
sector investment is still concentrated on debottleneck-
Bolivia's economy has begun to recover, albeit
ing and on improvements to increase efficiency.
slowly, from the problems of the early 1980s-hyper-
In Venezuela, economic liberalization is proceed-
inflation and a huge debt burden resulting from ineffi-
ing rapidly; exchange rates have been unified, interest
cient macroeconomic management. Over the past five
rates freed, and tariffs and quotas reduced. The fiscal
years, the Government has created an environment fa-
deficit was cut from 8.3 percent of GDP in 1988 to
vorable to private investment by liberalizing markets,
1.4 percent in 1989. The private sector has accepted
removing price controls and trade barriers, and reduc-
the liberalization program and has begun to respond.
ing state involvement in the private sector. The Govern-
Non-traditional exports increased from $1.5 billion in
ment has also made substantial progress in regularizing
1988 to $2.7 billion in 1989. The country is consider-
its relations with external creditors.
ing broadening its $600 million annual debt-equity
In Mexico, where trade and foreign-investment
conversion program to encourage larger investments,
laws have been liberalized to encourage broader for-
and the privatization program has begun, with an em-
eign participation, foreign investment increased by
phasis on smaller enterprises.
10 percent in 1989. Private investment is estimated to
While the pace of change in Colombia has not
30 have increased by 10 percent to almost 16 percent of
been as rapid, the extent of liberalization is expected to
be similar. The Government recently launched a plan
INVESTMENT APPROVALS
to dismantle the protective barrier surrounding domes-
FY86 90
tic industry. Progress towards liberalization has gener-
ally been slower in Central America and the Caribbean.
US$ millions
Cumulative
Yearly
3,500
Regional Initiatives
3,000
In Mexico, IFC continues to invest in moderni-
2,500
zation and efficiency-enhancing programs in many
2,000
different types of companies facing heightened com-
petition in a more open economy. Many firms are
1,500
sharpening their market focus and becoming interna-
1,000
tionally competitive. Large companies are being helped
500
directly with IFC investments and advisory services;
small and medium-size companies are being assisted
0
through credit lines provided to local commercial
1986
1987
1988
1989
1990
banks. One of the credit lines approved in FY90 will
be onlent to companies in the maquiladora sector,
which produce goods for export. IFC is helping some
major Mexican corporations gain access to the interna-
tional capital markets, for example by arranging cur-
nications and port construction and operation. These
rency swaps and designing securities issues.
services are essential to Chile's ability to remain one
IFC continues to support projects in Venezuela
of Latin America's most efficient exporters. IFC will
that utilize the country's abundant natural resources,
continue to support economically sound projects that
promote downstream integration, and produce ex-
further privatization efforts. IFC also encouraged intra-
ports. The petrochemical project approved in FY90
regional investment. It approved an investment in
utilizes Venezuela's low-cost natural-gas supply to
a joint venture between a Brazilian and a Chilean
manufacture products for the domestic and interna-
company.
tional markets. In Colombia, IFC focused on projects
involving industrial modernization and the manufac-
ture of goods for export. IFC provided advisory serv-
Highlights of the Year's Activities
ices, as well as an investment, to support the modern-
During fiscal year 1990, total financing of
ization program of one of the country's leading textile
$735 million was approved for 29 projects in 10 coun-
producers. It also approved an investment to help
tries in Latin America and the Caribbean, including
finance the construction of an oil pipeline, which is
capital markets and energy projects. Of this amount,
expected to alleviate a major transport bottleneck.
loans, guarantees, and standby facilities accounted for
IFC's emphasis in the Caribbean was on tourism
$616 million, equity and quasi-equity investments for
projects and on the expansion of the operations of
$91 million, and underwritings for $28 million. In FY89,
the Caribbean Project Development Facility (p. 41).
a total of $842 million in loan, equity, and quasi-equity
IFC also supported ventures in the Southern Cone
financing was approved for 30 projects in the region.
based on natural resources, such as a petrochemical
At the close of FY90, IFC's committed portfolio
company in Argentina, as well as import-substitution
included investments of $2.1 billion in 162 companies
projects with strong sponsors. IFC's ability to mobilize
in 21 countries in Latin America and the Caribbean
project finance from other investors and lenders con-
-$1.8 billion in loans and $263 million in equity and
tinued to be important to the success of ventures in
quasi-equity. This compares with investments of $1.9 bil-
Latin America, where many commercial banks are
lion in 160 companies in 22 countries at the end of FY89.
reluctant to increase their exposure.
In Mexico, IFC completed a $50 million loan
The Corporation also actively promoted the role of
to Condumex, a supplier of auto parts and electrical
the private sector in areas traditionally reserved for the
equipment, to help finance a program to increase
state. The investments approved in Chile were for two
Condumex's capacity and reduce costs. The share of
enterprises, one recently privatized and the other new,
sales represented by exports is projected to increase
that provide basic infrastructure services-telecommu-
from 22 to 32 percent as a result of the program. A
31
$60 million credit line was provided to Mexico's largest
into equity) was approved for Engepol, a plastics manu-
commercial bank, Banco Nacional de Mexico, for on-
facturing company formed by one of IFC's Brazilian
lending to small and medium-scale companies to enable
clients in a 60/40 joint venture with a Chilean partner.
them to restructure, improve efficiency, and enhance
The project will produce high-density polyethylene
competitiveness. The project is one of three in Mexico
sheets and tubes for the mining, agricultural, and waste-
undertaken jointly by the regional investment depart-
treatment sectors, primarily for the Brazilian market.
ment and IFC's Capital Markets Department. In the sec-
This project is a good example of intra-regional invest-
ond project, IFC provided a $20 million credit line to
ment supported by IFC. A $7 million quasi-equity
Bancomer, a commercial bank, for onlending to compa-
investment approved by IFC will help finance the
nies in the maquiladora sector; in the third, which also in-
expansion of Companhia Minuano de Alimentos, a
volved IFC's Financial Operations Division, IFC arranged
medium-size, export-oriented poultry producer.
a currency swap for Banca Serfin to reduce the foreign-
In Chile, the Corporation approved financing of
exchange risk associated with a Deutsche Mark loan.
$130 million for the Compañía de Teléfonos de Chile
This was the first such swap ever arranged by IFC for a
S.A. (CTC). In addition, through the International
client. Three investments were approved in Mexico's
Securities Group in its Capital Markets Department,
petrochemical sector: $42 million in loan and quasi-
IFC supported CTC's issue of American Depositary
equity financing to Indelpro to help set up the country's
Receipts (ADR) in the international capital markets by
first facility to produce polypropylene; a $20 million loan
underwriting $22 million of CTC's placement. At a
to Grupo Primex, which will expand its production of
total cost of over $1.1 billion, CTC is embarking on a
polyvinyl chloride; and $32 million in loan and quasi-
five-year investment program to double the number of
equity financing to Petrocel, which is expanding its
phone lines and improve long-distance services
production of purified terephthalic acid and dimethyl
through the use of fiber-optics and satellite linkages.
terephthalate, the principal raw materials used in the
IFC also approved an investment in Compañía de
manufacture of polyester.
Puerto Coronel S.A., a new private venture that will
In Venezuela, IFC approved financing of
construct and operate a commercial port in Chile's
$41.4 million for a petrochemical company, Productora
eighth region. The $5 million credit and $3 million
de Alcoholes Hidratados, C.A. (Pralca), which will pro-
equity investment will finance part of the estimated
duce ethylene oxide and ethylene glycol. In Colombia,
$40 million project, which will be undertaken by part-
IFC provided advisory assistance and a loan of $22.5 mil-
ners from Argentina, Chile, and New Zealand.
lion in connection with the modernization program of
In Argentina, the Corporation approved an invest-
Compañía Colombiana de Tejidos, S.A. (Coltejer), a
ment in Petroquímica Ensenada S.A., a joint venture
major textile producer. IFC also approved a loan of
between Ipako S.A. and Shell C.A.P.S.A. of Argentina
$70 million to help Oleoducto de Colombia build a
that will produce polypropylene for the export market.
crude-oil pipeline that will transport 150,000 barrels of
IFC's $20 million credit, which was critical to the com-
oil per day for export. The Caribbean Project Develop-
pletion of the financing plan, will complement a strong
ment Facility (p. 41) identified a project to expand a free
equity participation and financing provided by export-
trade zone in the Dominican Republic for which IFC
credit agencies.
subsequently approved a $6 million investment.
In Bolivia, IFC approved its second currency
Despite accelerating inflation and political uncer-
swap for a client. IFC will arrange for BISA (Banco
tainties, private Brazilian companies continued to invest
Industrial, S.A.), a privately owned development bank
and to seek IFC's assistance. IFC approved financing of
in which IFC has made previous investments, to swap
$55 million, including $15 million in equity, for Bahia
a Deutsche Mark loan from DEG into U.S. dollars, the
Sul, an $897 million greenfield, partially integrated pulp
currency used in BISA's onlending operations, mini-
and paper project in the south of Bahia State, one of
mizing its foreign exchange risk.
Brazil's less developed regions. A loan of $20 million and
In Brazil, IFC provided advisory services to ABC,
an equity investment of $5 million were approved for
a large conglomerate, helping ABC's management to
Ripasa, Brazil's third largest integrated paper manufac-
develop a comprehensive restructuring program and
turer. Both projects will generate substantial export earn-
define the company's medium-term business strategy.
ings for the country. IFC also approved a loan and quasi-
IFC's assistance was critical in the selection of the com-
equity financing of $25 million for Companhia Vidraria
pany's core businesses and in the improvement of
Santa Marina, a fiberglass company controlled by the St.
financial controls, management information systems,
32 Gobain group. A $3.5 million loan (partially convertible
and external resource mobilization.
CAPITAL MARKETS
markets projects approved during the year reached
$423 million-almost three times the volume approved
in FY89-for 33 projects in 14 countries and one re-
IFC assists its member countries in the develop-
gion. Thirteen of these projects were undertaken jointly
ment of their financial sectors through the operations of
by the Capital Markets Department and the regional in-
the Capital Markets Department:
vestment departments. In FY89 investments of $160
advising governments on the fiscal, legal,
million were approved for 20 projects in 13 countries.
and regulatory frameworks needed for healthy,
While sustaining this high volume of activity, the
market-oriented financial sectors;
Capital Markets Department achieved a geographic bal-
providing both finance and technical assistance
ance among its project approvals. There was also an even
to local financial institutions-often the first of
mix of the Department's three main investment activi-
their kind in the host countries;
ties: institution-building, onlending through financial
introducing international investors to the emerg-
intermediaries, and international securities transactions
ing markets by sponsoring, underwriting, and
(see pie charts on p. 35).
distributing in the international markets both
In FY90 IFC approved ten institution-building
country funds (including debt-equity conversion
projects. It helped establish one of the first merchant
funds) and new issues of securities by companies
banking institutions in Pakistan; took an important
in the developing world.
equity stake in, and provided a $15 million credit line to,
the RAL Merchant Bank in Zimbabwe, to help the
bank increase its foreign-exchange financing business
Highlights of the Year's Activities
and diversify its clientele to include smaller businesses;
approved an investment in a venture capital company
The Capital Markets Department grew significantly
in India to promote the commercial development of
during fiscal year 1990. Gross investments in capital
locally based technology; helped six leasing companies to
increase their business capaci-
ty (one each in Chile, Korea,
the Philippines, and Turkey,
and two in India); and made
an investment in a mutual
funds management company
in Thailand.
IFC expanded its on-
lending activities during the
fiscal year. It established the
first onlending facility in
Poland, with a DM50 million
loan to the Export Develop-
ment Bank. It also approved
loans to financial intermedi-
aries in Indonesia, Mexico,
and Zimbabwe for onlending
to medium-size enterprises.
The fastest growing area
of IFC's capital markets ac-
tivities involved internation-
al securities transactions.
In FY90 IFC launched 11 country funds
that mobilized over $1 billion for companies
throughout the developing world.
33
FY90 Project Approvals: Capital Markets
(US$ millions)
Gross
Project
Company
Country
Activity
Investment
Cost
Corporación de Inversiones y Privatización
Argentina
Investment management
.08
388.10
Jardine Fleming Asia Select Limited
Asia
Investment fund
11.25
100.00
Compañía de Teléfonos de Chile S.A.*T
Chile
Telecommunications
22.10
110.00
Five Arrows Chile Fundt
Chile
Investment fund
6.00
75.00
Leasing Andino
Chile
Leasing
10.00
10.00
First Hungary Fund
Hungary
Investment fund
7.50
80.00
India Lease Development Limited
India
Leasing
3.94
13.37
Infrastructure Leasing and Financial Services
India
Leasing
16.95
16.95
Technology Development and Information
Company of India
India
Venture capital
2.87
60.00
Bank Niaga
Indonesia
Agency credit line
7.50
15.00
Indonesia
Agency credit line
10.00
20.00
Bank Umum Nasional*
Nomura Jakarta Fundt
Indonesia
Investment fund
3.00
30.00
Indonesia
Leasing
.07
.56
P.T. Saseka Gelora Leasing$
Korea Development Leasing Corporation
Korea
Leasing
.90
46.30
The Leasing and Finance Company of Malawi$
Malawi
Leasing
.11
1.08
Banca Serfin*
Mexico
Development finance
6.50
22.00
Mexico
Credit line
20.00
40.00
Bancomer*
Mexico
Credit line
60.00
200.00
Banco Nacional de Mexico (Banamex)*
First International Investment Bank
Pakistan
Merchant bank
.69
4.76
All Asia Capital and Leasing Corporation
Philippines
Leasing
.26
2.30
The First Philippine Fundt
Philippines
Investment fund
20.00
100.00
Philippines
Investment fund
7.00
50.00
The Manila Fundt
Export Development Bank*
Poland
Credit/Quasi-equity facility
29.60
60.00
Portugal
Investment fund
4.00
30.00
Finantia Capital
Portuguese Investment Fundt
Portugal
Investment fund
6.00
30.50
Mutual Fund Company
Thailand
Fund management
.26
3.20
ISGEN Leasing
Turkey
Leasing
.23
1.30
Turkey
Investment fund
10.00
60.00
Turkish Investment Fundt
Zimbabwe
Credit line
20.11
20.11
Barclays Bank of Zimbabwe Ltd.*
Merchant Bank of Central Africa Ltd.*
Zimbabwe
Credit line
25.21
25.21
RAL Merchant Bank Ltd.*
Zimbabwe
Credit line
30.21
30.21
RAL Merchant Bank Ltd.
Zimbabwe
Merchant bank/credit line
17.85
19.00
Zimbabwe
Credit line
7.50
7.50
Scotfin Limited*
Standard Chartered Merchant Bank*
Zimbabwe
Credit line
30.21
30.21
Zimbabwe
Credit line
25.21
25.21
Syfrets Merchant Bank Ltd. Zimbabwe*
Total
423.11
1,727.87
* Project undertaken in cooperation with a regional investment department.
t Underwriting.
§ As a rights issue under $250,000, this project is not included in the total number of approvals.
Note: Private placements by the Capital Markets Department, which are not shown in this table, came to $328 million in FY90, including
placements of $113 million for the Emerging Markets Investment Fund.
During the year, interest in, and demand for, new-
Fund, and the Turkish Investment Fund were the first
money country funds that invest in emerging markets
investment funds ever in Hungary, the Philippines, and
remained strong, although fund activity tapered off
Turkey, respectively.
during the fourth quarter. IFC remained at the fore-
IFC made use of certain investment instruments
front of this activity, participating in the structuring and
for the first time. It was directly involved in arranging
launching of 11 funds that mobilized over $1 billion in
a currency swap for Banca Serfin in Mexico. Two
the international markets. It participated as promoter,
"mezzanine" funds were launched in Portugal
underwriter, placement agent, and, when appropriate,
(Finantia Capital) and Southeast Asia (Jardine Fleming
investor. The Nomura Jakarta Fund (Indonesia), the
Asia Select) to invest in companies planning to obtain
Portuguese Investment Fund (Portugal), and the Five
listings on local stock markets. IFC placed with private
Arrows Chile Fund (Chile), were IFC's first funds in
institutional investors a total of $328 million in securi-
34 those countries. The First Hungary Fund, the Manila
ties in these two funds and three others: Corporación
de Inversiones y Privatización (Argentina), First
produced The EMDB Company Guide, which presents
Hungary Fund (Hungary), and the Emerging Markets
operating data on a representative sample of companies
Investment Fund (worldwide).
in selected emerging markets.
During the year IFC established the International
During the fiscal year, IFC continued to provide
Securities Group (ISG) to enhance its activities in in-
technical assistance to member countries. It coordinat-
ternational capital markets. Most important, ISG helps
ed studies for nearly 40 countries and regions on exist-
companies in developing countries gain access to the
ing and proposed legal and regulatory frameworks
major financial markets through the issue of stocks and
designed to support capital market development. It
bonds. ISG became fully operational during the second
also carried out comprehensive reviews of the financial
quarter of FY90 and has developed an active pipeline
sectors of several countries at the request of their
of projects. It was instrumental in structuring, under-
governments.
writing (as co-lead manager), and placing a landmark
public issue of American Depositary Receipts (ADRs)
for Compañía de Teléfonos de Chile S.A. in the inter-
Future Efforts
national capital markets. This issue is registered with
the Securities and Exchange Commission and listed on
In the coming fiscal year, the Capital Markets
the New York Stock Exchange. It constitutes the first
Department will continue to seek a balance among the
international public equity offering for a Latin Ameri-
different types of activities, financial sectors, and geo-
can company in over 20 years.
graphical regions in which it is involved. In response
The Department's Emerging Markets Data Base
to demand, and in light of recent political events, the
(EMDB), with statistics on the stock markets of 19
Department will step up its efforts in areas such as
developing countries and more than 700 companies,
institution-building in Africa and Eastern Europe. It
continues to enjoy commercial success. EMDB com-
will expand its advisory and technical assistance program
plements the Department's investment activities by
and, while supporting traditional financial transactions,
providing scarce, much-needed information on
develop new products in connection with international
emerging markets to financial institutions and the
securities offerings. EMDB will complement these
press. In response to client demand, in FY90 EMDB
efforts by enlarging the array of products it provides
expanded its coverage to include Indonesia; it also
to a sophisticated international financial community.
CAPITAL MARKETS PROJECTS
International securities
Institution
transactions
building
13
10
GEOGRAPHICAL BREAKDOWN
Asia
13
Africa
7
On-Lending
11
BREAKDOWN BY TYPE OF PROJECT
Latin America
Europe and
and Caribbean
Middle East
7
6
35
CORPORATE FINANCE
advice on financial restructuring.
SERVICES
After conducting a comprehensive review of
Philippine Airlines (PAL), CFS designed a de-
tailed debt-reduction and privatization program
The Corporate Finance Services Department
to enable PAL to achieve financial viability with
(CFS) provides advisory services for corporate structur-
a new ownership structure. PAL accepted CFS's
ing, including financial restructuring, and privatiza-
recommendations and has decided to implement
tions. It works closely with other departments in IFC.
the program.
When the CFS Group was created in FY89, IFC had
Having helped the Government of Pakistan in
already successfully completed a number of investment
FY89 to identify suitable candidates for privati-
projects involving restructuring and privatization, and
zation, CFS has submitted a proposal delineating
it wished to expand its activities in these areas to satisfy
its recommendations on how to approach the
growing demand on the part of developing member
privatization of selected candidates.
countries. CFS has quickly gained recognition and
CFS assisted the Government of Poland in
acceptance by governments, private companies, and
creating the legislative and institutional frame-
financial advisers. In view of the rapid growth of its
works needed to establish private ownership and
activities and the success of its first advisory transac-
facilitate privatization. Several enterprises are
tions, CFS was given departmental status in January
currently being considered for divestiture by the
1990, and its staffing was increased.
state.
CFS continued to help the Government of
Nepal formulate a privatization policy. An agree-
Restructuring
ment was reached with the Government and
UNDP on the details of an advisory assignment
CFS was retained in FY90 to assist with the
for CFS, which will encompass institution-
financial restructuring of Philippine Associated Smelt-
building and the transfer of skills, as well as direct
ing and Refining Corporation (PASAR). The primary
support to two transactions. UNDP is expected
objective of this advisory project is the development of
to fund the assignment.
a viable financial structure for PASAR through a debt-
During the fiscal year, CFS also held discussions
reduction program; however, the project may also
on restructuring and privatization assignments with
result in PASAR's privatization through a reduction
companies and governments in Antigua, Argentina,
of the Government's majority shareholding.
Bolivia, Egypt, Greece, Hungary, India, Jamaica,
Malaysia, Mexico, Morocco, Nigeria, Paraguay,
Thailand, Turkey, Uruguay, Venezuela, and
Privatizations
Yugoslavia. A number of these countries have asked
CFS to submit specific proposals either for restructur-
In FY90 IFC worked on a number of privatization
ing and privatization or for financial advisory services in
advisory assignments; in most of these IFC also provided
connection with new projects.
36
OTHER OPERATIONS
Loan syndication is one of IFC's most effective
catalytic functions. Employing techniques developed
since the 1960s, IFC has successfully placed over
$3.1 billion of participations in its loans with 249 finan-
SYNDICATIONS
cial institutions, primarily international banks. While
participating banks remain fully exposed to commer-
Fiscal year 1990 was a record year for IFC Syndi-
cial risk, in practice the Corporation's special status has
cations, reflecting the growing willingness of a number
ensured that no IFC loan, including the portion taken
of banks to resume lending to projects in developing
by participants, has ever been included in the general
countries in collaboration with IFC. Of the $1.8 billion
rescheduling of any country's foreign debt.
of loans approved during the year, the amount syndi-
Other factors contributing to the success of IFC's
cated or pending syndication was $622 million, a his-
syndication program are the Corporation's favorable
torical high. The 37 institutions participating in these
experience in the servicing of its own loan portfolio,
syndications are listed below.
the benefit to participants of IFC's project appraisal and
At the end of FY90, the portfolio of loans admin-
loan supervision capabilities, and, in a growing number
istered by IFC for the account of participants stood at
of developed countries, the preferential treatment given
$1.1 billion, an increase of $158 million over the pre-
by bank regulators to participations in IFC loans, since
vious year.
IFC is the lender of record.
Financial Institutions Participating in IFC Projects in FY90
The Arab Investment Company S.A.A.
Kansallis-Osake-Pankki
Bank für Kärnten und Steiermark A.G.
Kreditanstalt für Wiederaufbau (KfW)
Bank für Oberösterreich und Salzburg (Oberbank)
Manufacturers Hanover Trust Company
Banque CSIA
NMB Postbank Groep N.V.
Banque Indosuez
Nederlandse Financierings Maatschappij
Banque Internationale à Luxembourg S.A.
voor Ontwikkelingslanden N.V.
Banque Marocaine du Commerce Extérieur
Österreichische Länderbank A.G.
Banque Nationale de Paris
Österreichische Volksbanken A.G.
Banque de l'Union Européenne
PKbanken
Bergen Bank A/S
Postipankki, Ltd.
Commerzbank AG
Raiffeisen Zentralbank Österreich A.G.
Crédit Lyonnais
Skopbank
Crédit National
Société Générale
Den norske Creditbank
Standard Chartered Bank
Deutsche Bank AG
The Sumitomo Bank, Limited
Ecobank Transnational Incorporated
Swiss Bank Corporation
Girozentrale und Bank der Österreichischen
The Tokai Bank, Limited
Sparkassen A.G.
Union Bank of Finland Ltd.
The Industrialization Fund for Developing
Union Bank of Switzerland
Countries
Zentralsparkasse und Kommerzialbank, Wien
37
The largest increase in IFC's syndication activity in
FY90 was in Asia, with six new projects in four coun-
Multi-Country Loan Facilities
tries. In Thailand, IFC is syndicating a $100 million
IFC has developed a new instrument for mobilizing
loan to help finance the $529 million Vinythai integrat-
medium-term foreign exchange lending from interna-
ed PVC plant, and a $30 million loan to Shin Ho Paper
tional commercial banks for small and medium-size
Co. for a newsprint paper mill and de-inking pulp
projects in selected developing countries. These projects
plant. In the Philippines a $25 million syndication is
would not normally be suitable for IFC financing be-
cause of their size.
being arranged, alongside IFC's own $65 million loan,
Under a Multi-Country Loan Facility (MLF), IFC
for the Luzon Petrochemical Corporation's $500 mil-
and an international commercial bank agree to provide
lion petrochemicals complex. IFC is also syndicating a
matching amounts of finance, in foreign currency, to
$29.5 million loan for the new Shangri-La Hotel in
projects in specified countries. The commercial bank,
Manila. A $3.4 million loan was arranged for a fatty
through its network of local branches, subsidiaries or of-
acids plant in Malaysia sponsored by Twenty First Cen-
fices, is responsible for identifying and appraising the
tury Oleochemicals Sdn. Bhd.
projects, and for subsequent loan supervision. Each loan
The gradual change in commercial bank attitudes
must be approved by IFC, which applies its normal in-
was most evident in Latin America, where during
vestment criteria, including adherence to World Bank
FY90 IFC completed or had pending syndications
Group environmental standards. IFC then acts as lender
of record for the full amount of the loan, with the com-
totaling $157 million for 9 projects in Argentina,
mercial bank's contribution taking the form of a partici-
Brazil, Chile, Colombia, Mexico, and Venezuela.
pation of 50 percent or more in the IFC loan.
Examples of FY90 transactions were a $35 million syn-
This mechanism has several advantages. It taps the lo-
dication, linked to a French export credit arranged by
cal knowledge and client relationships of major interna-
Société Générale, for Oleoducto de Colombia, S.A., a
tional banks; it encourages commercial banks to share
joint-venture company constructing a $321 million oil
additional medium-term project risks with IFC in devel-
pipeline in Colombia; a syndicated loan of $15 million
oping countries; and it provides foreign exchange for
to finance part of a $128 million expansion project for
developmentally valuable projects that would normally
Grupo Condumex, S.A. de C.V., a major Mexican
be too small for IFC to finance.
producer of wires and cables; and a $15 million syndi-
During fiscal year 1990, IFC approved the first three
such MLFs:
cation for Petroken Petroquímica Ensenada S.A., an
Argentine joint venture company which will construct
Commercial bank
Countries covered
and operate a $135 million polypropylene plant.
In Africa, IFC attracted over $150 million of com-
NMB Postbank
Chile, Indonesia,
mercial bank financing for three major projects. For
Malaysia, Uruguay
Ashanti Goldfields Corporation (Ghana) Limited, IFC
Algemene Bank
Indonesia, Morocco,
syndicated a $35 million loan as part of the $93 million
Nederland
Pakistan, Sri Lanka, Turkey
financing for the expansion of the Sansu gold mine
Banque Indosuez
Bangladesh, Malaysia,
complex. IFC arranged its second syndication for
Pakistan, Thailand, Turkey
Crédit Immobilier et Hôtelier, a Moroccan financial
institution: banks participated for $52 million in a total
In each case, additional countries may be added at a
IFC loan of $92 million, which is being used to finance
later stage. IFC is currently having discussions with other
a variety of foreign-exchange earning tourism develop-
commercial banks about MLF lending to other areas, in-
ments. In Zimbabwe, IFC, in cooperation with
cluding countries in sub-Saharan Africa.
Banque Nationale de Paris, is syndicating a $65 million
loan to a group of local financial institutions, for on-
lending to new export industries.
38
This announcement appears as matter of record only
CONDUMEX
Crédit Immobilier et Hôtelier
Grupo Condumex, S.A. de C.V.
Projets hôteliers au Maroc
Mexico
Prêts à moyen et long terme
d'une contrevaleur de
U.S. $109,000,000
U.S. $53,000,000
Montés par
Project Financing
International Finance Corporation
Provided by
Société Générale
Osterreichische Länderbank
International Finance Corporation
2,875,000,000
FF 118,000,000
and through Participations in
Pret long terme
the IFC Loan by
International Finance Corporation
NMB Bank
U.S. $33,000,000
Banque et Caisse d'Epargne de l'Etat, Luxembourg
DM 18,000,000
Dfl 15,000,000
Banque Française du Commerce Extérieur
Participations bancaires au prêr moven terme
Banque Internationale à Luxembourg
Co-Lead Managers
Société Générale
Societe Anonyme
Österreichische Länderbank
Nederlandse Financierings Maatschappij
Crédit National
voor Ontwikkelingslanden N.V.
GIROZE NTRALE und BANK
Crédit Suisse
Managers
Banque Française
June. 1990
Commerce Extérieur
Banque Internationale à Luxembourg
This announcement appears a a matter of record only
MB Bank (France)
SKOPBANK
Union Bank inland (France) S.A.
U.S. $154,700,000
Co-Mana
Arab Investment Company
rösterreich und
uncement CSIA (CRE) appears as matter of record only.
(BERBANK)
du Commerce
Philippine Long Distance
BMCE"
$80,000,000,PORATION of
Telephone Company
U.S. $70,000,000
Project Financing
Provided by
International Finance Corporation
and through Participations
in the IFC Loan
by German banks led by
hancing
This announcement appears matter of record only
U.S. $60,000,000
Term
Provided Corporation
by
HOTEL
CONRAD
International Finance
ISTANBUL
anque Nationale de In Manufacturers in Paris Bank p.l.c. Hanover of Switzerlandompany Standard Chartered Bank
Yeditepe Beynelmilel Otelcilik Turizm ve Ticaret A.S.
U.S. $49,000,000
Project Financing
Arranged by
International Finance Corporation
U.S. $10,000, Loan
U.S. $21,000,000
Project Term Loan
and
Standard International k Chartered Lenders' U.S. Provided Finance $10,000,000 Union by Corporation Bank Switzerland
U.S. $4,000,000
Equity Investment
Provided by
International Finance Corporation
U.S. $24,000,000
Sponsors Provided
Lonrho Plc
Provided through participation
in the IFC loan
Swiss Bank Corporation
Republic of Ghana
Banque Indosuez
Bergen Bank A/S
Crédit Lyonnais
International to Ashanti The undersigned structured Finance financial adtion Lamited. the Corporation
Zentralsparkasse und Kommerzialbank, Wien
Banque Internationale a Luxembourg
Den norske Creditbank PLC
The Tokai Bank, Limited
Hold Opening December 1991
Februan, page
March, 1990
AFRICA PROJECT DEVELOPMENT
FACILITY
Examples of APDF Projects
Guinea
The Africa Project Development Facility (APDF)
Alpha Chandelle S.A., a new company, will set up a
identifies promising African entrepreneurs and helps
small facility to manufacture 36 million candles annually
them prepare viable projects involving the start-up
for the local market. The estimated cost of the project is
of new businesses or the expansion, privatization, or
$500,000. The technology and equipment will be
diversification of established ones. Although APDF
imported from the Federal Republic of Germany. At the
local sponsor's request, APDF commissioned a market
does not finance projects itself, it provides partial fund-
study and reviewed the technical aspects and long-term
ing for market, technical, and other feasibility studies
viability of the project. Project implementation will be
and works directly with project sponsors until financ-
funded by a loan from the Banque Internationale pour le
ing has been raised.
Commerce et l'Industrie de Guinée (BICIGUI).
IFC is the executing agency of APDF, which was
established in 1986 as a UNDP project. UNDP's
Kenya
Assistant Administrator serves as Chairman of APDF's
APDF helped two women entrepreneurs negotiate
Advisory Board. The African Development Bank
the purchase of a retail clothing business in central Nairobi.
(ADB), APDF's regional sponsor, is represented on its
Using local materials, the sponsors design, make, and sell
Board of Directors. Funding for APDF's operating
professional and formal wear for women. A market study
commissioned by APDF and the sponsors confirmed the
costs is provided by ADB, IFC, UNDP, and fourteen
sponsors' belief that demand exists in Nairobi for moder-
countries: Belgium, Canada, Denmark, Finland,
ately priced clothing of this type. The clothing produced
France, the Federal Republic of Germany, Italy,
by the $100,000 project, Kwanza Clothing, which is
Japan, the Netherlands, Norway, Sweden, Switzerland,
being financed by the sponsors' equity and a loan from
the United Kingdom, and the United States. Brazil,
Barclays Bank, will replace a small portion of Kenya's
India, and Israel have agreed to provide APDF with
current clothing imports.
technical assistance.
The mandate for the first phase of APDF's opera-
Sudan
tions expired in June 1990. In February 1990 APDF's
The sponsor of the Mistika Engineering Company plans
donors approved a five-year extension, as well as the
to set up an engineering workshop for comprehensive
maintenance of diesel engines. The primary market will
expansion, of APDF's operations through 1995. APDF
be heavy transport vehicles. Project costs are estimated at
opened a new office in Harare, Zimbabwe in early
$1 million. Two banks, the Sudan Rural Development
FY91.
Corporation and the Industrial Bank of Sudan, have ap-
In 1989 APDF provided advisory services to 24
proved medium-term loans to the project. A loan from
projects in nine countries and helped them obtain
Sudan Development Corporation is pending, subject to
financing. These projects, which represent total invest-
formal ratification. APDF helped raise $600,000 of the
ments of $51 million, will help create about 1,700 jobs
financing required.
at a relatively low cost per job. They bring the total
number of projects assisted by APDF to 53, and the
Zambia
number of jobs created to 3,600.
In a $500,000 project, Siaza Industrial Limited is estab-
Over the past four years APDF's field offices in
lishing a continuous casting facility to produce copper
alloy billets for export to European clients identified with
Abidjan and Nairobi have received more than 1,600
APDF's help. Equity provided by the sponsor will cover
project proposals. At a time when many countries
49 percent of the total finance required by the project,
are making policy adjustments to encourage private
and the Development Bank of Zambia is providing a
sector activity, APDF is helping Africa's entrepreneurs
loan. Technicians have been trained overseas. Trial pro-
to take advantages of these changes.
duction began in September 1989.
40
AFRICAN MANAGEMENT SERVICES
African managers. To this end, AMSCo will provide
COMPANY
management training programs for African nationals.
ADB, UNDP, and the Governments of Belgium, Italy,
A shortage of well-trained and experienced man-
the Netherlands, Sweden, and Switzerland have con-
agers in Africa is thought to be, in part, responsible for
tributed to a $7 million training fund to support these
the weaknesses of many private African companies and
programs.
the sluggishness of privatization efforts in the region.
During FY90, AMSCo recruited its two operations
IFC launched the African Management Services
directors and training manager. To make the company
Company (AMSCo) in April 1989, in collaboration
known, AMSCo's staff travelled extensively throughout
with UNDP and the African Development Bank
Africa, making presentations to business groups, banks,
(ADB), to address this problem.
and government agencies. AMSCo now has a substan-
AMSCo, which is being implemented as part of
tial pipeline of potential projects and has entered into its
a UNDP project, represents a novel formula bringing
first contract, to help a Senegalese dairy operation im-
together public-sector funding and private-sector
prove its management. AMSCo expects to sign five or
investment and management expertise. AMSCo B.V.
six contracts in the near future. Demand for AMSCo's
has been incorporated in Amsterdam as a Dutch com-
services has been heavy; however, AMSCo is not ex-
pany. About 70 percent of its shares are held by IFC
pected to become self-sustaining for another two years.
and other financial institutions, including ADB, the
Danish Industrialization Fund for Developing
CARIBBEAN PROJECT
Countries (IFU), the Finnish Fund for Industrial
DEVELOPMENT FACILITY
Development Cooperation (FINNFUND), France's
Caisse Centrale de Coopération Economique, the
The Caribbean Project Development Facility
Netherlands' Finance Company for Developing
(CPDF) helps entrepreneurs in the Caribbean region
Countries (FMO), the Development Bank of Portugal
secure debt and equity finance for new or expanding
(BFN), the Swedish Fund for Industrial Cooperation
businesses. In July 1989 CPDF expanded the scope
with Developing Countries (SWEDFUND), and the
of its services, making them available to enterprises
United Kingdom's Commonwealth Development
in Costa Rica, Guatemala, El Salvador, Honduras,
Corporation (CDC). The remainder of AMSCo's
Nicaragua, and Panama, and bringing the total number
shares are held by more than 50 international private
of countries and territories it serves to 27.
companies from 20 industrialized and developing
countries. These companies, which are all members
of the Industry Council for Development Services
The San Isidro Free Trade Zone in the Dominican Republic, which leases
(ICDS), will provide personnel and training to African
factory shells to foreign companies for the assembly of data processing and
companies in accordance with AMSCo's mandate.
electrical components, is expanding with the help of CPDF and a $6 million
loan from IFC.
Dr. Carl L. Angst is the first Chairman of AMSCo's
Supervisory Committee, and Mr. Tener Eckelberry,
AMSCo's first President.
AMSCo will fill senior positions at African client
companies with executives primarily from its private-
sector shareholders. With its services paid for by clients,
AMSCo is designed to be a commercial, self-sustaining
venture. However, AMSCo will have at its disposal a
$7 million fund from which it can partially finance
management contracts for clients unable to carry the
full cost of its services initially. The Governments of
Belgium, Denmark, Finland, the Federal Republic of
Germany, the Netherlands, Portugal, the United King-
dom, and the United States will contribute to this fund.
AMSCo's primary objective is to promote profit-
able and competitive companies that are locally man-
aged. When the executives provided by AMSCo have
completed their terms, they will be succeeded by
41
In 1989 CPDF opened an Eastern Caribbean
ten ventures are estimated at $46 million. In addition,
Regional Office in Barbados, which will enable it to
a total of $665 million in loans for energy development
increase its support to businesses facing special chal-
projects has been approved under the program; of this,
lenges in the relatively small and isolated economies of
$380 million was for IFC's own account, and $285 mil-
the Leeward and Windward Islands. CPDF also en-
lion was syndicated with commercial banks.
tered into formal arrangements with local institutions
in several larger countries, for example the Investment
Promotion Council in the Dominican Republic and
Exploration
the Foundation for Investments and Development of
Exports in Honduras, to provide promotional and
The first oil discovery in an IFC exploration ven-
logistical functions on its own behalf.
ture has recently been made. In the Chirete-Olleros
CPDF's financial base was strengthened substan-
venture in Argentina, approved by the Board in FY87,
tially during the year. USAID and the Governments of
a well drilled in the Olleros block produced about 800
Japan and the Netherlands joined CPDF's previous
barrels of oil per day during testing; an appraisal pro-
donors-IDB, IFC, UNDP, and government agencies
gram will soon be carried out to determine whether the
in Canada, the Federal Republic of Germany, and the
discovery is commercial. In the same venture, a deep
United Kingdom-in committing funding for CPDF's
well was drilled in the Chirete block. Encouraging oil
operations. CPDF has now almost met its funding
shows were encountered during drilling, but the well
had to be abandoned for mechanical reasons. There is
requirements for the five-year period 1988-92.
During 1989 CPDF worked on nine new project
a plan to drill a replacement well into the same struc-
ture in the near future.
proposals with total costs of over $83 million. Since its
inception in 1981, CPDF has secured finance for a total
In FY90 IFC's Board approved two further oil
of 52 projects with costs of nearly $120 million.
exploration ventures, bringing the total number of
exploration projects in which IFC is currently involved
to five. An oil exploration venture in Guinea-Bissau
-IFC's first project in that country-is being under-
ENERGY PROGRAM
taken offshore in the Anetibene block in partnership
with Shell Pecten, the project operator, and Walter
IFC's energy program originated in the Five Year
International Inc., an independent U.S. oil company.
Plan approved by the Board in 1984. The program's
IFC is taking a 15 percent interest in the venture.
primary objective is to contribute to the energy supply
The Board also approved an equity investment in the
of developing countries by encouraging oil companies
Raja-Pendopo petroleum exploration project in South
to expand their activities in these countries. To date,
Sumatra, Indonesia. IFC's partners in this project are
the Board has approved eleven investments in nine
two independent U.S. oil companies, Union Pacific
pure exploration ventures, as well as two equity invest-
Resources Co. and Enron Oil and Gas Company, and
ments in oil exploration and development in the
P.T. Kodel, a leading indigenous company undertaking
Meleiha venture in Egypt; total disbursements in the
its first oil exploration venture.
FY90 Project Approvals: Energy
(US$ millions)
Gross
Project
Company
Country
Activity
Investment
Cost
Hidra Oil Development
Argentina
Development
30.00
30.00
Oleoducto de Colombia, S.A.
Colombia
Development
70.00
321.00
Anetibene Petroleum Exploration Program
Guinea-Bissau
Exploration
5.85
39.00
Raja-Pendopo Petroleum Exploration Project
Indonesia
Exploration
3.60
32.60
Total
109.45
422.60
42
Development
The Meleiha Exploration and Development
Venture
During FY90 IFC approved two loans to energy
development projects. A loan of $70 million was
IFC made its first equity investment in the Meleiha
approved for Oleoducto de Colombia, a $321 million
exploration and development venture in 1986, and its
second investment a year later. To date, IFC has invested
project to construct a 476-kilometer crude oil pipeline.
about $30 million in the venture and received approxi-
The pipeline is expected to increase production and
mately $14 million in revenues. The Corporation expects
export of crude oil from Colombia's two major oil-
to recover its investment in full by 1994; the venture is
producing areas-the Llanos region and the Magdalena
expected to generate cash flow for at least 10 years be-
Valley. Half of the loan is for IFC's own account; the
yond that. When IFC entered the venture, oil reserves
other half will be syndicated among seven commercial
were estimated to be 50 million barrels. New reserves
banks. IFC also approved its second investment in the
were subsequently discovered, and proven reserves now
Hidra project, the first commercial development of an
stand at 80 million barrels. Ultimate recovery is expected
offshore oil-field in Argentina. IFC will provide a
to be in excess of 100 million barrels. The field is cur-
standby loan of $20 million to the project's three main
rently producing about 17,000 barrels of oil daily. Water
shareholders and increase the syndicated portion of
is being injected into the reservoir to increase the per-
its original loan by $10 million. The Hidra project is
centage of oil recovered, and production could reach
20,000 barrels per day by 1992.
currently producing about 28,000 barrels of crude oil
Current production is from the shallower reservoirs in
per day.
the Meleiha area. A discovery well drilled into deeper
reservoirs has indicated the presence of hydrocarbons,
primarily gas, possibly in significant volumes. There is no
gas market in the vicinity, but discussions are under way
about establishing a gas-gathering system for several
blocks in the Western Desert and linking this system by
pipeline to the national gas grid.
The Meleiha venture has added reserves to Egypt's
energy sector and continues to generate substantial reve-
nues for the Egyptian economy. The project has consid-
erable potential for further development, and may make
Wahome Steel Ltd., a Ghanaian company, will use IFC financing to build
an important contribution to Egypt's emerging natural
a plant for the production of reinforcement bars, wire rods, wire, and other steel
gas industry.
products.
43
THE FOREIGN INVESTMENT
ADVISORY SERVICE
FIAS Activities in Eastern Europe
Eastern European countries are opening up their
The Foreign Investment Advisory Service (FIAS),
economies to foreign investment and, at the same time,
which is jointly operated by IFC and MIGA, provides
initiating privatization on a massive scale. Centrally
advice to the governments of member countries seek-
planned, subsidized, and protected units are being con-
ing to develop policies and programs that will enable
verted to private companies that must compete in export
markets as well as in more open home markets, without
them to attract foreign direct investment. To date,
subsidies. Foreign direct investment (FDI) has a major
FIAS's work has been heavily concentrated in Asia
role to play in this process because many major industrial
and sub-Saharan Africa. However, during FY90 its
and financial enterprises in Eastern Europe need the
efforts to achieve greater geographical diversity were
management, technology, marketing skills, and risk cap-
successful. FIAS worked in 20 countries in all, and
ital that FDI can bring. FDI can speed up the privatiza-
completed 17 advisory projects, two of which were in
tion process. It can also make it less costly in terms of
Eastern Europe. It also identified new projects in
unemployment, bankruptcies, and wasted resources, and
Egypt, Saudi Arabia, and the Republic of Yemen.
more effective in increasing productivity and real
As in past years, the type of advice provided
incomes.
by FIAS in FY90 varied widely. FIAS identified gen-
FIAS is working with governments in the region to
find ways to motivate and channel foreign investment to
eral investment policy issues for the Governments of
help in this momentous transformation. In addition to
Bangladesh, Cameroon, Lesotho, Pakistan, Poland,
providing them with informal advice, it has studied, and
and Uganda. It helped several countries, including
made recommendations on, a number of issues:
Cameroon, Madagascar, and Uganda, to review or
Poland
restructure their investment codes; it also helped Kenya
to develop a comprehensive investment policy state-
Changing the foreign investment law to reduce
government involvement in business decisions, im-
ment that will serve as the basis for revising specific laws
prove access of FDI to foreign exchange, revise
and policies. It reviewed investment incentives in
procedures for resolution of disputes, and expand
Hungary and the ASEAN countries. FIAS also helped
legal coverage to regulate FDI in privatization.
several countries, including Indonesia, Lesotho,
Revising tax regulations to provide more effective
Morocco, and Togo, develop investment-promotion
incentives.
strategies. It made recommendations to the Govern-
Restructuring and strengthening the Foreign In-
ments of Bangladesh, Lesotho, Poland, and Uganda in
vestment Agency, and improving its ability to pro-
connection with creating investment institutions or
mote Poland as a site for FDI.
improving the structure and functioning of existing
Hungary
ones. FIAS helped the Philippines to improve its for-
Restructuring and re-targeting tax incentives.
eign-investment data base, and worked with the Gov-
Identifying which public enterprises should be al-
ernment of Hungary on measures to facilitate foreign
lowed to proceed on their own with "spontane-
investment in the privatization process.
ous" privatization, and which should be more
In addition to its advisory work, FIAS organizes
closely controlled; improving the regulations gov-
conferences and prepares studies on issues related to
erning spontaneous privatization; and assuring a
competitive and open process for involving foreign
foreign direct investment. In FY90, with UNDP's sup-
investors in the privatization of the most important
port, FIAS sponsored a major conference on the pro-
enterprises.
motion of foreign investment in sub-Saharan Africa,
Overhauling the screening process for FDI.
which attracted over 40 speakers and more than 200
participants. FIAS also completed two research projects
growing out of its advisory work. One identified the
characteristics of screening and monitoring institutions
that facilitate the flow of productive investment. The
other identified programs in OECD countries that
promote investment by domestic firms in developing
countries; these programs can be tapped by developing
countries seeking to attract more foreign investment.
FIAS also began to review investment policy issues in
44 the South Pacific islands during the year.
FIAS's operating costs were covered by contribu-
feasibility studies, training programs, and short-term
tions from UNDP, IFC, and MIGA; its own trust fund;
management support, the TA funds enable IFC to
and fees charged to clients. During FY90 contributions
develop promising project proposals into bankable
to the trust fund were received from France, Japan, the
ventures, and to rehabilitate projects in difficulty both
Netherlands, Switzerland, and the United Kingdom;
within and outside its portfolio. IFC expects to mobi-
new commitments to provide funding over several
lize additional resources from other countries to set up
years were also made by France, Switzerland, and
similar TA funds in the future.
the United Kingdom. USAID committed funding for
During FY90 IFC supported 22 technical assis-
several years to support FIAS's work in sub-Saharan
tance projects, described in the box on p. 46, involving
Africa.
co-financing of $2 million from the trust funds. The
funds have supported a total of 37 projects since the TA
program began, several of which have been successfully
SOUTH PACIFIC PROJECT FACILITY
completed: the creation of a facility to prepare viable
projects in the South Pacific island countries (the South
During FY90, IFC's Board of Directors approved
Pacific Project Facility-SPPF); a fishery/fish processing
the establishment of the South Pacific Project Facility
project in Senegal; a pilot metallurgical operation in
(SPPF), modeled on the Africa and Caribbean Project
Peru to refine silver concentrate into dore bars; and
Development Facilities, to assist in the development of
feasibility studies for a poplin fabric plant in Tunisia and
small and medium-size private enterprises in the South
sewing-thread operation in Egypt.
Pacific island countries. Average project size is expected
As part of its continuing efforts to promote the
to be around $1 million. IFC will manage SPPF and
transfer of emerging technologies, IFC is considering
provide partial funding to cover operating expenses.
an investment in a project in Argentina involving the
Other funding will be provided by various donor
commercial application of satellite telecommunication
countries and multilateral development institutions.
technology. IFC is also developing a small biotechnol-
SPPF will begin operations in August 1990, for an
ogy project involving transfer of U.S. know-how to
initial period of five years.
Cameroon to provide medical test kits for household
use.
TECHNICAL ASSISTANCE
AND TECHNOLOGY SERVICE
Technology Service
In FY90 IFC's Engineering Department continued
Technical Assistance
to develop its Technology Service, which helps busi-
nesses in member countries with the identification,
IFC seeks to contribute to the success of private
evaluation, selection, and acquisition of technologies.
enterprises in the developing world by providing them
It has established a bank of information on sources of
with technical assistance to ensure that they are finan-
new and established technologies in Europe, North
cially, managerially, and technologically sound. IFC's
America, and elsewhere.
Technical Assistance (TA) Trust Funds Program,
The Technology Service has assisted companies in
which grew out of IFC's collaborative efforts with the
a number of developing member countries, including
EC and bilateral agencies in several countries-Canada,
Chile, India, Indonesia, Kenya, Mexico, and Pakistan,
Italy, the Netherlands, Sweden, Switzerland, and the
wishing to update their process technologies, or seek-
United States-continued to expand in FY90. Total
ing new products, processes, and business activities. For
contributions to the TA funds reached $8.5 million.
example, it prepared a study for an agribusiness com-
Two new TA funds were set up with the Governments
pany in India comparing the technologies and business
of Finland and Japan, and existing funds were replen-
potential of by-products that could be produced by
ished by new funding from the Governments of
biotechnological processes from a material that might
Canada, Japan, and the Netherlands. The TA funds
otherwise be underutilized or treated as waste. It
complement UNDP's $1 million Investment Feasibili-
conducted a search in Brazil for a company interested
ty Study Facility, which is used mainly by IFC.
in manufacturing a computer developed by a
By financing services such as sector studies, pilot
Scandinavian firm. Help has been provided to busi-
operations for new technologies, pre-feasibility and
nesses in fields as diverse as electronics, ceramics,
45
Nature of Activity
Technical Assistance Projects
Country
Sector Study
— -Fabrication and export of leather goods
Bangladesh
-
-Textiles
Global
Project Identification/
- Poplin fabric production
Tunisia
Linking of Partners
Mangoro pulpwood export
Madagascar
-Africa/EC integrated trucking operation
Morocco
- -Production of raw silk
Thailand
— -Multi-phase study to identify investment
Phase -Turkey,
opportunities in selected countries for IFC
Mexico, Thailand
and foreign and local sponsors in projects
Phase 2-Malaysia,
providing environmental goods and services
Poland, Pakistan,
Chile
Phase 3-Indonesia,
Hungary
Feasibility Study
-Compressed natural gas application
for commercial vehicles
Bolivia
-Leasing company
Bolivia
- Integrated poultry project
Cameroon
- Soft drinks project
Indonesia
-
Porcelain/ceramic tableware project
Indonesia
- Complete systems manufacture and assembly
Portugal
line, services, training
- Silk production project
Thailand
- -Environmental impact of polystyrene project
Tunisia
— -Venture capital fund
Zimbabwe
Pilot Plant
— Paddy straw mushroom growing
Indonesia
Project Rehabilitation
- -Nickel mining project
Philippines
-Fishery/fish processing project
Uruguay
Promotional/Technology
-Biotechnology (medical test kits)
Cameroon
Transfer/Technical
- Follow-up seminars on global
Global
Assistance
automotive study (Brazil, India, Mexico)
-Pollution control
Poland
- Fish processing operation
Senegal
foundry technology, environmental engineering,
The Technology Service is also offered to companies
paper and packaging, computer software, instrument
in industrialized countries that have technologies with
engineering, fruit juices, plastics, mushrooms, wood
applications in developing countries. IFC's knowledge of
products, and metal-waste processing.
business conditions in the developing world can help these
Many developing countries need state-of-the-art
companies locate potential partners and opportunities.
technologies in the processing and preservation of food,
The Technology Service's activities may lead, in
both to improve domestic distribution and to gain
certain cases, to investment projects for IFC. However,
access to export markets. The Service is reviewing the
this is not a condition for assistance from the Service,
commercial and technical characteristics of a range of
which is available on a fee-paying basis to private busi-
alternative process technologies.
nesses in member countries.
46
PERSONNEL
mission in Islamabad that will cover business activities
MANAGEMENT AND
in both Pakistan and Bangladesh. C. John Pott was
named Regional Representative in Islamabad. Early in
ADMINISTRATION
FY91, IFC opened a resident mission in Sao Paulo,
Brazil, and regional missions in Douala, Cameroon and
IFC's institutional growth and the expansion of its
Harare, Zimbabwe, bringing the total number of IFC
advisory operations over the past few years led to the
missions in the developing world to 14. IFC also main-
creation of two new departments in FY90-the first
tains offices in London, Paris, and Tokyo, as well as a
major changes at the department level since 1985. A
promotional office in Vienna, Austria that covers East-
Controller's and Business Planning Department was
ern Europe. The Africa Project Development Facility
formed in December 1989 in connection with a
(APDF) opened a new office in Harare, Zimbabwe in
realignment of the functions reporting to the Vice
July 1990. IFC's new South Pacific Project Facility
President of Finance and Planning. Jean-Philippe
(SPPF), approved by the Board in FY90, will begin
Halphen became the Department's first Director. Also
operations early in FY91.
in December 1989, René Karsenti joined IFC from the
To meet the need for increased staffing created by
World Bank as Director of the Treasury and Financial
the growth of IFC's business, the Personnel Office has
Policy Department, which replaced the Finance and
stepped up its recruitment and staff development ac-
Budgeting Department. Mr. Karsenti succeeded
tivities. IFC has traditionally sought to recruit profes-
Eduardo Costa, who resigned as Director of Finance
sional staff in mid-career, typically from the private
and Budgeting to return to the private sector in his
sector, who have an established record of achievement
native Portugal. After a year of developing its corporate
and experience, are challenged by the Corporation's
restructuring and privatization services into a solid line
work, and wish to contribute to it. IFC has recently
of business, IFC's Corporate Finance Services Group
developed a recruitment program aimed at younger
became a full department in January 1990. Edward A.
candidates with exceptional potential. In FY89 and
Nassim was appointed the Department's first director,
FY90, IFC conducted on-campus interviews with
following the departure to the U.S. private sector of
MBA students in their last year at leading graduate
Peter C. Jones, who was head of Corporate Finance
schools of business in Europe and North America:
Services during its start-up phase.
Bocconi, Chicago, Harvard, IMD (Lausanne),
At the end of the fiscal year, IFC senior manage-
INSEAD (Paris), Kellogg School (Northwestern
ment announced a further change in organizational
University), London, Rotterdam School (Erasmus
structure, which went into effect on July 1, 1990.
University), Sloan School (M.I.T.), Stanford, and the
A new investment department covering the Middle
Wharton School (University of Pennsylvania). This
East and North Africa was established, and André
program will be expanded in FY91, and IFC will also
Hovaguimian, formerly Director, Department of
continue to hire graduates of the World Bank Group's
Investments, Africa I, was appointed its first director.
Young Professionals Program.
Philippe Liétard was promoted to succeed Mr.
At the same time, IFC is striving to improve its
Hovaguimian as Director, Africa I. Douglas Gustafson
competitive position through efforts to develop and
remains Director, Department of Investments, Europe.
reward experienced staff. It is expanding its training
There were several other senior management
program and offering courses on innovations in
changes during the fiscal year. Daniel F. Adams, who
business management, corporate finance, project eco-
had been Vice President of Portfolio Operations before
nomics, and other areas of interest, as well as in com-
resigning in FY88 to pursue private business interests,
munications and information technology. IFC has also
returned to IFC in March 1990 as Director of the
strengthened its staff performance review procedures.
Capital Markets Department, succeeding Charles O.
IFC's staff is internationally diverse, including
Sethness. Walter F. Norris, Deputy General Counsel,
nationals from nearly 70 countries of which more than
retired at the end of the year, and was succeeded by
50 are classified as developing. At the end of FY90
Daoud L. Khairallah. A new position, Special Adviser
there were 595 regular staff on IFC's payroll, compared
to the Vice President of Investment Operations, was
with 541 on June 30, 1989. A total of 765 staff mem-
established. It was filled by Ducksoo Lee, who joined
bers were employed by IFC at the end of the fiscal year,
IFC from the World Bank on July 1, 1990.
including long-term consultants and temporary staff;
IFC is undertaking a major expansion of its resident
staff in IFC's overseas missions, who are generally na-
and regional missions. In FY90, IFC opened a regional
tionals of the host countries; and other specialized staff. 47
More than 37 percent of IFC's managers, and 45 per-
Department. He held progressively more senior posi-
cent of higher-level staff, are from developing coun-
tions in the World Bank and IFC and became Manager
tries. Women currently occupy 67, or 17 percent, of
of the Portfolio Operations Support Unit in 1987, the
the higher-level staff positions.
post he held at the time of his death. Mr. Dodd, who
During the year, IFC mourned the deaths of John
joined IFC as an engineer in 1957, was instrumental in
W. Lowe and J. David Dodd. Mr. Lowe joined IFC in
setting up IFC's Engineering Department in 1964 and
1975 as an investment officer in the Capital Markets
served as the Department's first director.
48
FINANCIAL STATEMENTS
International Finance Corporation
Annual Report 1990
Balance Sheet
50
Statement of Income
51
Statement of Cash Flows
52
Statement of Capital Stock
and Voting Power
53
Notes to Financial Statements
54
Report of Independent Accountants
58
49
International Finance Corporation
Balance Sheet
Exhibit A
June 30, 1990 and June 30, 1989
In thousands of United States dollars-See Notes to Financial Statements, Exhibit E
1990
1989
ASSETS
Cash, deposits and securities-Note B
$2,162,898
$1,313,404
Receivables and other assets-Note C
151,129
146,437
Loan and equity investments disbursed and outstanding-Note D
Loan investments
3,018,930
2,320,267
Equity investments
570,096
472,454
Total investments
3,589,026
2,792,721
Less: Reserve against losses
(319,300)
(257,927)
3,269,726
2,534,794
Net receivable on currency swaps-Note G
25,680
11,465
TOTAL ASSETS
$5,609,433
$4,006,100
LIABILITIES AND EQUITY
Liabilities:
Payables and other liabilities-Note F
$ 115,955
$ 79,253
Borrowings withdrawn and outstanding-Note G
From market sources
2,670,281
1,560,703
From International Bank for Reconstruction and Development
909,293
694,503
Total borrowings
3,579,574
2,255,206
Net payable on currency swaps-Note G.
7,845
56,402
Deferred income
41,969
32,592
Total Liabilities
3,745,343
2,423,453
Capital and Accumulated Earnings:
Capital stock, authorized 1,300,000 shares
of $1,000 par value each-Note H
Subscribed
$1,162,427
$1,112,817
Less: Portion not yet paid
(90,101)
(164,915)
1,072,326
947,902
Payment on account of pending subscription
67
67
Accumulated earnings
791,697
634,678
Total Equity
1,864,090
1,582,647
TOTAL LIABILITIES AND EQUITY
$5,609,433
$4,006,100
50
International Finance Corporation
Statement of Income
Exhibit B
For the fiscal years ended June 30, 1990 and June 30, 1989
In thousands of United States dollars-See Notes to Financial Statements, Exhibit E
1990
1989
INCOME
Income from loan and equity investments:
Interest and financial fees-Note I
$297,083
$244,357
Dividends and profit participations
30,724
30,830
Capital gains on equity sales
90,707
118,616
Service fees
16,777
25,303
Income from deposits and securities
142,218
101,517
Translation gains (losses) net
6,961
(1,554)
Other income (losses)
403
(574)
TOTAL INCOME
584,873
518,495
EXPENSES
Charges on borrowings
230,940
184,649
Administrative expenses
105,864
76,827
Provision for losses-Note D
90,550
59,635
Contribution to special programs-Note J
500
900
TOTAL EXPENSES
427,854
322,011
NET INCOME
$157,019
$196,484
51
International Finance Corporation
Statement of Cash Flows
Exhibit C
For the fiscal years ended June 30, 1990 and June 30, 1989
In thousands of United States dollars-See Notes to Financial Statements, Exhibit E
1990
1989
Cash flows from investing activities:
Loan and equity disbursements
$(1,001,437)
$ (870,045)
Loan repayments and equity redemptions
285,006
234,287
Sales of loans and equity investments at cost
67,666
36,328
Net cash used in investing activities
(648,765)
(599,430)
Cash flows from financing activities:
Draw-down of IBRD borrowings and new issues
1,207,626
502,792
Repayments on borrowings
(92,352)
(184,723)
Capital subscription payments
124,424
97,680
Net cash provided by financing activities
1,239,698
415,749
Cash flows from operating activities:
Net income
157,019
196,484
Adjustments to reconcile net income to net cash provided by operating
activities:
Provision for losses
90,550
59,635
Translation (gains) losses
(6,961)
1,554
Increases in accrued income on loans, deposits and securities
(12,820)
(26,627)
Increase in payables and other liabilities
29,445
27,267
Increase in receivables and other assets
(10,192)
(30,447)
Net cash provided by operating activities
247,041
227,866
Increase in cash, deposits and securities
837,974
44,185
Effect of exchange rate changes on cash, deposits and securities
11,520
(8,983)
Net increase in cash, deposits and securities
849,494
35,202
Cash, deposits and securities at beginning of period.
1,313,404
1,278,202
Cash, deposits and securities at end of period
$2,162,898
$1,313,404
Supplemental disclosure of non cash activities:
Increase (decrease) resulting from exchange rate fluctuation:
Loans outstanding
131,949
(60,398)
Borrowings and swap activities
143,513
(65,732)
52
International Finance Corporation
Statement of Capital Stock and Voting Power
Exhibit D
June 30, 1990 and June 30, 1989
In thousands of United States dollars
Capital Stock
Voting Power
Capital Stock
Voting Power
Amount
Percent
Number
Percent
Amount
Percent
Number
Percent
Members
Paid
of Total
of Votes
of Total
Members
Paid
of Total
of Votes
of Total
Afghanistan
$ 111
.01
361
.03
Liberia
$
83
.01
333
.03
Angola
837
.08
1,087
.10
Libya
55
*
305
.03
Antigua and Barbuda
13
*
263
.02
Luxembourg
1,209
.11
1,459
.13
Argentina
19,205
1.79
19,455
1.76
Madagascar
111
.01
361
.03
Australia
26,751
2.49
27,001
2.44
Malawi
853
.08
1,103
.10
Austria
9,943
.93
10,193
.92
Malaysia
7,668
.72
7,918
.72
Bahamas, The
142
.01
392
.04
Maldives
9
*
259
.02
Bangladesh
4,552
.42
4,802
.43
Mali
116
.01
366
.03
Barbados
182
.02
432
.04
Mauritania
55
*
305
.03
Belgium
27,446
2.56
27,696
2.50
Mauritius
736
.07
986
.09
Belize
50
300
.03
Mexico
10,306
.96
10,556
.95
Benin
67
.01
317
.03
Morocco
4,552
.42
4,802
.43
Bolivia
958
.09
1,208
.11
Mozambique
182
.02
432
.04
Botswana
64
.01
314
.03
Myanmar
666
.06
916
.08
Brazil
19,885
1.85
20,135
1.82
Nepal
306
.03
556
.05
Burkina Faso
432
.04
682
.06
Netherlands
31,726
2.96
31,976
2.89
Burundi
100
.01
350
.03
New Zealand
1,583
.15
1,833
.17
Cameroon
885
.08
1,135
.10
Nicaragua
184
.02
434
.04
Canada
45,976
4.29
46,226
4.18
Niger
131
.01
381
.03
Cape Verde
11
261
.02
Nigeria
10,900
1.02
11,150
1.01
Chile
4,552
.42
4,802
.43
Norway
9,947
.93
10,197
.92
China
8,122
.76
8,372
.76
Oman
671
.06
921
.08
Colombia
4,571
.43
4,821
.44
Pakistan
8,626
.80
8,876
.80
Congo, People's Republic of the
131
.01
381
.03
Panama
426
.04
676
.06
Costa Rica
420
.04
670
.06
Papua New Guinea
490
.05
740
.07
Côte d'Ivoire
1,349
.13
1,599
.14
Paraguay
270
.03
520
.05
Cyprus
1,209
.11
1,459
.13
Peru
1,777
.17
2,027
.18
Denmark
10,487
.98
10,737
.97
Philippines
3,247
.30
3,497
.32
Djibouti
21
271
.03
Poland
4,090
.38
4,340
.39
Dominica
22
*
272
.03
Portugal.
4,705
.44
4,955
.45
Dominican Republic
598
.06
848
.08
Rwanda,
306
.03
556
.05
Ecuador
1,479
.14
1,729
.16
St. Lucia
37
*
287
.03
Egypt, Arab Republic of
6,855
.64
7,105
.64
Saudi Arabia
14,447
1.35
14,697
1.33
El Salvador
11
261
.02
Senegal
1,106
.10
1,356
.12
Ethiopia
33
*
283
.03
Seychelles
15
265
.02
Fiji
108
.01
358
.03
Sierra Leone
83
.01
333
.03
Finland
8,872
.83
9,122
.83
Singapore
177
.02
427
.04
France
68,400
6.38
68,650
6.21
Solomon Islands
19
*
269
.02
Gabon
931
.09
1,181
.11
Somalia
83
.01
333
.03
Gambia, The
35
285
.03
South Africa
9,014
.84
9,264
.84
Germany, Federal Republic of
72,861
6.80
73,111
6.61
Spain
13,175
1.23
13,425
1.21
Ghana
2,242
.21
2,492
.23
Sri Lanka
3,594
.34
3,844
.35
Greece
3,051
.29
3,301
.30
Sudan
111
.01
361
.03
Grenada
46
*
296
.03
Swaziland
404
.04
654
.06
Guatemala
598
.06
848
.08
Sweden
13,539
1.26
13,789
1.25
Guinea
294
.03
544
.05
Syrian Arab Republic
72
.01
322
.03
Guinea-Bissau
18
*
268
.02
Tanzania
724
.07
974
.09
Guyana
406
.04
656
.06
Thailand
5,510
.51
5,760
.52
Haiti
306
.03
556
.05
Togo
808
.07
1,058
.10
Honduras
184
.02
434
.04
Tonga
13
*
263
.02
Hungary
5,216
.49
5,466
.49
Trinidad and Tobago
1,818
.17
2,068
.19
Iceland
11
261
.02
Tunisia
1,795
.17
2,045
.19
India
45,976
4.29
46,226
4.18
Turkey
5,985
.56
6,235
.56
Indonesia
16,131
1.50
16,381
1.48
Uganda
735
.07
985
.09
Iran, Islamic Republic of
372
.04
622
.06
United Arab Emirates
1,838
.17
2,088
.19
Iraq
147
.01
397
.04
United Kingdom
68,400
6.38
68,650
6.21
Ireland
729
.07
979
.09
United States.
231,429
21.58
231,679
20.95
Israel
1,076
.10
1,326
.12
Uruguay
1,797
.17
2,047
.19
Italy
41,942
3.91
42,192
3.81
Vanuatu
55
*
305
.03
Jamaica
2,157
.20
2,407
.22
Venezuela
15,593
1.45
15,843
1.43
Japan
79,794
7.44
80,044
7.24
Viet Nam
166
.01
416
.04
Jordan
735
.07
985
.09
Western Samoa
20
270
.02
Kenya
1,529
.14
1,779
.16
Yemen Arab Republic
360
.03
610
.06
Kiribati
7
257
.02
Yugoslavia
4,169
.39
4,419
.40
Korea, Republic of
9,013
.84
9,263
.84
Zaire
2,159
.20
2,409
.22
Kuwait
4,533
.42
4,783
.43
Zambia
1,286
.12
1,536
.14
Lebanon
50
300
.03
Zimbabwe
546
.05
796
.07
Lesotho
18
268
.02
Total June 30, 1990
$1,072,326
100.00t
1,106,076
100.00t
Total June 30, 1989
$ 947,902
100.00t
981,152
100.00t
*
Less than .005 percent.
t May differ from the sum of the individual percentages shown because of rounding.
# On May 22, 1990, the Yemen Arab Republic and the People's Democratic Republic of Yemen merged into a single state, the Republic of Yemen. Effective July 13, 1990,
53
the Republic of Yemen is substituted for the Yemen Arab Republic in the Corporation's records.
International Finance Corporation
Notes to Financial Statements
June 30, 1990 and June 30, 1989
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING AND RELATED POLICIES
The accounting and reporting policies of the Corporation conform to generally accepted accounting principles in the United States and International
Accounting Standards. The Corporation carries its assets and liabilities principally on the historical cost basis and follows the accrual method of account-
ing except where noted otherwise.
The significant accounting policies are summarized as follows:
Financial Statement Presentation-Certain amounts in the prior year have been reclassified to conform to the current year's presentation.
Translation of Currencies-All assets and liabilities not denominated in United States dollars, with the exception of equity investments, are expressed
in United States dollars at the approximate exchange rates prevailing at June 30, 1990 and 1989. Equity investments disbursed in currencies other than
United States dollars are expressed in United States dollars at the exchange rates which applied at the time of disbursement. Translation gains and losses
are credited or charged to income.
Investments-Investments are recorded at the date investment commitments are signed by the Corporation and are reflected as assets when dis-
bursed. Loan investments are generally reported as the principal amounts outstanding. Equity investments are carried at cost. Guarantees extended by
the Corporation assuring payment of principal and interest on debt issuances on behalf of commercial enterprises and other exposures relating to various
contractual arrangements are not reflected in the balance sheet until such time as the guarantee is called.
Reserve Against Losses-The reserve against losses represents management's judgement as to identifiable losses on specific investments with a
significant and relatively permanent decline in value and an estimate of potential losses not specifically provided for. The reserve is established through
annual charges to income in the form of provision for losses on investments. Investments written off, as well as any subsequent recoveries, are recorded
through the reserve.
Revenue Recognition-Dividends and profit participations are recorded as income when received in freely convertible currencies. Gains on sales of
investments are measured against the average cost of the investments sold and are credited to income when received in freely convertible currencies.
Interest and commitment fees are recorded as income on an accrual basis. All other fees are recorded as income when received. The Corporation
does not recognize income on loans where collectibility is in doubt or payments of interest or principal are past due more than sixty days unless man-
agement anticipates that collection will occur in the near future. Any interest which has been accrued on a loan placed in nonaccrual status is reversed
out of the current income. Interest on nonaccrual loans is thereafter recognized as income only when actual payment is received. When interest not pre-
viously recognized is capitalized as part of a debt restructuring, such interest is recorded as deferred income and credited to current income only when
the related principal maturity is received. Fees and costs associated with loan origination are recognized when incurred as the net of these amounts is
not material.
Deposits and Securities-Prior to June 30, 1990, deposits and securities were valued at cost, which approximated market. Commencing in the
current fiscal year, the Corporation's liquid assets are segregated into various pools which, at June 30, 1990, are valued at either cost or market depend-
ing on the purpose for which a particular pool is held. Gains and losses on sales of securities valued at cost are measured by the difference between
cost (on a last-in, first-out basis) and proceeds of the sales and are recorded as an element of income from deposits and securities.
Due to the nature of the deposits and securities held by the Corporation and its policies governing the level and use of such assets, the Corporation
classifies the deposits and securities portfolio as an element of liquidity in the Statement of Cash Flows.
Currency and Interest Rate Swaps-The Corporation enters into various currency and interest rate swap arrangements for its own asset/liability
management. Associated income or expenses are recognized over the life of the swap agreement as a component of charges on borrowings.
NOTE B-CASH, DEPOSITS AND SECURITIES
Cash, deposits and securities comprise the following:
At June 30
($ thousands)
1990
1989
Cash
$
23,209
$
17,099
Time deposits and other obligations
of banks and financial institutions
1,823,621
890,348
Government securities
316,068
405,957
Total cash, deposits and securities
$2,162,898
$1,313,404
At June 30, 1990, 40.7% of the deposits and securities portfolio was valued at market. This gave rise to an unrealized gain of approximately
$600,000 at June 30, 1990. The remainder of the portfolio was valued at cost, which was not significantly different from market. The securities and de-
posit portfolio is denominated primarily in United States dollars with instruments in nondollar currencies representing 7.9% of the portfolio.
NOTE C-RECEIVABLES AND OTHER ASSETS
Receivables and other assets of the Corporation are summarized below:
At June 30
($ thousands)
1990
1989
Receivable from sales of deposits and securities
$
123
$
123
Accrued income on deposits and securities
26,028
14,460
Receivable from purchasers of loan and equity investments
22,839
24,249
Accrued income on loans
61,438
54,444
Deferred charges
15,886
8,387
Other assets
24,815
44,774
Total receivables and other assets
$151,129
$146,437
54
Exhibit E
NOTE D-LOAN AND EQUITY INVESTMENTS AND RESERVE AGAINST LOSSES
Investments approved by the Board of Directors to be held by the Corporation but not signed as investment commitments, and commitments
signed but on which disbursements have not yet commenced are as follows:
At June 30
($ thousands)
1990
1989
Investments approved but not committed
Loans
$ 757,350
$ 310,560
Equities
108,610
82,900
865,960
393,460
Investments committed but not disbursed
Loans
1,048,978
1,151,891
Equities
114,017
100,038
1,162,995
1,251,929
Total approved but not disbursed
$2,028,955
$1,645,389
At June 30, 1990, 57% of the disbursed loan portfolio consisted of fixed rate loans, while the remaining loans were at variable rates.
At June 30, 1990, the currency compositions of loans disbursed are as follows ($ thousands):
US Dollars
$2,056,838
European Currency Unit
24,273
Deutsche Mark
654,089
Netherlands Guilders
16,009
Swiss Francs
160,613
Pounds Sterling
6,555
French Francs
55,336
Jamaican Dollars
1,115
Japanese Yen
44,102
Loans disbursed and outstanding are repayable as follows:
At June 30, 1990
($ thousands)
July 1, 1990 to June 30, 1991
$ 458,308
July 1, 1991 to June 30, 1992
431,689
July 1, 1992 to June 30, 1993
531,633
July 1, 1993 to June 30, 1994
431,582
July 1, 1994 to June 30, 1995
373,991
Thereafter
791,727
Total
$ 3,018,930
Loans on which the accrual of interest has been discontinued amounted to $156.0 million at June 30, 1990 ($174.9 million-1989). Interest income
not recognized in the current period on nonaccruing loans totaled $18.8 million ($17.2 million-1989). During the fiscal year ended June 30, 1990, the
Corporation collected $8.2 million ($11.5 million-1989) in interest on loans in nonaccrual status related to current and prior fiscal years.
The Corporation has also entered into commitments to issue guarantees totaling $114.0 million at June 30, 1990 ($118.3 million-1989) of which
$95.4 million ($83.6 million-1989) is outstanding.
Changes in the Reserve Against Losses are summarized as follows:
At June 30
($ thousands)
1990
1989
Balance at beginning of year
$257,927
$223,590
Investments written off
(34,872)
(25,449)
Investments recovered
5,695
151
Provision for losses
90,550
59,635
Balance at end of year
$319,300
$257,927
NOTE E-PARTICIPATIONS
The Corporation mobilizes funds from commercial banks and other financial institutions through loan participations. Participations are sold without
recourse to the Corporation. The Corporation administers and services such loan participations on behalf of its participants. The Corporation called and
disbursed $124.8 and $207.3 million of participants' funds during the fiscal year ended June 30, 1990 and 1989, respectively. At June 30, 1990 and
1989 undisbursed participants' commitments were $430.3 and $183.3 million, respectively. In addition, the Corporation has arranged to place with par-
ticipants $739.3 million of investments approved by the Board but not yet signed as commitments at June 30, 1990 ($121.8 million-1989).
55
International Finance Corporation
Notes to Financial Statements
continued
June 30, 1990 and June 30, 1989
NOTE F-PAYABLES AND OTHER LIABILITIES
Payables and other liabilities of the Corporation are summarized below:
At June 30
($ thousands)
1990
1989
Accounts payable and accrued expenses
$ 32,175
$26,407
Payable for purchase of deposits and securities
17
-
Accrued charges on borrowings
75,671
49,393
Other liabilities
8,092
3,453
Total payables and other liabilities
$115,955
$79,253
NOTE G-BORROWINGS
The Corporation's borrowings outstanding from market sources and currency swaps are summarized below:
Market Borrowings
Currency Swaps
Net Currency
Principal Amount
Weighted
Payable (Receivable)
Obligations
($ millions)
Average Cost
($ millions)
($ millions)
June 30
June 30
June 30
June 30
1990
1989
1990
1990
1989
1990
1989
US Dollars
$1,163
$ 657
8.82%
$1,161
$690
$2,324
$1,347
Deutsche Mark
174
148
6.53%
81
48
255
196
Japanese Yen
430
148
6.27%
(430)
(148)
-
-
Pounds Sterling
70
63
9.13%
(70)
(63)
-
-
Swiss Francs
71
60
4.75%
(12)
(9)
59
51
European Currency Unit
68
58
6.63%
(68)
(58)
-
-
Australian Dollars
47
45
12.50%
(47)
(45)
-
-
Netherlands Guilders
28
24
6.64%
(14)
(12)
14
12
Spanish Pesetas
472
226
12.31%
(472)
(226)
-
-
Finnish Markkaa
64
57
9.63%
(64)
(57)
-
-
Swedish Kronor
83
75
10.50%
(83)
(75)
-
-
$2,670
$1,561
$( 18)
$ 45
$2,652
$1,606
Principal and interest are payable in the currency borrowed. Under its borrowing agreements, the Corporation is not permitted to mortgage or allow
a lien to be placed on its assets (other than purchase money security interests) without extending equivalent security to the holders of such borrowings.
The weighted average cost of market borrowings after currency swaps at June 30, 1990 was 8.11%.
Under the currency swaps, proceeds of borrowings are converted into a different currency and, simultaneously, a forward exchange agreement is
executed in order to recover the currency converted. The receivable on currency swaps of $18 million at June 30, 1990, as shown in the above table,
consists of swap transactions in net receivable positions of $26 million and swap transactions in net payable positions of $8 million; these amounts result
from exchange rate movements occurring subsequent to the dates of the swap transactions. The net receivable or payable will not be realized if the
swaps are held to maturity. At June 30, 1990, the Corporation had gross receivables from currency swaps at a book value of $1,334 million and gross
payables from currency swaps at a book value of $1,316 million.
The Corporation has also entered into interest rate swap agreements with respect to notional principal amounts of $1,048 million ($500 million-
1989) under which it is obligated to make interest payments on a variable rate basis, averaging 8.37% at June 30, 1990, in exchange for receiving fixed
rate payments, averaging 8.93% at June 30, 1990. The differential to be paid or received as interest rates change is recognized over the life of the agree-
ment.
The Corporation could be exposed to credit loss in the event of nonperformance by counterparties to the swap agreements. However, the Corpo-
ration is highly selective in the choice of swap counterparties and therefore does not consider nonperformance to represent a significant risk.
Borrowings outstanding from the International Bank for Reconstruction and Development (IBRD) are summarized below. No currency or interest
rate swaps have been entered into with respect to these borrowings. Principal and interest are payable in the currency borrowed.
Principal Amount
Weighted
($ millions)
Average Cost
June 30
June 30
1990
1989
1990
US Dollars
$159
$194
8.21%
Deutsche Mark
465
311
7.67%
Swiss Francs
148
98
6.00%
Japanese Yen
60
36
6.20%
Other Currencies
77
56
9.38%
$909
$695
In addition, undrawn balances on committed borrowings from the IBRD at June 30, 1990 and 1989 were $311.8 million and $382.3 million, respec-
tively. A commitment fee is payable on the undrawn balances of the loans at rates from 2/5 to 3/4 of 1% per annum. For the fiscal year ended June 30,
1990 such fees aggregated $2.5 million ($2.5 million-1989).
56
Exhibit E
The principal amounts repayable on borrowings outstanding in all currencies during the fiscal years ending June 30, 1991 through June 30, 1995
and thereafter are as follows:
($ millions)
1991
1992
1993
1994
1995
Thereafter
Borrowings from market sources
$ 0.9
$
1.0
$459.4
$453.1
$704.7
$1,050.9
Borrowings from IBRD
85.6
104.0
114.8
144.9
109.2
350.5
$86.5
$105.0
$574.2
$598.0
$813.9
$1,401.4
NOTE H-CAPITAL STOCK
On December 26, 1985 the Board of Governors approved a resolution increasing the authorized capital to $1,300,000,000. The resolution, as
amended, also allocated $650,000,000 for additional subscriptions by members during a subscription period ending August 1, 1991. Members may
elect to pay subscriptions in full or in installments payable not later than August 1, 1991 or within six months thereafter.
NOTE I-INTEREST AND FINANCIAL FEES
Interest and financial fees comprise the following:
Fiscal Years Ended June 30
($ thousands)
1990
1989
Interest income
$276,428
$224,403
Commitment fees
9,832
10,468
Other financial fees
10,823
9,486
Total interest and financial fees
$297,083
$244,357
NOTE J-CONTRIBUTIONS TO SPECIAL PROGRAMS
On December 5, 1985 the Board of Directors approved a recommendation, modified on May 21, 1986, under which the Corporation will contribute
a total of $2 million to the Africa Project Development Facility. As of June 30, 1990 the Corporation had contributed $1.5 million. The remaining amount
of $500,000 was accrued in fiscal year 1990 and will be paid in fiscal year 1991. In addition, the Board has authorized the Corporation to enter into a
joint program with the Multilateral Investment Guarantee Agency to support the Foreign Investment Advisory Service (FIAS) activity. The Corporation's
contribution to FIAS as of June 30, 1990 was $400,000. A further contribution of $400,000 will be made in the fiscal year ending June 30, 1991.
NOTE K-OTHER MATTERS
Staff Retirement Plan-The International Bank for Reconstruction and Development (IBRD) has a defined benefit retirement Plan covering substan-
tially all of the staff of the Corporation, the IBRD and the Multilateral Investment Guarantee Agency (MIGA). Under the Plan, benefits are based on years
of service and average compensation, with the staff contributing a fixed percentage of pensionable remuneration and the Corporation, IBRD and MIGA
contributing the remainder of the actuarially determined cost of funding future Plan benefits. The total contribution is based upon the aggregate funding
method. All contributions to the Plan and all other assets and income held for purposes of the Plan are held separately from the other assets and income
of the Corporation, IBRD and MIGA and can be used only for the benefit of the participants in the Plan and their beneficiaries, until all liabilities to them
have been paid or provided for. The total expense allocated to the Corporation for the fiscal year ended June 30, 1990 was $6.9 million ($4.4 million-
1989).
Other Post Employment Benefits-The IBRD also provides certain life insurance and medical benefits to substantially all retired staff for the Corpo-
ration, IBRD and MIGA and their spouses. Commencing in the current fiscal year, the Corporation, IBRD and MIGA began accruing, on an actuarially
determined basis, the expected future cost of providing such benefits for future retirees. The cost of these benefits is accrued over the estimated service
life of employees expected to qualify for them (approximately 15 years). In addition, in the current year the Corporation expensed $7.6 million being the
actuarially determined liability existing at the beginning of the year associated with the cost of providing such benefits. This expense is included in admin-
istrative expenses and is funded annually.
Service and Support Payments-The Corporation obtains some administrative and overhead services from the International Bank for Reconstruc-
tion and Development (IBRD) in those areas where common services can be efficiently provided by IBRD. This includes shared costs of the Boards of
Governors and Directors, and other services such as internal auditing, administrative support, office occupancy, supplies and insurance. Payments for
these services are made by the Corporation to IBRD based on negotiated fees, direct chargeback and allocated charges where chargeback is not fea-
sible. Total of such expenses for the fiscal year ended June 30, 1990 amounted to $17.1 million ($10.8 million-1989).
57
Report of Independent Accountants
Price Waterhouse
The Hague
Tokyo
(International Firm)
London
Washington
New York
Price Waterhouse
July 30, 1990
President and Board of Governors
International Finance Corporation
In our opinion, the financial statements appearing on pages 50 to 57 of this report present fairly, in
all material respects, in terms of United States dollars, the financial position of the International
Finance Corporation at June 30, 1990 and 1989, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting principles in the United
States and with International Accounting Standards. These financial statements are the responsi-
bility of management of the International Finance Corporation; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our audits of these state-
ments in accordance with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial statement presen-
tation. We believe that our audits provide a reasonable basis for the opinion expressed above.
Price Waterhouse
(International Firm)
58
APPENDICES
Governors and Alternates
60
Directors and Alternates
and Their Voting Power
62
Banking Advisory Panel and
Business Advisory Council
63
The Year's Approvals
64
Investment Portfolio
78
Statement of Cumulative
Gross Commitments
93
IFC Management
94
59
Governors and Alternates
As of June 30, 1990
Member
Governor
Alternate
Afghanistan
Hamidullah Tarzi
Zalmai Ahmadi
Angola
Antonio Henriques da Silva
Antonio da Silva Inacio
Antigua and Barbuda
John E. St. Luce
Ludolph Brown
Argentina
Antonio Erman Gonzalez
Javier Gonzalez Fraga
Australia
P.J. Keating
Bob Dun
Austria
Ferdinand Lacina
Othmar Haushofer
Bahamas, The
Sir Lynden O. Pindling
Ethelyn C. Isaacs
Bangladesh
Mohammad Abdul Munim
Enam Ahmed Chaudhury
Barbados
L. Erskine Sandiford
Winston A. Cox
Belgium
Philippe Maystadt
Alfons Verplaetse
Belize
Said W. Musa
Yvonne S. Hyde
Benin
Paul Dossou
Fatiou Adekounte
Bolivia
Enrique García Rodriguez
Raul Boada Rodriguez
Botswana
F.G. Mogae
Baledzi Gaolathe
Brazil
Zelia Maria Cardoso de Mello
Ibrahim Eris
Burkina Faso
Pascal Zagre
Henri Bruno Bessin
Burundi
Gérard Niyibigira
Salvator Nkeshimana
Cameroon
Elizabeth Tankeu
Simon Ngann Yonn
Canada
Michael H. Wilson
Marcel Masse
Cape Verde
Arnaldo C. de Vasconcelos Franca
Antonio Hilario Cruz
Chile
Alejandro Foxley Rioseco
José Pablo Arellano
China
Wang Bingqian
Chi Haibin
Colombia
Luis F. Alarcón-Mantilla
Francisco J. Ortega
Congo, People's Rep. of the
Pierre Moussa
Dieudonne Diabatantou
Costa Rica
Thelmo Vargas Madrigal
Jorge Guardia Quiros
Côte d'Ivoire
Moïse Koumoue Koffi
Léon Naka
Cyprus
George Syrimis
Michael Erotokritos
Denmark
Uffe Ellemann-Jensen
Ole Loensmann Poulsen
Djibouti
Mohamed Djama Elabe
Ibrahim Kassim Chehem
Dominica
Mary Eugenia Charles
Gilbert Williams
Dominican Republic
Luis Toral Cordova
Manuel E. Gómez Pieterz
Ecuador
Jorge Gallardo Zavala
Edison Ortiz Durán
Egypt, Arab Republic of
Kamal El-Ganzoury
Maurice Makram-Allah
El Salvador
Mirna Lievano de Marques
José Roberto Orellana Milla
Ethiopia
Tekola Dejene
Seyoum Alemayehu
Fiji
J.N. Kamikamica
Rigamoto Taito
Finland
Matti Louekoski.
Osmo Sarmavuori
France
Jacques de Larosière
Jean-Claude Trichet
Gabon
Marcel Doupamby-Matoka
Richard Onouviet
Gambia, The
Saihou S. Sabally
Alieu M. Ngum
Germany, Fed. Rep. of
Juergen Warnke
Horst Koehler
Ghana
Kwesi Botchwey
Kwesi Bekoe Amissah-Arthur
Greece
George Souflias
George Papastamkos
Grenada
George Ignatius Brizan
Lauriston F. Wilson, Jr.
Guatemala
Juan Francisco Pinto Casasola
Oscar Pineda Robles
Guinea
Ibrahima Sylla
Kerfalla Yansane
Guinea-Bissau
Pedro A. Godinho Gómes
José Lima Barber
Guyana
Carl Greenidge
Winston Murray
Haiti
Violene Legagneur
Ludovic Pierre
Honduras
Benjamin Villanueva
Ricardo Maduro Joest
Hungary
Imre Tarafas
Istvan Major
Iceland
Jon Sigurdsson
Olafur R. Grimsson
India
Madhu Dandavate
Bimal Jalan
Indonesia
J.B. Sumarlin
Hasudungan Tampubolon
Iran, Islamic Rep. of
Mohsen Noorbakhsh
Mehdi Navab
Iraq
Subhi Frankool
Hashim Ali Obaid
Ireland
Albert Reynolds
Sean P. Cromien
Israel
Michael Bruno
Yaacov Lifshitz
Italy
Carlo Azeglio Ciampi
Mario Sarcinelli
Jamaica
Seymour Mullings
Omar Davies
Japan
Ryutaro Hashimoto
Yasushi Mieno
Jordan
Awni Masri
Mohammad H. Al-Saqqaf
Kenya.
George Saitoti
Charles S. Mbindyo
Kiribati
Teatao Teannaki
Baraniko Baaro
Korea, Republic of
Yung-Euy Chung
Kun Kim
Kuwait
Ali Al-Khalifa Al-Sabah
Bader Meshari Al-Humaidhi
Lebanon
Ali El-Khalil
Raja Himadeh
Lesotho
E.R. Sekhonyana
Tom Liphapang Tuoane
60
Appendix A
Member
Governor
Alternate
Liberia
Elijah E. Taylor
Mary B. Dennis
Libya
Mohamed El Madni Al-Bukhari
Bashir Ali Khallat
Luxembourg
Jean-Claude Juncker
Yves Mersch
Madagascar
Jean Robiarivony
Nirina Andriamanerasoa
Malawi
L. Chimango
Graham Chipande
Malaysia
Daim Zainuddin
Zain Azraai
Maldives
Fathulla Jameel
(Vacant)
Mali
Diango Cissoko
Souleymane Dembele
Mauritania
Moustapha Ould Abeiderrahmane.
M'Rabih Rabou Ould Cheikh Bounena
Mauritius
Beergoonath Ghurburrun
Madhukarlall Baguant
Mexico
Pedro Aspe Armella
José Angel Gurría
Morocco
Mohamed Berrada
Mohammed Dairi
Mozambique
Abdul Magid Osman
Eneas da Conceição Comiche
Myanmar
D.O. Abel
Min Aung
Nepal
Devendra Raj Panday
Sashi Narayan Shah
Netherlands
W. Kok
J.P. Pronk
New Zealand
Graham C. Scott
Chris N. Pinfield
Nicaragua
Emilio Pereira
Francisco J. Mayorga
Niger
Almoustapha Soumaila
Abdou Insa
Nigeria
S. Olu Falae
Ahmadu Abubakar
Norway
Arne Skauge
Tom Vraalsen
Oman
Qais Abdul-Munim Al-Zawawi
Mohammed Bin Musa Al-Yousef
Pakistan
V.A. Jafarey
Khalid Mahmud Chima
Panama
Guillermo Ford B.
Luis H. Moreno
Papua New Guinea
Paul Pora
Morea Vele
Paraguay
Enzo Debernardi
Oscar Jacinto Obelar
Peru
Cesar Vásquez Bazán
(Vacant)
Philippines
Jesus P. Estanislao
(Vacant)
Poland
Wladyslaw Baka
Grzegorz Wojtowicz
Portugal
Luis Miguel Beleza
(Vacant)
Rwanda
Benoit Ntigulirwa
Emmanuel Ndahimana
St. Lucia
John G.M. Compton
Bernard Lacorbiniere
Saudi Arabia
Mohammad Abalkhail
Hamad Al-Sayari
Senegal
Moussa Toure
Abdoul Aziz Diop
Seychelles
Danielle de St. Jorre
Bertrand Rassool
Sierra Leone
Thomas Taylor Morgan
Y.T. Sesay
Singapore
Richard Hu Tsu Tau
Ngiam Tong Dow
Solomon Islands
Christopher C. Abe
Leonard Palmer Maenu'u
Somalia
Mohamud Ghelle Yusuf
Said Ahmed Yusuf
South Africa
C.L. Stals
J.A. Lombard
Spain
Carlos Solchaga
Mariano Rubio Jiménez
Sri Lanka
D.B. Wijetunga
R. Paskaralingam
Sudan
Abdul Rahim Mahmoud Hamdi
Mohamed Khair El Zubair
Swaziland
Andreas Fakudze
Noreen N. Maphalala
Sweden
Allan Larsson
Lena Hjelm-Wallen
Syrian Arab Republic
Mohammed Khaled Mahayni.
Adnan Al-Saty
Tanzania
K.A. Malima
Simon Mbilinyi
Thailand
Pramual Sabhavasu
Panas Simasathien
Togo
Barry Moussa Barque
Kwassi Klutse
Tonga
James Cecil Cocker
Selwyn Percy Jones
Trinidad and Tobago
Selby Wilson
William G. Demas
Tunisia
Mustapha Kamel Nabli
Abdellatif Saddem
Turkey
Namik Kemal Kilic
Mahfi Egilmez
Uganda
Joshua Mayanja Nkangi
Suleiman Kiggundu
United Arab Emirates
Hamdan bin Rashid Al Maktoum
Ahmed Humaid Al-Tayer
United Kingdom
Robin Leigh-Pemberton
Timothy Lankester
United States
Nicholas F. Brady
Richard T. McCormack
Uruguay
Enrique Braga Garcia
Conrado Hughes
Vanuatu
Sela Molisa
George Pakoa
Venezuela
Miguel Rodríguez
Eduardo Quintero
Viet Nam
Cao Si Kiem
(Vacant)
Western Samoa
Tuilaepa S. Malielegaoi
Kolone Va'ai
Yemen Arab Republict
Mohammed Saeed Al-Attar
Kaid Mohammed Al-Hirwi
Yugoslavia
Branimir Zekan
Boris Skapin
Zaire
Bombito Botomba Lompio
Mbonga Magalu Engwanda
Zambia
Gibson G. Chigaga
Lennard Nkhata
Zimbabwe
B.T.G. Chidzero
K.J. Moyana
t On May 22, 1990, the Yemen Arab Republic and the People's Democratic Republic of Yemen merged into a single state, the Republic of Yemen. Effective July 13, 1990,
the Republic of Yemen is substituted for the Yemen Arab Republic in the Corporation's records.
61
Directors and Alternates
and Their Voting Power
Appendix B
June 30, 1990
Director
Alternate
Casting Votes of
Total Votes
% of Total
Appointed
E. Patrick Coady
Mark T. Cox, IV
United States
231,679
21.14
Masaki Shiratori
Yukio Yoshimura
Japan
80,044
7.31
Gerhard Boehmer
Bernd Esdar
Federal Republic of Germany
73,111
6.67
Jean-Pierre Landau
Stéphane Pallez
France
68,650
6.27
Frank Cassell
Robert Graham-Harrison
United Kingdom
68,650
6.27
Elected
J.S. Baijal
M. Mustafizur Rahman
Bangladesh, India, Sri Lanka
54,872
5.01
(India)
(Bangladesh)
Cesare Caranza
Fernando S. Carneiro
Greece, Italy, Poland, Portugal
54,788
5.00
(Italy)
(Portugal)
Frank Potter
Clarence Ellis
Antigua and Barbuda, The Bahamas, Barbados,
(Canada)
(Guyana)
Belize, Canada, Dominica, Grenada,
Guyana, Ireland, Jamaica, St. Lucia
52,510
4.79
Jacques de Groote
Bahar Sahin
Austria, Belgium, Hungary, Luxembourg,
(Belgium)
(Turkey)
Turkey
51,049
4.66
Jonas H. Haralz
Jorunn Maehlum
Denmark, Finland, Iceland, Norway,
(Iceland)
(Norway)
Sweden
44,106
4.03
Jorge Pinto
Edgar Ayales¹
Costa Rica, El Salvador, Guatemala,
(Mexico)
(Costa Rica)
Honduras, Mexico, Nicaragua, Panama,
Spain, Venezuela
43,147
3.94
Chang-Yuel Lim
Robert G. Carling
Australia, Kiribati, Korea (Republic of),
(Republic of Korea)
(Australia)
New Zealand, Papua New Guinea, Solomon
Islands, Vanuatu, Western Samoa
39,938
3.64
Paul Arlman
Cvitan Dujmovic
Cyprus, Israel, Netherlands, Yugoslavia
39,180
3.58
(Netherlands)
(Yugoslavia)
Eduardo Wiesner
Pedro Sampaio Malan
Brazil, Colombia, Dominican Republic,
(Colombia)
(Brazil)
Ecuador, Haiti, Philippines, Trinidad
and Tobago
33,654
3.07
Vibul Aunsnunta
Le Van Chau
Fiji, Indonesia, Malaysia, Myanmar, Nepal,
(Thailand)
(Viet Nam)
Singapore, Thailand, Tonga, Viet Nam
32,995
3.01
Raymundo Morales
Felix Alberto Camarasa
Argentina, Bolivia, Chile, Paraguay,
(Peru)
(Argentina)
Peru, Uruguay
30,059
2.74
Fawzi Hamad Al-Sultan
Mohamed W. Hosny
Egypt (Arab Republic of), Iraq, Jordan,
(Kuwait)
(Arab Republic of Egypt)
Kuwait, Lebanon, Maldives, Oman,
Pakistan, Syrian Arab Republic, United
Arab Emirates, Yemen Arab Republic 2
26,646
2.43
J.S.A. Funna
Jabez A. Langley
Botswana, Burundi, Ethiopia, The Gambia,
(Sierra Leone)
(The Gambia)
Guinea, Kenya, Lesotho, Liberia, Malawi,
Mozambique, Nigeria, Seychelles,
Sierra Leone, Sudan, Swaziland,
Tanzania, Uganda, Zambia, Zimbabwe
22,745
2.08
Ibrahim A. Al-Assaf
Abdulaziz Al-Sehail
Saudi Arabia
14,697
1.34
(Saudi Arabia)
(Saudi Arabia)
Andre Milongo
Jean-Pierre Le Bouder
Benin, Burkina Faso, Cameroon, Cape
(People's Republic of the Congo)
(Central African Republic)
Verde, Congo (People's Republic of the),
Cote d'Ivoire, Djibouti, Gabon, Guinea-
Bissau, Madagascar, Mali, Mauritania,
Mauritius, Niger, Rwanda, Senegal,
Somalia, Togo, Zaire
14,206
1.30
Mourad Benachenhou
Salem Mohamed Omeish
Afghanistan, Ghana, Iran (Islamic
(Algeria)
(Libya)
Republic of), Libya, Morocco, Tunisia
10,627
.97
Zhang Junyi
Jin Liqun
China
8,372
.76
(China)
(China)
In addition to the Directors and Alternates shown in the foregoing list, the following also served after June 30, 1989:
Director
End of period of service
Alternate Director
End of period of service
Mario Draghi
January 16, 1990
J.A.L. Faint
August 20, 1989
(Italy)
(United Kingdom)
Hélène Ploix
October 1, 1989
Rodrigo M. Guimaraes
November 22, 1989
(France)
(Portugal)
Mohd. Ramli Wajib
October 31, 1989
Veikko Kantola
July 31, 1989
(Malaysia)
(Finland)
C.R. Krishnaswamy Rao Sahib
July 31, 1989
Michael von Harpe
September 1, 1989
(India)
(Fed. Rep. of Germany)
Jobarah E. Suraisry
October 10, 1989
(Saudi Arabia)
Note: Angola (1,087 votes) and South Africa (9,264 votes) did not participate in the 1988 Regular Election of Executive Directors.
1. Succeeded by Silvia Charpentier (Costa Rica), effective July 1, 1990.
62
2. On May 22, 1990, the Yemen Arab Republic and the People's Democratic Republic of Yemen merged into a single state, the Republic of Yemen. Effective
July 13, 1990, the Republic of Yemen is substituted for the Yemen Arab Republic in the Corporation's records.
The Banking Advisory Panel
Appendix C
IFC's Banking Advisory Panel meets regularly with the Corporation's management to discuss IFC's activities and policies. The Corporation wishes to
express its appreciation for the valuable advice the panel members have given.
Abdlatif y Al-Hamad
Director General
Yusuke Kashiwagi
Chairman
Arab Fund for Economic and Social
The Bank of Tokyo, Ltd.
Development
Tokyo, Japan
Kuwait
Lord Roll of Ipsden
Chairman
Jan Ekman
Vice Chairman
S.G. Warburg and Co. Ltd.
Svenska Handelsbanken
London, England
Stockholm, Sweden
Robert V. Roosa
Partner
Wilfried Guth
Chairman of the Supervisory Board
Brown Brothers Harriman and Co.
Deutsche Bank A.G.
New York, N. Y., United States
Frankfurt, Federal Republic of Germany
Anthony Solomon
Chairman
Jean-Yves Haberer
President
S.G. Warburg (USA) Inc.
Crédit Lyonnais
New York, N. Y., United States
Paris, France
The Business Advisory Council
The Business Advisory Council, which advises IFC's management on the needs and views of business and industry in connection with the Corporation's
activities, held its Annual Meeting in April 1990.
S. Babar Ali
Adviser
Daniel Parker
Chairman and Chief Executive Officer
Packages Limited
Omniflight, Inc.
Lahore, Pakistan
Charleston, South Carolina, United States
Thomas J. Bata
Chairman of the Board
Carlo Patrucco
Vice President, Rapporti Sindacali
Bata Limited
Confindustria
Don Mills, Ontario, Canada
Rome, Italy
Sir Michael Caine
Chairman
José Piñera
Executive Chairman
Booker plc
Asset-Chile Ltd.
London, England
Santiago, Chile
Ariston M. Chambati
Chairman and Chief Executive
Marcus V. Pratini de Moraes
Chairman
T.A. Holdings Limited
PPH Companhia Industrial de Polipropileno
Harare, Zimbabwe
Rio de Janeiro, Brazil
Mustapha Faris
Chief Executive Officer
Rong Yiren
Chairman
Banque Nationale pour le Développement
China International Trust and Investment
Economique
Corporation
Rabat, Morocco
Beijing, China
Jaime García Parra
President
Antonio Ruíz Galindo, Jr.
Formerly Chairman of
J. Garcia P. y Co.
DESC Sociedad de Fomento Industrial,
Bogotá, Colombia
S.A. de C.V.
Tae Yong Hahm
President and Representative Director
Mexico D.F. Mexico
Korea Long Term Credit Bank
Erol Sabanci
Vice Chairman of the Board
Seoul, Korea
Akbank, T.A.S.
Carl H. Hahn
Chairman, Board of Management
Istanbul, Turkey
Volkswagen A.G.
Ibrahim A. Salamah
Vice Chairman and Chief Executive Officer
Wolfsburg, Federal Republic of Germany
Saudi Basic Industries Corporation
Fouad Hashem Awad
Chairman
Riyadh, Saudi Arabia
Arab Investment Bank
Janko Smole
Formerly Federal Minister of Finance
Cairo, Egypt
Belgrade, Yugoslavia
Olorogun Michael C.O. Ibru, OFR
Chief Executive
Amadou Moctar Sow
Chief Executive Officer
Ibru Group
Soc. Industrielle de Produits Laitiers
Lagos, Nigeria
Dakar, Senegal
Sam E. Jonah
Managing Director
Julius Tahija
Chairman, Board of Commissioners
Ashanti Goldfields Corporation (Ghana)
PT Caltex Pacific Indonesia
Limited
Jakarta, Indonesia
Accra, Ghana
Toshio Takeuchi
Senior Adviser
W. Sidney Knox
Chairman and Chief Executive
Toyo Menka Kaisha, Ltd.
Neal & Massy Holdings Limited
Tokyo, Japan
Port of Spain, Trinidad
Joseph B. Wanjui
Chairman
Stefan Lewandowski
Chairman
East Africa Industries Limited
Haste International, Ltd.
Nairobi, Kenya
Warsaw, Poland
Gérard Worms
Keshub Mahindra
Managing Director
Chairman
Compagnie Financière de Suez
Mahindra & Mahindra Limited
Paris, France
Bombay, India
Jaime Zobel de Ayala
President and Chairman of the Board
Eugenio A. Mendoza
President of the Corporate Management
Ayala Corporation
Committee
Manila, Philippines
Mendoza Enterprises
Caracas, Venezuela
Federico J. L. Zorraquín
President
Tarrin Nimmanahaeminda
S.A. Garovaglio y Zorraquín
President and Chief Executive Officer
Buenos Aires, Argentina
The Siam Commercial Bank, Ltd.
Bangkok, Thailand
63
The Year's Approvals
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
Argentina
Corporación de Inversiones y Privatización (CIP) will manage a new debt-equity
Loan
-
conversion fund, the Argentina Private Development Trust Company Limited.
Equity
.08
Total fund size is $1.25 billion.
Quasi-equity
-
Syndications
-
Total
.08
388.10
IFC approved its second investment in the Hidra Oil Development Project,*
Loan
-
the first commercial development of an offshore oilfield in Argentina. The project
Equity
-
is currently producing about 28,000 barrels of crude oil per day.
Quasi-equity
-
Syndications
10.00
Standby facility
20.00
Total
30.00
30.00
Petroquímica Ensenada S.A. (Petroken), a greenfield project, will build and
Loan
15.00
operate a plant with the capacity to produce 100,000 tons of polypropylene
Equity
-
annually.
Quasi-equity
5.00
Syndications
15.00
Total
35.00
135.10
Terminal 6 S.A.* will expand its port services to Paraguayan and Bolivian oilseed
Loan
4.00
exporters by constructing a barge terminal and storage facility to handle upriver
Equity
-
cargo.
Quasi-equity
-
Syndications
-
Total
4.00
13.20
Asia
Jardine Fleming Asia Select Limited is a seven-year, closed-end investment
Loan
-
company that will make equity and quasi-equity investments, with a focus on
Equity
11.25
unlisted securities, in emerging markets in the Asia Pacific region.
Quasi-equity
-
Syndications
-
Total
11.25
100.00
Bangladesh
Bengal Glass Works Ltd., Bangladesh's only automated glass producer, will expand
Loan
2.30
its capacity and range of glass products by installing a 20-metric ton furnace to
Equity
-
produce 3,800 metric tons yearly of flint bottles. The company will also attach a
Quasi-equity
-
light-bulb-shell manufacturing machine to an existing 5-metric ton furnace to
Syndications
-
produce 20 million bulb-shells per year.
Total
2.30
6.80
Belize
Journey's End Caribbean Club Limited is expanding a hotel into a 70-room resort
Loan
-
on Ambergis Caye, which fronts the second largest barrier reef in the world. The
Equity
-
area is attracting an increasing number of water sports enthusiasts. Tourism is an
Quasi-equity
1.00
important and growing source of foreign exchange for Belize. This is IFC's first
Syndications
I
investment in Belize.
Total
1.00
3.00
Bolivia
IFC will intermediate a currency swap on behalf of Banco Industrial S.A. (BISA)*.
Loan
-
IFC will swap a DM 10 million fixed-rate loan from DEG to BISA into floating rate
Equity
-
cash flows in U.S. dollars. IFC approved a US$10 million credit line to BISA
Quasi-equity
-
in July 1987.
Syndications
-
Guarantee
2.12
Total
2.12
5.90
Botswana
Northern Textile Mills,
a new company, will manufacture terry towels for both local
Loan
.38
and export markets. Many of the company's products will be made to customers'
Equity
-
specifications. Botswana currently relies on imports to satisfy local demand.
Quasi-equity
-
Syndications
-
Total
.38
1.82
64
Appendix D
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
Brazil
Bahia Sul Celulose S.A. (Bahia Sul) will build and operate a greenfield, partially
Loan
40.00
integrated, pulp and paper mill that will produce yearly 230,000 tons of market
Equity
15.00
pulp and 230,000 tons of printing and writing paper. The project includes planting
Quasi-equity
-
and maintenance of about 70,000 hectares of eucalyptus plantations.
Syndications
-
Total
55.00
897.00
Companhia Minuano de Alimentos (Minuano) will expand its integrated poultry
Loan
-
system to meet growing domestic and export demand. Expansion will emphasize
Equity
-
value-added products, especially poultry parts and processed meats.
Quasi-equity
7.00
Syndications
-
Total
7.00
28.00
Companhia Vidraria Santa Marina (Santa Marina) will construct a facility to produce
Loan
10.00
20,500 tons of glass fibers annually. The output of the project will be used for the
Equity
-
production of reinforced plastics for transportation, construction, marine, capital
Quasi-equity
5.00
goods, and other industries.
Syndications
10.00
Total
25.00
103.00
Engepol Engenharia de Polimeros S.A. (Engepol) will construct and operate
Loan
3.50
a greenfield plastics manufacturing plant. The company will use high-density
Equity
-
polyethylene to develop engineered plastic products for niche markets in
Quasi-equity
-
Brazil.
Syndications
-
Total
3.50
11.54
Ripasa S.A. Celulose e Papel (Ripasa) will expand its paper production capacity
Loan
20.00
by 144,000 tons annually to complete the vertical integration of the company.
Equity
5.00
Quasi-equity
-
Syndications
-
Total
25.00
146.00
Cameroon
IFC's investment in Société Industrielle Laitière du Cameroun* will help the company
Loan
1.15
increase its vehicle fleet, build additional infrastructure, buy production equipment,
Equity
.21
replenish working capital, and meet the cost overrun caused by delay in project
Quasi-equity
-
start-up.
Syndications
-
Total
1.36
4.10
Chile
Compañía de Teléfonos de Chile S.A. (CTC) is doubling the number of phone lines
Loan
60.00
in service and further increasing and diversifying its telecommunications services.
Equity
-
in a second project, IFC underwrote $22.1 million of CTC's issue of American
Quasi-equity
20.00
Depositary Receipts in the international capital markets. The issue, which was
Syndications
50.00
structured by IFC's International Securities Group, is registered with the U.S.
Underwriting
22.10
Securities and Exchange Commission and listed on the New York Stock Exchange.t
Total
152.10
1,104.40
Compañía Puerto de Coronel S.A. (Puerto Coronel) will construct a general
Loan
5.00
cargo port to handle the growing forestry exports from southern Chile.
Equity
3.00
Quasi-equity
-
Syndications
I
Total
8.00
39.70
IFC underwrote and placed the Five Arrows Chile Fund, which will invest
Loan
I
primarily in equity securities listed on the Chilean stock exchanges.
Equity
-
Quasi-equity
-
Syndications
-
Underwriting
6.00
Total
6.00
75.00
Leasing Andino will extend lease finance to small and medium-size Chilean
Loan
5.00
enterprises for the acquisition of capital equipment.
Equity
I
Quasi-equity
-
Syndications
5.00
Total
10.00
10.00
65
The Year's Approvals
continued
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
Colombia
Compañía Colombiana de Tejidos S.A. (Coltejer), the largest integrated textile
Loan
22.50
company in Colombia, has asked for IFC's assistance in developing a three-year,
Equity
-
$56.86 million equivalent investment program to upgrade the company's product
Quasi-equity
-
mix and improve product quality and contribution margins.
Syndications
-
Total
22.50
56.86
Oleoducto de Colombia S.A. is being formed to build and operate an oil pipeline
Loan
35.00
from Vasconia in the Middle Magdalena Valley to Covenas on the Caribbean
Equity
-
Coast. The pipeline will transport 150,000 barrels per day for export. The project
Quasi-equity
-
will include a marine terminal at Covenas and will increase Colombia's oil
Syndications
35.00
production and exports. IFC is making a loan of $35 million for its account and
321.00
arranging a syndicated loan of $35 million.
Total
70.00
Côte d'Ivoire
Omnium de Transformations Alimentaires, S.A. (OTA), a new company
Loan
.66
sponsored by Cosmivoire, an IFC client, will produce animal and vegetable
Equity
.17
fats for the local market. OTA received technical assistance from APDF.
Quasi-equity
-
The company's products are expected to meet growing local demand while
Syndications
-
replacing imports, and to add value to refined and semi-refined oil produced
Total
.83
1.80
by Cosmivoire.
Société des Industries Alimentaires et des Produits Laitiers de Côte d'Ivoire*
Loan
1.74
will increase annual production of dairy products, including reconstituted,
Equity
.35
condensed, and sterilized milk and yoghurt, from 17,125 to 31,500 tons to meet
Quasi-equity
-
domestic demand.
Syndications
-
Total
2.09
4.90
IFC's loan will help finance the rehabilitation of Tribois S.A., a joint venture
Loan
.36
between Banque Ivoirienne pour le Développement Industriel and Ober S.A.,
Equity
-
a French wood processing company. Tribois specializes in the production of
Quasi-equity
.18
veneer, lumber, and molding, mainly for the European markets.
Syndications
-
Total
.54
1.30
Cyprus
Leptos Calypos Bay Hotels Ltd. will construct and operate a 300-room, five-star
Loan
5.48
seaside hotel for tourists in Paphos.
Equity
-
Quasi-equity
2.72
Syndications
-
Total
8.20
30.00
Dominican Republic
San Isidro Free Trade Zone was formed to lease factory shells to major foreign
Loan
6.00
companies for the assembly of data processing and electrical components.
Equity
-
IFC will finance the construction of an additional 655,000 square feet of covered
Quasi-equity
-
space over two and a half years.
Syndications
-
Total
6.00
15.30
Sociedad Comercializadora, S.A. (Comersa) will market and distribute about
Loan
-
12 percent of the cement produced by Cementos Nacionales. The major
Equity
.08
shareholders of Cementos Nacionales, S.A., in which IFC has an existing
Quasi-equity
-
9.1 percent equity interest, asked the Corporation to participate in the
Syndications
I
capital of this new sales company.
Total
.08
.78
The Gambia
Pelican Seafood will rehabilitate and reactivate a fish-processing plant to make
Loan
1.05
fish products for export and local consumption.
Equity
-
Quasi-equity
-
Syndications
.60
Total
1.65
2.50
66
Appendix D
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
Ghana
Alugan Co. Ltd.
currently manufactures and installs aluminum doors, windows, and
Loans
.28
other building products from imported, semi-finished materials. The company is
Equity
-
modernizing and expanding its facilities to increase production and improve efficiency,
Quasi-equity
-
and introducing new machinery that will enable it to use domestic raw materials.
Syndications
-
Total
.28
.70
Ashanti Goldfields Corporation (Ghana) Limited (AGC)* will develop the Sansu
Loan
35.00
area of its concession by surface mining and expand AGC's tailings retreatment
Equity
-
capacity to increase the gold output by five tons annually. IFC approved a loan
Quasi-equity
-
and arranged syndicated loans.
Syndications
35.00
Total
70.00
93.00
A two-star hotel, Dimples Inn
is adding 20 guest rooms and enlarging its other
Loan
.24
facilities to meet growing demand for hotel rooms in Ghana. The project received
Equity
-
technical assistance from APDF.
Quasi-equity
-
Syndications
-
Total
.24
.60
Ghanaian-Australian Goldfields Limited will carry out a two-phase evaluation
Loan
-
program on the Iduapriem gold concession.
Equity
3.00
Quasi-equity
-
Syndications
-
Total
3.00
13.50
Plastic Laminates Ltd.,
the first company of its kind in Ghana, will manufacture
Loan
.60
formica and other plastic laminates for use in housing construction and furniture-
Equity
-
making. The company's products will be sold locally and in neighboring countries.
Quasi-equity
-
Technical and marketing assistance is being provided by an Italian company.
Syndications
-
Total
.60
2.50
Guinea-Bissau
The Anetibene Petroleum Exploration Program consists of seismic and geological
Loan
-
studies and an exploration well. Contingent on initial exploration results, two wells
Equity
5.85
may be drilled.
Quasi-equity
-
Syndications
-
Total
5.85
39.00
The Clearwater Fishing Project (subsequently renamed Pescas Bissau) is a
Loan
-
one-year pilot project to test the feasibility and determine the possible scope
Equity
-
of an integrated fishing venture in Guinea-Bissau.
Quasi-equity
.20
Syndications
-
Total
.20
1.15
Hungary
The First Hungary Fund's principal objective is capital growth through
Loan
-
investment, primarily in securities of Hungarian companies. Investments will
Equity
-
be managed by First Hungarian Investment Advisory Rt., a new Hungarian
Quasi-equity
7.50
joint stock company established in Budapest. IFC is making investments in
Syndications
-
both the Fund and the investment company.
Total
7.50
80.00
India
CESC Ltd. (formerly Calcutta Electric Supply Corporation) will augment
Loan
20.10
its transmission and distribution system by modifying and expanding three
Equity
I
receiving and switching stations, constructing two receiving stations,
Quasi-equity
-
and laying new underground cables between them. This will enable CESC
Syndications
-
to distribute additional power more efficiently, reduce transmission losses,
and enhance the quality and reliability of supply to the Calcutta area.
Total
20.10
92.20
Herdillia Oxides and Electronics Ltd. will establish a facility to produce 2,000
Loan
-
metric tons yearly of magnetic iron oxide (MIO), which is used in coating audio,
Equity
.32
video, and computer tapes and disks. The company will be India's first MIO
Quasi-equity
-
manufacturer.
Syndications
-
Total
.32
13.40
67
The Year's Approvals
continued
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
India Lease Development Limited,* which leases vehicles and equipment
Loan
3.50
to small-scale entrepreneurs in northern India, is increasing its capacity
Equity
I
in response to growing demand for its services.
Quasi-equity
.44
Syndications
-
Total
3.94
13.37
Industrial Credit and Investment Corporation of India Ltd. (ICICI), one of India's
Loan
-
major financial institutions, will help IFC operate an equity line to be invested in
Equity
25.00
15-20 small and medium-size enterprises over three years. ICICI will assist IFC
Quasi-equity
-
in identifying, appraising, and supervising investments under the equity line.
Syndications
I
Total
25.00
25.00
Infrastructure Leasing and Financial Services will provide loan or lease financing
Loan
15.00
for equipment and infrastructure projects, and financial services to private-
Equity
I
sector corporations.
Quasi-equity
1.95
Syndications
-
Total
16.95
16.95
Mahindra & Mahindra Ltd., a leading producer of utility vehicles and tractors,
Loan
10.00
will undertake an investment program to upgrade its products, introduce
Equity
-
modern transmission and a fuel-efficient engine, and modernize and rationalize
Quasi-equity
6.37
key manufacturing facilities in its automotive and tractor divisions. The
Syndications
-
investment program will increase annual production to 56,500 utility vehicles
Total
16.37
212.00
and 31,250 tractors and introduce a more modern, fuel-efficient range of
products to the Indian market.
Mahindra Ugine Steel Co. Ltd. (MUSCO)* invited IFC to exercise its pre-emptive
Loan
-
rights in a partly convertible debenture issue of $14.9 million offered to the
Equity
1.32
company's shareholders and employees. MUSCO, one of India's leading alloy
Quasi-equity
-
and specialized steel producers, is diversifying into hotels and real estate. It is
Syndications
-
undertaking a joint venture with the U.S. company Days Inns, Inc. to construct
Total
1.32
26.20
and operate five three-star hotels and two commercial/residential complexes.
Tata Electric Companies (TEC)* will increase their generation and transmission
Loan
60.00
capacity by adding a pumped storage unit to generate 150 megawatts of
Equity
I
additional peak power, expanding transmission lines, and replacing three old
Quasi-equity
-
conventional thermal units by one 180-megawatt combined cycle plant.
Syndications
-
TEC will also invest in a second flue gas desulfurization unit to scrub sulfur
Total
60.00
273.70
dioxide from power station emissions.
Tata Keltron Ltd.** asked IFC to participate in a rights issue of equity shares
Loan
I
offered to current shareholders.
Equity
.13
Quasi-equity
-
Syndications
-
Total
.13
.68
Technology Development and Information Company of India will provide
Loan
-
venture capital to promote the commercialization of locally developed,
Equity
2.87
technology-based products and services.
Quasi-equity
I
Syndications
-
Total
2.87
60.00
IFC exercised its pre-emptive rights in a convertible debenture issue offered
Loan
-
by Titan Watches Ltd.** to the company's shareholders and employees on a
Equity
.17
rights basis.
Quasi-equity
-
Syndications
-
Total
.17
9.10
Indonesia
A credit line to Bank Niaga will be onlent to small and medium-size clients in
Loan
7.50
agriculture, agro-industry, and manufacturing, and natural resource-based
Equity
I
industries with export potential.
Quasi-equity
I
Syndications
I
Total
7.50
15.00
68
Appendix D
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
A $10 million credit line to Bank Umum Nasionalt will complement the credit
Loan
10.00
line provided to Bank Niaga. It will be used to make long-term loans in U.S.
Equity
-
dollars to small and medium-size clients with export potential. Bank Umum will
Quasi-equity
-
provide matching funds of $10 million in local currency.
Syndications
-
Total
10.00
20.00
The Nomura Jakarta Fund is a privately placed fund that will invest in
Loan
-
securities traded on the Indonesian market.
Equity
1.45
Quasi-equity
-
Syndications
-
Underwriting
1.55
Total
3.00
30.00
P.T. Indo-Rama Synthetics will build and operate a polyester plant in West
Loan
12.00
Java to produce annually 24,500 tons of polyester staple fiber, 5,600 tons
Equity
-
of polyester texturized filament yarn, and 22,400 tons of polyester chips.
Quasi-equity
-
Syndications
-
Total
12.00
74.00
P.T. Kayu NIC Indonesia will produce 88,300 cubic meters yearly of medium-
Loan
12.20
density fiberboard, utilizing wood waste from existing timber and plywood mills
Equity
.90
in Central Java. Around 90 percent of the output will be exported to Japan,
Quasi-equity
-
Korea, and other East Asian countries.
Syndications
-
Total
13.10
52.10
IFC exercised its pre-emptive rights in a proposed issue at par by P.T. Saseka
Loan
-
Gelora Leasing** to increase paid-in capital by 50 percent.
Equity
.07
Quasi-equity
-
Syndications
-
Total
.07
.56
IFC approved an equity investment in the Raja-Pendopo Petroleum Exploration
Loan
-
Project in South Sumatra.
Equity
3.60
Quasi-equity
-
Syndications
-
Total
3.60
32.60
Jordan
Al-Hikma Pharmaceuticals (Jordan), Limited* will build a facility in Jordan to
Loan
-
produce intermediate products for its pharmaceutical-manufacturing operations.
Equity
2.00
Quasi-equity
-
Syndications
-
Total
2.00
5.32
Republic of Korea
IFC exercised its pre-emptive rights to participate in a capital increase, which
Loan
-
will allow Hae Un Dae Development Company Ltd.* to proceed with the
Equity
.50
renovation of its hotel property.
Quasi-equity
I
Syndications
-
Total
.50
15.80
The Korea Development Leasing Corporation* increased its capital base in
Loan
-
1990 by 20 percent to meet the growing demand for leasing services in Korea.
Equity
.90
Quasi-equity
-
Syndications
I
Total
.90
46.30
IFC participated in a share capital increase offered by Korea Long Term Credit
Loan
-
Bank* to support the bank's growing operations.
Equity
15.98
Quasi-equity
I
Syndications
-
Total
15.98
450.00
69
The Year's Approvals continued
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
Lesotho
Upper Qeme Holdings (Pty) Limited produces cement blocks used in
Loan
.12
construction, particularly in low and medium-cost housing. The company
Equity
-
is acquiring larger and more efficient machinery and additional working
Quasi-equity
-
capital to expand operations.
Syndications
-
Total
.12
.31
Madagascar
IFC is participating in a capital increase for Financière d'investissement ARO
Loan
-
(Fiaro),
a venture capital company that will make equity and quasi-equity
Equity
.40
investments in small and medium-size Malagasy companies. Fiaro is receiving
Quasi-equity
-
technical assistance from Institut de développement industriel, an established
Syndications
-
French venture capital company.
Total
.40
2.60
Malawi
The Leasing and Finance Company of Malawi, Limited* undertook a rights
Loan
-
issue that nearly tripled its capital base, enabling it to expand its principal activity
Equity
.11
- providing equipment financing for small and medium-size enterprises through
Quasi-equity
-
hire purchase, leasing, and business loans.
Syndications
-
Total
.11
1.08
Malaysia
Twenty First Century Oleochemicals Sdn. Bhd. will construct a 125-tons-per-day
Loan
4.50
hydrolysis plant to produce fatty acids from palm kernel oil and palm oil
Equity
.73
derivatives. Most of the project's output, which is used in various industrial and
Quasi-equity
-
consumer applications, will be exported.
Syndications
3.40
Total
8.63
20.00
Mauritius
General Haulage Limited,
a trucking business, is expanding and restructuring
Loan
.11
operations. It is acquiring two new trucks and additional working capital.
Equity
.03
Quasi-equity
-
Syndications
-
Total
.14
.32
IFC provided loan and equity financing to Saxon Properties Limited to complete
Loan
2.60
a 206-room beach hotel in Mauritius. The IFC investment will also allow the hotel
Equity
.99
to be upgraded to four stars.
Quasi-equity
-
Syndications
I
Total
3.59
14.70
Textile Industries Ltd. will upgrade equipment and construct a factory to
Loan
3.10
consolidate garment manufacturing operations in one location. IFC approved
Equity
-
a loan to the project.
Quasi-equity
-
Syndications
-
Total
3.10
7.60
Mexico
IFC has arranged a currency swap intermediation for Banca Serfin.* The bank
Loan
-
had contracted a nine-year, DM40 million loan from DEG for onlending to private
Equity
-
enterprises, which it wished to swap into U.S. dollars. This was the first transaction
Quasi-equity
-
of this type for a Mexican bank.t
Syndications
-
Guarantee
6.50
Total
6.50
22.00
Bancomer will onlend IFC's credit line to Mexican companies to develop new,
Loan
20.00
or expand existing, maquiladora industrial parks, which will then be leased to
Equity
I
small and medium-scale export-oriented companies.+
Quasi-equity
-
Syndications
-
Total
20.00
40.00
70
Appendix D
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
Banco Nacional de México (Banamex), the largest commercial bank in Mexico,
Loan
60.00
will use IFC's credit line to provide funds to small and medium-size companies
Equity
-
for corporate restructuring.t
Quasi-equity
-
Syndications
-
Total
60.00
200.00
IFC's investment will help to finance the program of Grupo Condumex,
Loan
35.00
S.A. de C.V. to increase capacity and improve efficiency over the five-year
Equity
-
period 1989-93. The program is aimed at reducing costs and making the
Quasi-equity
-
company competitive in both international markets and the increasingly open
Syndications
15.00
Mexican economy. Capacity to produce fiber optics and telephone, computer,
Total
50.00
128.00
and auto cable will be increased.
With IFC financing, Grupo Primex, S.A. de C.V.* will be able to increase production
Loan
13.00
of polyviny! chloride at its Tampico plant from 80,000 to 200,000 metric tons per
Equity
-
year. Georgia Gulf Corporation of the United States has agreed to supply the
Quasi-equity
7.00
necessary feedstock through 1995 and market half of the output. Primex will sell
Syndications
-
the remainder, primarily in export markets.
Total
20.00
57.50
Indelpro, S.A. de C.V., will design, construct, and operate Mexico's first
Loan
17.00
polypropylene resins plant. Most of the plant's yearly output of 100,000 metric
Equity
-
tons will be for the domestic market, replacing imports.
Quasi-equity
10.00
Syndications
15.00
Total
42.00
108.00
Petrocel is embarking on an investment program to improve efficiency and
Loan
26.00
expand its capacity to produce purified terephthalic acid (PTA) and dimethyl
Equity
-
terephthalate (DMT), the principal raw materials used in the manufacture
Quasi-equity
6.00
of polyester.
Syndications
-
Total
32.00
101.60
Morocco
IFC will provide Crédit Immobilier et Hôtelier (CIH),* Morocco's leading development
Loan
40.61
bank for tourism and housing, with the foreign exchange required to finance
Equity
-
substantial private-sector investments in tourism projects. IFC arranged a
Quasi-equity
-
syndicated loan with several financial institutions.
Syndications
51.51
Total
92.12
200.00
Société Ennasr de Pêche will acquire a fleet of four deep-freeze trawlers to
Loan
-
operate along Morocco's Atlantic Coast.
Equity
-
Quasi-equity
-
Syndications
-
Guarantee
4.83
Total
4.83
13.00
Multi-Country Loan Facilities (MLFs)
An MLF developed with NMB Postbank will provide foreign exchange
Loan
25.00
lending to small and medium-size projects in Chile, Indonesia, Malaysia,
Equity
-
and Uruguay.
Quasi-equity
-
Syndications
37.50
Total
62.50
62.50
An MLF developed with Algemene Bank Nederland will provide foreign exchange
Loan
25.00
lending to small and medium-size projects in Indonesia, Morocco, Pakistan,
Equity
-
Sri Lanka, and Turkey.
Quasi-equity
-
Syndications
25.00
Total
50.00
50.00
An MLF developed with Banque Indosuez will provide foreign exchange
Loan
25.00
lending to small and medium-size projects in Bangladesh, Malaysia, Pakistan,
Equity
-
Thailand, and Turkey.
Quasi-equity
-
Syndications
25.00
Total
50.00
50.00
71
The Year's Approvals
continued
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
Nigeria
IFC approved a loan to Afcott Nigeria Limited to help finance the expansion
Loan
4.50
of its cotton estate and the modernization of a ginnery. Afcott will also build an
Equity
-
oilseed processing plant on the cotton estate.
Quasi-equity
-
Syndications
-
Total
4.50
17.30
Intermatch Nigeria Ltd.
operates match manufacturing plants at Oregun
Loan
.96
and Sokoto. It intends to expand operations with a mill to produce tissue paper
Equity
-
using paper waste, which is available locally.
Quasi-equity
-
Syndications
-
Total
.96
3.10
IFC has arranged a financial restructuring of, and approved a subordinated
Loan
-
loan for, Tiger Battery Company (Nigeria) Limited * to reduce the company's
Equity
-
debt burden.
Quasi-equity
1.55
Syndications
.15
Total
1.70
1.70
Pakistan
First International Investment Bank will be one of the first private merchant banking
Loan
-
firms in Pakistan. It will be based in Lahore, with branch offices in Karachi and
Equity
.69
Islamabad. The company will provide specialized services, including money-market
Quasi-equity
-
operations, underwriting of securities issues, and corporate financial services.
Syndications
-
Total
.69
4.76
Pak-Suzuki Motor Company Ltd., the only assembler of passenger cars in
Loan
15.14
Pakistan, will establish a partially integrated car plant for engine and transmission
Equity
-
assembly, and the painting, stamping, and inspection of 30,000 automobiles and
Quasi-equity
-
light commercial vehicles per year.
Syndications
-
Total
15.14
92.60
Rupali Polyester Ltd. will add two 25,000-metric-ton polyester staple fiber lines
Loan
21.95
to increase its current output of 22,750 metric tons per year. The synthetic
Equity
2.55
fiber produced will be used by the local spinning industry to manufacture blended
Quasi-equity
-
polyester-cotton yarns.
Syndications
-
Total
24.51
89.00
Peru
Compañía de Minas Buenaventura S.A.* (Buenaventura) called for a capital
Loan
-
increase, for which IFC exercised its pre-emptive rights.
Equity
.60
Quasi-equity
-
Syndications
-
Total
.60
6.00
Philippines
The All Asia Capital and Leasing Corporation * has decided to double its capital
Loan
-
base through a rights issue in order to expand the volume of its leasing business
Equity
.26
and undertake more merchant banking activities.
Quasi-equity
I
Syndications
-
Total
.26
2.30
Avantex Mill Corporation will set up a new spinning mill to produce 4,500 tons
Loan
11.50
yearly of high-quality combed cotton yarn and 2,000 tons yearly of polyester/
Equity
2.24
cotton blended yarn, 70 percent of which will be exported either directly or via
Quasi-equity
-
the Philippines' growing exports of textiles and garments.
Syndications
-
Total
13.74
51.00
The First Philippine Fund is a non-diversified, closed-end management
Loan
-
company that invests in equity securities of Philippine companies.
Equity
I
Quasi-equity
-
Syndications
-
Underwriting
20.00
Total
20.00
100.00
72
Appendix D
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
IFC participated in a rights issue of common shares to finance General Milling
Loan
-
Corporation's* expansion program, which will almost double the company's
Equity
.64
production of food and animal feed.
Quasi-equity
-
Syndications
-
Total
.64
14.20
Luzon Petrochemical Corporation will build and operate the Philippines' first
Loan
65.00
integrated petrochemical complex, with capacities to produce annually 140,000
Equity
15.00
tons of polyethylene (PE), 110,000 tons of polypropylene (PP), and 90,000 tons
Quasi-equity
-
of surplus ethylene. Output from this project will be sold mainly in the domestic
Syndications
25.00
market to meet the growing demand for PE and PP resins.
Total
105.00
500.00
Makati Shangrila Hotel and Resort Inc. will construct a 697-room, five-star hotel
Loan
29.50
in a prime location in Makati, the business and shopping district of Manila. The
Equity
-
hotel will help alleviate the shortage of hotel rooms in Makati.
Quasi-equity
-
Syndications
29.50
Total
59.00
118.00
The Manila Fund is a five-year, closed-end fund seeking long-term capital
Loan
-
appreciation by investing mainly in equity securities listed on the Philippine
Equity
-
stock exchange. It is the first country fund ever for the Philippines.
Quasi-equity
-
Syndications
-
Underwriting
7.00
Total
7.00
50.00
Poland
The Bristol, Warsaw's most prestigious hotel, will be totally renovated
Loan
10.22
under a joint-venture privatization agreement with Trusthouse Forte and IFC.
Equity
-
Quasi-equity
-
Syndications
-
Total
10.22
36.20
The Export Development Bank (EDB) will manage a line of credit for IFC. It will
Loan
23.68
provide long-term loans and quasi-equity investments for private-sector and
Equity
-
cooperative projects too small for direct IFC financing. Projects will involve primarily
Quasi-equity
5.92
small, private manufacturing businesses and joint-venture companies that produce
Syndications
-
goods for export.t
Total
29.60
60.00
Portugal
A Jordanian company will build a plant in Portugal to formulate and distribute
Loan
2.00
pharmaceuticals there through a wholly owned subsidiary, AL HIKMA Farmaceûtica
Equity
-
(Portugal), Limitada.
Quasi-equity
-
Syndications
-
Total
2.00
6.00
Banco Português de Investimento (BPI)* made two new share offerings in which
Loan
-
IFC subscribed its pre-emptive rights.
Equity
2.03
Quasi-equity
-
Syndications
-
Total
2.03
72.35
Finantia Capital will provide equity and quasi-equity to finance the modernization,
Loan
-
expansion, and restructuring of medium-size private enterprises with a view to
Equity
4.00
their eventually making public share offerings.
Quasi-equity
-
Syndications
-
Total
4.00
30.00
73
The Year's Approvals
continued
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
The Portuguese Investment Fund is a new-money country fund that invests
Loan
-
primarily in equity securities listed on Portugal's stock exchanges.
Equity
-
Quasi-equity
-
Syndications
-
Underwriting
6.00
Total
6.00
30.50
Sociedade de Capital de Risco S.A.* made a new offering of shares in which IFC
Loan
-
subscribed its pre-emptive rights.
Equity
.02
Quasi-equity
-
Syndications
-
Total
.02
2.10
União Industrial Textil e Quimica S.A. will expand its chlorine production facilities
Loan
6.63
from 45,000 to 57,000 tons per year.
Equity
-
Quasi-equity
-
Syndications
-
Total
6.63
16.11
Thailand
IFC made an additional investment in The Mutual Fund Company, Ltd.,* an
Loan
-
investment management company.
Equity
.26
Quasi-equity
-
Syndications
-
Total
.26
3.20
IFC made an additional equity investment in Northeast Agriculture Company Ltd.
Loan
-
(NACO)* as part of a capital investment and private placement to finance a
Equity
.05
doubling of NACO's capacity.
Quasi-equity
-
Syndications
-
Total
.05
.41
Shin Ho Paper (Thailand) Co. Ltd. will establish the first newsprint paper mill in
Loan
22.00
Thailand, with annual capacity of 100,000 metric tons. The plant will use waste
Equity
5.08
paper, to be imported mostly from the United States, as its primary raw material.
Quasi-equity
-
Syndications
30.00
Total
57.08
108.00
Siam Asahi Technoglass Company will establish a plant to manufacture medium-
Loan
-
size color television glass bulb components. The plant will have the capacity to
Equity
8.06
produce 12 million funnels and 7.5 million panels annually for both domestic and
Quasi-equity
-
export markets.
Syndications
-
Total
8.06
313.00
Vinythai Company Ltd. will construct and operate facilities near Thailand's second
Loan
50.00
petrochemical complex at Map Ta Phut to produce annually 135,000 tons of
Equity
-
polyvinyl chloride and 140,000 tons of vinyl chloride monomer. The project will draw
Quasi-equity
I
ethylene from the petrochemical complex.
Syndications
100.00
Total
150.00
529.00
Togo
Togotex will acquire and rehabilitate Togo's two state-owned textile mills,
Loan
-
Togotex (Kara) and ITT (Dadja).
Equity
1.61
Quasi-equity
I
Syndications
-
Total
1.61
22.70
74
Appendix D
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
Turkey
IFC exercised its pre-emptive rights in the share capital increase of Anadolu
Loan
-
Cam Sanayii A.S. *# to finance the modernization of its container glass operations.
Equity
.10
Quasi-equity
-
Syndications
-
Total
.10
1.56
Conrad International will construct and operate a new 667-room international
Loan
18.00
deluxe hotel in Istanbul.
Equity
4.00
Quasi-equity
-
Syndications
24.00
Standby facility
3.00
Total
49.00
93.00
ISGEN Leasing* will lease medium-size and industrial equipment to Turkish
Loan
-
companies.
Equity
.23
Quasi-equity
-
Syndications
-
Total
.23
1.30
Kamelya Turism Islemecilik and Sol Hotels will build and operate a resort complex
Loan
9.47
with two 232-room, four-star hotels and a 333-room holiday village on the
Equity
-
southern coast of Turkey.
Quasi-equity
2.37
Syndications
-
Total
11.84
43.00
The Kepez Electric Company will build a 32 megawatt hydroelectric dam on the
Loan
25.00
Karacaoren River, upgrade its transmission facilities, and expand its hydroelectric
Equity
-
generating facilities.
Quasi-equity
-
Syndications
-
Total
25.00
67.60
Kiris Otelcilik ve Turizm A.S.* will complete, and add 74 rooms to, its five-star
Loan
5.26
resort hotel on Turkey's Mediterranean coast.
Equity
-
Quasi-equity
-
Syndications
-
Total
5.26
20.30
Koy-Tur will expand its production of poultry and animal feed operations.
Loan
8.60
Equity
4.00
Quasi-equity
-
Syndications
-
Total
12.60
25.90
Mersin Enternasyonal Otelcilik A.S. will build a 220-room, five-star Hilton hotel
Loan
8.50
located in Mersin, in southwestern Turkey.
Equity
-
Quasi-equity
I
Syndications
4.00
Total
12.50
25.00
IFC exercised its pre-emptive rights in the share capital increases of Nasas
Loan
-
Aluminyum Sanayii ve Ticaret A.S.* to support the company's efforts to
Equity
.05
improve its financial structure by increasing equity and reducing reliance on
Quasi-equity
I
short-term bank loans.
Syndications
-
Total
.05
14.67
Silkar Turism Yatirim ve Isletmeleri A.S.* will build a Club Robinson Holiday
Loan
8.29
Village and four-star hotel.
Equity
-
Quasi-equity
4.88
Syndications
9.47
Total
22.64
38.50
75
The Year's Approvals
continued
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
Simplot ve Besikcioglu A.S. will expand its French-fry processing facilities
Loan
9.50
from 30,000 to 60,000 tons per year for export to fast food chains in Europe.
Equity
-
Quasi-equity
-
Syndications
-
Total
9.50
47.33
The Turkish Investment Fund invests in Turkish equity securities listed on the
Loan
-
Istanbul Stock Exchange. The Fund is listed on the New York Stock Exchange.
Equity
-
Quasi-equity
-
Syndications
-
Underwriting
10.00
Total
10.00
60.00
Venezuela
Productora de Alcoholes Hidratados, C.A. (Pralca) will build a new ethylene
Loan
30.80
oxide/ethylene glycol plant alongside Lake Maracaibo. The project will export to
Equity
5.80
regional markets, and replace imports. It will produce annually 16,000 metric tons
Quasi-equity
-
of ethylene oxide and 66,000 metric tons of ethylene glycol.
Syndications
2.00
Standby facility
2.80
Total
41.40
142.50
Yugoslavia
Salonit Anhovo will build a glass-reinforced PVC water and sewage production
Loan
6.82
facility to replace its asbestos cement pipeline plant.
Equity
-
Quasi-equity
-
Syndications
-
Total
6.82
16.70
Zimbabwe
IFC will provide a loan to Mashonaland Holdings Limited to modernize and
Loan
4.44
expand its enameled copper wire operation. The project will improve quality,
Equity
-
reduce the scrap rate, and allow a greater range of wire sizes to be produced.
Quasi-equity
-
Syndications
-
Total
4.44
6.54
Mat Tools and Forging (Private) Limited, a new company, is building facilities
Loan
.44
on two sites to manufacture hand tools for the domestic and export markets,
Equity
.31
and tools and dies for its own use and for sale in local markets. The project
Quasi-equity
-
received technical assistance from APDF.
Syndications
-
Total
.75
3.80
IFC will become a 10 percent shareholder in RAL Merchant Bank and provide
Loan
14.95
a credit line for onlending to RAL's corporate clients for the acquisition of
Equity
2.90
capital imports.t
Quasi-equity
-
Syndications
-
Total
17.85
19.00
Retrofit (Private) Limited,
an electrical contracting firm in its third year
Loan
.29
of operations, is expanding facilities and strengthening technical and
Equity
.08
administrative staff.
Quasi-equity
I
Syndications
-
Total
.37
1.10
IFC will provide a credit line to Scotfin Limited, a finance company, for
Loan
7.50
hire-purchase operations, mostly in the commercial transport sector.t
Equity
-
Quasi-equity
-
Syndications
-
Total
7.50
7.50
76
Appendix D
Investments approved in fiscal year 1990
IFC's
Project
(US$ millions equivalent as of June 30, 1990)
Investment
Cost
IFC will syndicate medium-term, non-revolving, foreign exchange credit lines to
Loan
65.95
five Zimbabwean merchant and commercial banks. The credit lines will be used
Equity
-
for onlending to local export-oriented companies to finance the importation of
Quasi-equity
-
capital equipment. The banks are Barclays Bank of Zimbabwe Ltd. ($20 million),
Syndications
65.00
Merchant Bank of Central Africa Ltd. ($25 million), RAL Merchant Bank Ltd.
Total
130.95
130.95
($30 million), Standard Chartered Merchant Bank Ltd. ($30 million), and Syfrets
Merchant Bank Ltd. Zimbabwe ($25 million).t
Total loans
$1,209.46
Total equity
$162.04
Total quasi-equity
$95.08
Total syndications
$622.13
Total guarantees
$13.45
Total standby facilities
$25.80
Total underwritings
$72.65
Grand total
$2,200.61
$9,376.82
*
IFC has made one or more previous investments in this company.
Africa Enterprise Fund project.
t This project was undertaken jointly by the Capital Markets Department and the regional investment department.
# As a rights issue below $250,000, this project is not included in the total number of approvals.
Counts as one project.
77
International Finance Corporation
Investment Portfolio
June 30, 1990
Expressed in United States dollars (in thousands)
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Argentina
Alpargatas S.A.I.C
Textiles
FY77, 84, 86, 88
42,935
7,500
27,215
5,000
32,215
Alpesca, S.A.
Food and agribusiness
FY79, 83, 84
6,811
0
769
1,611
2,380
Arcor S.A.I.C
General manufacturing
FY88
12,000
0
12,000
0
12,000
Argentine Investment Company
Financial services
FY89
2,000
0
0
2,000
2,000
Astra-Compañía Argentina de
Petróleo S.A.
Energy
FY89
25,000
0
25,000
0
25,000
Astra-C.A.P.S.A. (Lindero Field)
Energy
FY88
12,375
0
10,125
0
10,125
Banco Francés del Rio de la Plata S.A.
Capital markets
FY89
15,000
0
15,000
0
15,000
Banco General de Negocios S.A.
Capital markets
FY88, 89
20,000
0
19,507
0
19,507
Banco Rio de la Plata, S.A.
Capital markets
FY88
30,000
0
30,000
0
30,000
Banco Roberts S.A.
Capital markets
FY86, 89
20,000
0
16,841
0
16,841
Bridas S.A.P.I.C.
Energy
FY88
20,625
0
11,625
0
11,625
Bunge y Born S.A.
General manufacturing
FY88
40,000
0
40,000
0
40,000
Celulosa Argentina, S.A.
Timber, pulp and paper
FY65, 72
8,250
4,000
120
0
120
Chihuidos Oil Exploration Program
Energy
FY89
4,950
0
0
4,950
4,950
Chirete/Morillo/Olleros Oil
Exploration Program
Energy
FY88
5,200
0
0
5,200
5,200
Compañía General de Inversiones
Financial services
FY89
100
0
0
100
100
Corporación de Inversiones
y Privatización S.A.
Financial services
FY90
75
0
0
75
75
Hidra Oil Development Project
Energy
FY87, 90
80,000
21,900
65,600
0
65,600
Ipako Industrias Petroquímicas
Argentinas S.A.
Chemicals and petrochemicals
FY78, 79, 82, 87
20,308
0
0
2,000
2,000
Juan Minetti S.A.
Cement and construction materials
FY78, 81, 82, 86, 87
35,500
67,500
16,424
0
16,424
Massuh S.A.
Timber, pulp and paper
FY78, 85, 87, 88
26,948
3,000
16,280
2,448
18,728
Petroquímica Cuyo S.A.I.C.
Chemicals and petrochemicals
FY84, 86
25,000
21,197
19,241
4,000
23,241
Petroquímica Ensenada S.A. (Petroken)
Chemicals and petrochemicals
FY90
20,000
0
20,000
0
20,000
Roberts Participaciones S.A. (Ropasa).
Capital markets
FY90
50
0
0
50
50
S.A. de Inversiones de Capital de
Riesgo (SADICAR)
Capital markets
FY86, 90
2,050
0
0
2,000
2,000
S.A. Garovaglio y Zorraquín
Chemicals and petrochemicals
FY87
13,000
0
11,917
0
11,917
Terminal 6 S.A.
Industrial services
FY87, 90
8,500
0
7,125
0
7,125
364,789
29,434
394,223
Bangladesh
Bata Shoe Company (Bangladesh)
Limited
General manufacturing
FY85, 86
3,551
1,415
2,376
509
2,886
Industrial Development Leasing
Company of Bangladesh Limited
Capital markets
FY85
3,187
0
2,268
157
2,425
Industrial Promotion and Development
Company of Bangladesh Limited
Development financing
FY80
1,051
0
0
1,051
1,051
4,644
1,717
6,362
Barbados
Caribbean Financial Services
Corporation
Capital markets
FY84
300
0
0
300
300
Town and Commercial Properties
Limited
Tourism
FY87
1,250
0
1,140
0
1,140
1,140
300
1,440
Bolivia
Banco Industrial, S.A.
Development financing
FY76, 88
10,550
0
10,000
0
10,000
Compañía Minera Concepción S.A.
Mining
FY87
1,200
0
200
400
600
Compañía Minera del Sur, S.A.
Nonferrous metals
FY90
10,000
0
7,000
3,000
10,000
Plasmar, S.A.
General manufacturing
FY73
400
0
0
100
100
17,200
3,500
20,700
Botswana
Botswana Development Corporation
Limited
Development financing
FY79, 85
607
0
0
607
607
ULC (Proprietary) Limited.
Capital markets
FY90
423
0
0
423
423
0
1,030
1,030
78
Appendix E
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Brazil
Amapa Florestal e
Celulose S.A.-AMCEL
Timber, pulp and paper
FY87
14,000
0
14,000
0
14,000
Bahia Sul Celulose, S.A.
Timber, pulp and paper
FY90
55,000
0
40,000
15,000
55,000
Banco Bozano, Simonsen
de Investimento S.A.
Capital markets
FY88
20,000
0
20,000
0
20,000
Banco Itaú S.A.
Capital markets
FY88
30,000
0
30,000
0
30,000
Brasilpar Comércio e
Participações S.A.
Capital markets
FY81
1,500
0
0
1,185
1,185
Brasital S.A. para a Indústria
e o Comércio
Textiles
FY88
100
0
100
0
100
Cebrace-Companhia Brasileira
de Cristal.
Industrial equipment and machinery
FY88
45,000
0
40,000
5,000
45,000
Cimento Caue S.A.
Cement and construction materials
FY82, 87
25,000
20,000
10,758
3,255
14,014
CIMINAS-Cimento Nacional
de Minas, S.A.
Cement and construction materials
FY72, 75, 81, 87
51,084
154,756
13,333
0
13,333
Companhia Alcoolquímica
Nacional-Alcoolquímica
Chemicals and petrochemicals
FY84
24,000
0
5,147
3,719
8,866
Companhia Brasileira de
Agropecuária-COBRAPE
Food and agribusiness
FY81
8,500
0
4,500
3,000
7,500
COPENE-Petroquímica do
Nordeste S.A.
Chemicals and petrochemicals
FY89, 90
45,000
5,000
45,000
0
45,000
Dende do Para S/A-DENPASA-
Agricultura, Indústria e Comércio
de Oleaginosas
Food and agribusiness
FY80
4,500
0
722
1,000
1,722
Duratex S.A.
Timber, pulp and paper
FY88
7,370
0
7,370
0
7,370
Eluma S.A. Indústria e Comércio
Nonferrous metals
FY89
15,000
0
15,000
0
15,000
Empresa de Desenvolvimento de
Recursos Minerais "CODEMIN" S.A.
Iron and steel
FY73, 78, 83
26,140
67,600
0
4,340
4,340
Equity Fund of Brazil
Financial services
FY88, 89,90
20,549
0
0
16,254
16,254
Fabrica Carioca de Catalisadores S.A.
Chemicals and petrochemicals
FY88
20,500
0
20,500
0
20,500
Fabrica de Tecidos Tatuape S.A.
Textiles
FY88
16,550
0
8,800
0
8,800
Hering do Nordeste S.A.-MALHAS.
Textiles
FY80
2,000
0
1
0
1
lochpe S/A-Arrendamento Mercantil
("IAM")
Capital markets
FY82
10,450
20,000
2,000
0
2,000
Minerações Brasileiras Reunidas S.A.
Iron and steel
FY88
20,000
0
20,000
0
20,000
Nitroclor Productos Químicos S.A.
Chemicals and petrochemicals
FY86, 88
8,700
0
1,200
5,700
6,900
Papel e Celulose Catarinense, S.A.
Timber, pulp and paper
FY89
19,561
2,631
15,000
0
15,000
Perdigão S.A. Comércio e Indústria
Food and agribusiness
FY88
20,000
0
20,000
0
20,000
Petroquímica Triunfo S.A.
Chemicals and petrochemicals
FY81, 87
19,106
31,000
3,562
3,065
6,627
PISA-Papel de Imprensa S.A.
Timber, pulp and paper
FY83, 85, 88
58,800
31,670
22,000
7,200
29,200
Polisul Petroquímica S.A.
Chemicals and petrochemicals
FY80, 81, 87
20,999
28,000
4,000
5,999
9,999
Politeno Linear Indústria e Comércio
de Productos
Chemicals and petrochemicals
FY89
25,000
0
18,500
6,500
25,000
PPH-Companhia Industrial
de Polipropileno
Chemicals and petrochemicals
FY80
33,000
0
16,009
1,643
17,651
Quimica da Bahia Indústria
e Comércio S.A.
Chemicals and petrochemicals
FY85
5,286
0
231
1,800
2,031
Santista Indústria Textile de
Sergipe S.A.
Textiles
FY88
4,500
0
3,200
1,300
4,500
São Paulo Alpargatas S.A.
Textiles
FY87
30,000
0
30,000
0
30,000
SOCOCO S/A-Agroindustrias
da Amazonia
Food and agribusiness
FY83
5,500
0
0
2,500
2,500
Sotave Amazonia Química e Mineral S/A Fertilizers
FY80, 83
28,000
13,000
14,200
0
14,200
S.A. Moinho Santista Indústrias Gerais.
Textiles
FY88
4,000
0
4,000
0
4,000
Tecanor S.A.-Textil Catarinense
do Nordeste
Textiles
FY76, 80
16,200
0
3
0
3
Toalia S.A. Industria Textil.
Textiles
FY88
1,900
0
1,900
0
1,900
Unibanco-União de Bancos
Brasileiros S.A.
Capital markets
FY88
30,000
0
30,000
0
30,000
Villares Indústrias de Base S.A.
-VIBASA
Iron and steel
FY80
5,000
0
833
0
833
481,870
88,460
570,330
Burundi
Verreries du Burundi, S.A.R.L.
General manufacturing
FY81, 82, 87
5,878
0
0
1,108
1,108
79
International Finance Corporation
Investment Portfolio
(continued)
June 30, 1990
Expressed in United States dollars (in thousands)
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Cameroon
Alucam-Compagnie Camerounaise
de l'Aluminum Pechiney-Ugine.
Nonferrous metals
FY79
7,932
0
0
932
932
Cotonnière Industrielle du Cameroun
(CICAM)
Textiles
FY86
2,981
0
3,581
0
3,581
Prestige Bottling Company
General manufacturing
FY88
3,036
0
2,990
302
3,292
Société Camerounaise de Minoteries
Food and agribusiness
FY81
1,308
0
140
0
140
Société Camerounaise de Verrerie
General manufacturing
FY81
1,802
0
0
102
102
Société des Palmeraies de la Ferme
Suisse, S.A.
Food and agribusiness
FY85
2,536
0
1,028
558
1,586
Société des Plantations Nouvelles
du Penja
Food and agribusiness
FY88
2,250
0
2,148
357
2,505
Société Industrielle Laitière
du Cameroun "SILAC"
Food and agribusiness
FY87
2,851
0
2,462
571
3,032
Société Sucrière du Cameroun.
Food and agribusiness
FY83
1,444
0
877
0
877
13,225
2,821
16,046
Chile
Cape Horn Methanol Ltd.
Chemicals and petrochemicals
FY86, 88
100,000
0
45,000
5,000
50,000
Celulosa Arauco y Constitución S.A.,
Timber, pulp and paper
FY87, 88
85,000
35,500
83,846
0
83,846
Celulosa del Pacífico, S.A.
Timber, pulp and paper
FY90
50,000
33,000
40,000
10,000
50,000
Compañía Chilena de Inversiones S.A.
Agente de Valores
Capital markets
FY82
200
0
0
120
120
Compañía de Carbones de Chile
COCAR S.A.
Mining
FY86
18,700
0
7,125
2,200
9,325
Empresa Minera de Mantos
Blancos S.A.
Nonferrous metals
FY58, 59, 66, 84
23,851
15,500
0
7,476
7,476
International Investment Company
of Chile S.A.
Financial services
FY89
3,750
0
0
3,750
3,750
Investment Management Company
Capital markets
FY88
60
0
0
60
60
Minera Escondida Limitada
Nonferrous metals
FY89
85,000
0
61,000
15,000
76,000
The Chile Investment Company S.A..
Financial services
FY88
4,650
0
0
4,650
4,650
236,971
48,256
285,227
China
China Bicycles Company Limited
General manufacturing
FY88
5,000
0
4,167
0
4,167
Crown (China) Electronics Co. Ltd.
General manufacturing
FY89
15,000
0
15,000
0
15,000
Guangzhou Peugeot Automobile
Company Ltd.
Automotive and accessories
FY86
18,225
0
14,063
3,225
17,288
JF China Investment Company Limited
Development financing
FY88
3,036
0
3,000
36
3,036
Shenzhen-Chronar Solar Energy Co., Ltd. General manufacturing
FY89
3,000
0
2,000
1,000
3,000
38,229
4,261
42,490
Colombia
Carbones del Caribe, S.A.
Mining
FY84, 87
14,782
0
11,844
0
11,844
Cementos Rioclaro S.A.
Cement and construction materials
FY84
16,000
11,473
1,240
1,400
2,640
Corporación Financiera del Norte
Development financing
FY69, 73
454
0
0
15
15
Corporación Financiera del Valle
Development financing
FY88, 89
9,784
0
5,000
4,784
9,784
Corporación Financiera Nacional
Development financing
FY62, 63, 85
8,042
0
0
52
52
Enka de Colombia, S.A.
Textiles
FY67, 70, 74,
85, 86, 87, 89
43,816
17,103
32,897
0
32,897
Frigoríficos Colombianos S.A.
Industrial services
FY83, 89
1,576
0
0
724
724
Leasing Bolivar, S.A.
Capital markets
FY81, 85, 87,
7,218
7,000
1,816
218
2,034
Petróleos Colombianos Limited
Energy
FY81, 82
6,750
9,259
1,790
3,435
5,225
Productos Derivados de la Sal, S.A.
(PRODESAL).
Chemicals and petrochemicals
FY87
7,180
0
5,077
1,180
6,257
Promotora de la Interconexión
de los Gasoductos de la Costa
Atlántica S.A.
Industrial services
FY77
18,000
7,000
10,000
2,000
12,000
San Fernando/Chucuri Oil Exploration
Program
Energy
FY86
5,000
0
0
4,185
4,185
69,664
17,992
87,656
Congo, People's Republic of the
Congolaise des Bois Impregnés, S.A.
Timber, pulp and paper
FY87
2,134
0
2,005
272
2,277
Congolaise Industrielle des Bois
(C.I.B.), S.A.
Timber, pulp and paper
FY85, 86
2,134
0
3,223
0
3,223
80
5,228
272
5,500
Appendix E
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Costa Rica
Matas de Costa Rica, S.A.
Food and agribusiness
FY83, 88
1,524
0
2,134
0
2,134
Scott Paper Company de
Costa Rica, S.A.
Timber, pulp and paper
FY78, 87
4,000
0
938
0
938
3,072
0
3,072
Côte d'Ivoire
Etablissements R. Gonfreville, S.A.
Textiles
FY77, 87
9,656
0
8,021
885
8,905
Industrial Promotion Services
(Côte d'Ivoire) S.A.
Capital markets
FY88
833
0
0
833
833
Omnium Chimique et Cosmétique
(COSMIVOIRE).
Food and agribusiness
FY87
2,129
0
1,716
0
1,716
Omnium de Transformations
Alimentaires S.A.
Food and agribusiness
FY90
834
0
684
174
858
Pêchazur, S.A.R.L.
Food and agribusiness
FY90
472
0
537
0
537
Société des Industries Alimentaires
et Laitières "SIALIM"
Food and agribusiness
FY88, 90
5,802
0
5,282
884
6,165
16,239
2,775
19,014
Cyprus
Dome Investments Limited
Tourism
FY83
2,058
0
0
274
274
Dominica
Fort Young (1986) Ltd.
Tourism
FY89
700
0
0
701
701
Dominican Republic
Cementos Nacionales, S.A.
Cement and construction materials
FY74, 81, 88
7,828
0
0
1,828
1,828
Compañía Dominicana de Leasing, S.A.
Capital markets
FY84
3,150
0
0
52
52
Productora Nacional de
Algodón, C. por A.
Food and agribusiness
FY83, 84, 89
2,936
2,400
1,363
728
2,091
Sociedad Comercializadora S.A.
Cement and construction materials
FY90
85
0
0
85
85
Transamerican Hoteles, Dechiaro,
Siskind, Vincent & Co. S. en C. por A. Tourism
FY87
6,000
0
5,633
0
5,633
Zona Franca San Isidro S.A.
Industrial services
FY90
6,000
0
6,000
0
6,000
12,996
2,692
15,688
Ecuador
Compañía Financiera Ecuatoriana
de Desarrollo, S.A.
Development financing
FY69, 73, 75, 77,
81, 82, 89
4,589
0
4,000
375
4,375
Facturas Internacionales S.A.
Capital markets
FY88
88
0
0
88
88
4,000
463
4,463
Egypt, Arab Republic of
Alexandria National Iron & Steel
Company S.A.E.
Iron and steel
FY84
38,400
64,000
0
7,200
7,200
Aluminum Sulphate Company of
Egypt S.A.E.
Chemicals and petrochemicals
FY86
565
0
0
565
565
Arab Ceramic Company S.A.
Cement and construction materials
FY76, 82
6,243
1,500
772
954
1,726
Bechtel Egypt S.A.E.
Industrial services
FY88
100
0
0
100
100
Crocodile Tourist Project
Company SAE
Tourism
FY82
5,131
0
650
721
1,371
Delta Sugar Company S.A.E.
Food and agribusiness
FY78, 83
15,506
8,000
5,000
3,506
8,506
Egypt Investment Finance
Corporation, S.A.E.
Capital markets
FY85
1,640
0
0
139
139
Ismailia Fish Farming Company, S.A.E.
Food and agribusiness
FY80, 81, 83
5,009
0
965
100
1,065
Ismailia Misr Poultry Company, S.A.E.
Food and agribusiness
FY79, 83
14,353
0
0
1,645
1,645
Meleiha Oil Development and
Exploration Project.
Energy
FY87, 88
28,700
0
0
17,821
17,821
Phoenix Resources Company of Egypt
Energy
FY88
20,000
0
12,800
0
12,800
Suez Cement Company S.A.E.
Cement and construction materials
FY80
30,000
0
4,289
0
4,289
24,476
32,752
57,229
Ethiopia
Red Sea Petroleum Exploration
Program
Energy
FY89
7,800
0
0
7,800
7,800
81
International Finance Corporation
Investment Portfolio
(continued)
June 30, 1990
Expressed in United States dollars (in thousands)
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Fiji
Capos Limited
Tourism
FY86
8,818
0
8,171
0
8,171
Fiji Forest Industries Limited
Timber, pulp and paper
FY87
3,627
0
1,989
1,638
3,627
Merchant Bank of Fiji Limited.
Capital markets
FY87
2,347
0
0
347
347
10,160
1,985
12,145
Gabon
Compagnie Minière de l'Ogooué
Mining
FY89
32,000
0
27,000
0
27,000
Elf Gabon.
Energy
FY90
10,000
0
10,000
0
10,000
Shell Gabon S.A.
Energy
FY89
50,000
110,000
50,000
0
50,000
Société de Placages d'Essassa S.A.,
Timber, pulp and paper
FY88
3,671
0
4,386
0
4,386
91,386
0
91,386
Gambia, The
Kombo Beach Hotel Limited
Tourism
FY84
2,823
0
4,623
0
4,623
Ghana
Ashanti Goldfields Corporation
(Ghana) Limited
Mining
FY85, 90
62,500
62,500
62,500
0
62,500
Canadian Bogosu Resources Limited
Mining
FY88, 89, 90
20,000
0
18,500
1,500
20,000
Continental Acceptances Limited
Capital markets
FY90
875
0
0
875
875
Ghanaian-Australian Goldfields Limited
Mining
FY90
3,000
0
0
3,000
3,000
Keta Basin Oil
Energy
FY90
0
0
0
2,900
2,900
Wahome Steel Limited
Iron and steel
FY90
3,200
0
3,200
0
3,200
84,200
8,275
92,475
Greece
Aluminium de Grèce, Société Anonyme
Industrielle et Commerciale
Nonferrous metals
FY70, 72
4,922
3,731
0
577
577
Grenada
Issa Nicholas (Grenada) Limited
Tourism
FY86
6,000
0
4,500
0
4,500
Guinea
Banque Internationale pour
le Commerce et l'Industrie
de la Guinée
Capital markets
FY87
1,000
0
0
1,000
1,000
Société Aurifère de Guinée S.A.
Mining
FY88
7,500
0
7,402
0
7,402
Société Mixte Aredor Guinée S.A.
Mining
FY83
14,835
0
6,200
1,228
7,428
13,602
2,228
15,830
Guinea-Bissau
Anetibene Petroleum Exploration
Program
Energy
FY90
5,850
0
0
5,850
5,850
Haiti
Promoteurs et Investisseurs
Associés, S.A.
Food and agribusiness
FY82
1,500
0
263
114
377
Honduras
Granjas Marinas
San Bernardo S.A. de C.V.
Food and agribusiness
FY87
575
0
0
575
575
Textiles Río Lindo, S.A. de C.V.
Textiles
FY78, 90
4,770
6,000
2,742
1,000
3,742
2,742
1,575
4,317
Hungary
AGROFERM Hungarian-Japanese
Fermentation Industry Ltd.
Food and agribusiness
FY87
11,250
0
8,550
2,700
11,250
Dexter Mold Making Company Limited
General manufacturing
FY90
3,893
0
3,006
922
3,928
Dunamont Polisztirolgyarto Rt
Textiles
FY89
17,209
11,375
15,430
3,735
19,165
First Hungarian Investment
Advisory Rt.
Financial services
FY90
36
0
0
36
36
Salgotarjan Glass Wool Limited
Industrial equipment and machinery
FY88
4,972
0
3,440
1,533
4,973
Tetra Pak Hungary Limited
Timber, pulp and paper
FY90
10,510
0
7,471
3,039
10,510
The First Hungary Fund Limited
Financial services
FY90
7,500
0
0
7,500
7,500
Unicbank Rt.
Capital markets
FY87
3,227
0
0
3,227
3,227
82
37,897
22,692
60,589
Appendix E
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
India
Ahmedabad Electricity Company,
Limited
Industrial services
FY89
19,455
0
21,384
0
21,384
Bihar Sponge Iron Limited
Iron and steel
FY85
15,440
0
16,651
630
17,280
Deepak Fertilisers and Petrochemicals
Corporation Limited
Fertilizers
FY80, 82, 87, 89
11,722
0
3,748
2,851
6,599
Export-Import Bank of India
Capital markets
FY87
15,000
0
14,174
0
14,174
Gujarat Narmada Valley Fertilizers
Company Limited
Fertilizers
FY87
33,911
0
39,192
0
39,192
Gujarat Rural Housing Finance
Corporation
Capital markets
FY87
195
0
0
195
195
Gujarat State Fertilizers
Chemicals and petrochemicals
FY89
27,161
0
30,039
0
30,039
Hero Honda Motors Limited
Automotive and accessories
FY87
7,738
0
7,453
0
7,453
Hindustan Motors Limited
Automotive and accessories
FY87
36,886
0
29,452
0
29,452
Housing Development Finance
Corporation Limited
Capital markets
FY78, 87
5,608
0
200
1,001
1,201
India Equipment Leasing Limited.
Capital markets
FY86
2,817
0
0
309
309
India Lease Development Limited
Capital markets
FY85, 90
5,786
0
0
786
786
Invel Transmissions Limited
Automotive and accessories
FY88
1,067
0
0
1,067
1,067
J.M. Share & Stock Brokers Private
Limited
Capital markets
FY90
430
0
0
430
430
Keltron Telephone Instruments Limited.
Industrial equipment and machinery
FY89, 90
394
0
0
394
394
Mahindra Ugine Steel Company, Ltd.
Iron and steel
FY64, 75, 79, 90
14,324
142
0
2,499
2,499
Mahindra & Mahindra Ltd.
Automotive and accessories
FY90
16,383
0
10,000
6,383
16,383
Modi Cement Limited
Cement and construction materials
FY85
13,047
0
22,241
0
22,241
Nagarjuna Coated Tubes Limited
Iron and steel
FY81
0
0
1,500
245
1,745
Nagarjuna Signode Limited
Iron and steel
FY86
0
0
1,173
300
1,473
Nagarjuna Steels Limited
Iron and steel
FY87
8,150
0
323
241
563
Tata Electric Companies
Industrial services
FY90
42,689
0
42,689
0
42,689
The Great Eastern Shipping
Company Limited
Industrial services
FY86
11,866
0
5,975
5,891
11,866
The Indian Rayon Corporation Limited.
Cement and construction materials
FY82, 87
14,554
0
4,118
0
4,118
The Tata Iron and Steel Company
Limited
Iron and steel
FY81, 86, 89
70,844
20,000
28,786
12,336
41,122
Titan Watches Limited
General manufacturing
FY87, 89, 90
22,174
0
20,539
510
21,050
UCAL Fuel Systems Limited
Automotive and accessories
FY90
628
0
0
628
628
WBI Advanced Technology.
General manufacturing
FY89
200
0
0
200
200
299,636
36,895
336,532
Indonesia
Bank Niaga
Capital markets
FY90
7,500
0
7,500
0
7,500
Nomura Jakarta Fund (NJF)
Capital markets
FY90
3,000
0
0
1,450
1,450
P.T. Astra International, Incorporated
Automotive and accessories
FY90
25,000
0
0
12,500
12,500
P.T. Asuransi Jiwa Dharmala Manulife
Capital markets
FY88
321
0
0
321
321
P.T. Bali Holiday Village
Tourism
FY88
9,325
2,000
3,063
0
3,063
P.T. Bank Umum Nasional
Capital markets
FY90
10,000
0
10,000
0
10,000
P.T. Jakarta International Hotel
Tourism
FY73, 89
5,498
7,000
0
2,664
2,664
P.T. Monterado Mas Mining
Mining
FY88
5,500
4,500
3,500
2,000
P.T. Papan Sejahtera
5,500
Capital markets
FY80
5,202
0
0
1,202
1,202
P.T. Private Development Finance
Company of Indonesia,
Development financing
FY74
483
0
0
362
362
P.T. Saseka Gelora Leasing
Capital markets
FY82, 85
3,371
2,000
0
371
371
P.T. Semen Andalas Indonesia
Cement and construction materials
FY80, 88
27,658
25,898
20,871
0
P.T. Unitex
20,871
Textiles
FY71
1,550
1,750
0
347
347
44,933
21,217
66,151
Jamaica
Eagle Merchant Bank of Jamaica
Limited
Capital markets
FY89
5,000
0
5,000
0
Jamaica Citizens Bank Limited
5,000
Capital markets
FY89
5,000
0
5,000
0
Jamaica Flour Mills Limited
5,000
Food and agribusiness
FY82
5,000
0
440
0
Mutual Security Bank Limited
440
Capital markets
FY89
5,000
0
5,000
0
St. Mary Banana Estates Limited
5,000
Food and agribusiness
FY87
4,660
0
3,701
879
The Falcon Fund (1985) Limited
4,580
Financial services
FY86
2,555
0
1,115
0
1,115
20,257
879
21,136
83
International Finance Corporation
Investment Portfolio
(continued)
June 30, 1990
Expressed in United States dollars (in thousands)
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Jordan
Al-Hikma Pharmaceuticals Company
General manufacturing
FY87
2,193
0
2,072
0
2,072
Jordan Lime and Silicate Brick
Industries Company Limited
Cement and construction materials
FY79, 85
3,848
0
1,539
0
1,539
Jordan Phosphate Mines Company
Limited
Fertilizers
FY75, 78, 82
38,229
50,000
3,556
0
3,556
7,166
0
7,166
Kenya
Bamburi Portland Cement Company
Limited
Cement and construction materials
FY82
4,430
0
1,642
0
1,642
Development Finance Company
of Kenya Limited
Development financing
FY80, 84
6,381
0
2,750
1,314
4,064
Diamond Trust of Kenya Limited
Capital markets
FY82
804
0
0
804
804
Equatorial Beach Properties Limited
Tourism
FY86
3,671
0
6,036
0
6,036
Industrial Promotion Services (Kenya)
Limited
Capital markets
FY82, 87
2,046
0
0
2,046
2,046
Kenya Commercial Finance Company
Limited
Capital markets
FY81
5,000
0
1,434
0
1,434
Leather Industries of Kenya Limited
General manufacturing
FY84
2,713
0
1,030
595
1,625
Panafrican Paper Mills (E.A.) Limited.
Timber, pulp and paper
FY70, 74, 77,
79, 81, 90
43,049
3,965
17,800
4,510
22,310
Rift Valley Textiles Limited.
Textiles
FY76
9,638
1,296
3,888
0
3,888
Tetra Pak Converters Limited.
Timber, pulp and paper
FY83
2,540
0
310
0
310
Tourism Promotion Services
(Kenya) Ltd.
Tourism
FY72
1,629
791
0
45
45
34,892
9,314
44,206
Korea, Republic of
Anam Industrial Company Limited
Industrial equipment and machinery
FY88
15,747
0
0
15,747
15,747
Gold Star Company, Ltd
General manufacturing
FY75, 76, 77, 79,
80, 84, 85, 87, 88
35,908
13,635
0
15,531
15,531
Hae Un Dae Development
Company, Ltd
Tourism
FY75, 90
3,957
0
0
1,207
1,207
Korea Development Investment
Corporation
Capital markets
FY83, 85
5,952
0
0
5,952
5,952
Korea Development Leasing
Corporation
Capital markets
FY77, 79, 87, 90
6,754
10,000
0
1,223
1,223
Korea Investment and Finance
Corporation
Capital markets
FY71, 74, 76, 79,
80, 82, 85, 89
8,509
0
0
6,920
6,920
Korea Long Term Credit Bank
Development financing
FY68, 74, 76, 77,
78, 80, 88, 90
32,478
8,938
0
22,005
22,005
Korea Securities Finance Corporation
Capital markets
FY75, 77, 80, 82, 84
8,392
0
0
2,014
2,014
Korea Zinc Company, Ltd.
Nonferrous metals
FY76, 86
26,612
0
4,736
5,612
10,348
Taihan Bulk Terminal Co., Ltd.
Industrial services
FY81
6,000
3,500
0
2,500
2,500
Tong Yang Nylon Company, Limited
Textiles
FY75, 88, 89
12,060
0
0
4,545
4,545
4,736
83,256
87,992
Liberia
Liberian Bank for Development
and Investment
Development financing
FY66, 77, 84
702
1
0
70
70
Liberian Timber and Plywood
Operation Company
Timber, pulp and paper
FY88
8,500
0
7,286
O
7,286
7,286
70
7,356
Madagascar
Financière d'Investissement ARO
Capital markets
FY90
283
0
0
283
283
La Cotonnière Antsirabé
(COTONA) S.A.
Textiles
FY86, 90
11,032
0
10,085
184
10,269
Les Pêcheries de Nossi Bé, S.A.
Food and agribusiness
FY84, 90
7,009
0
4,952
249
5,202
Société Textile de Majunga S.A.
Textiles
FY77, 87
15,026
0
3,550
309
3,859
18,588
1,025
19,613
84
Appendix E
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Malawi
David Whitehead and Sons (Malawi) Ltd
Textiles
FY76, 82
10,784
0
1,868
0
1,868
Dwangwa Sugar Corporation Limited
Food and agribusiness
FY77, 81, 85
11,306
0
6,643
0
6,643
Ethanol Company Limited
Chemicals and petrochemicals
FY81, 82
2,458
0
199
245
444
Investment and Development
Bank of Malawi Limited
Development financing
FY79
605
0
0
605
605
The Leasing and Finance Company
of Malawi, Limited
Capital markets
FY86, 90
858
0
0
186
186
Viphya Plywoods and Allied Industries
Limited
Timber, pulp and paper
FY87
4,427
0
3,907
500
4,407
12,618
1,537
14,154
Malaysia
South East Asia Venture Investment
Project (SEAVI)
Capital markets
FY85
1,000
0
0
812
812
Twenty First Century Oleochemicals
Sdn. Bhd.
Chemicals and petrochemicals
FY90
5,238
3,400
4,500
738
5,238
4,500
1,550
6,050
Mauritius
Saxon Management Limited
and Saxon Properties Limited
Tourism
FY90
3,605
0
2,686
984
3,670
Socota Textile Mills Ltd.
Textiles
FY87
5,993
0
4,643
993
5,636
Textile Industries Limited
Textiles
FY90
3,100
0
3,100
0
3,100
10,428
1,977
12,406
Mexico
Agro Industrial Exportadora,
S.A. de C.V.
Food and agribusiness
FY87
2,001
0
357
0
357
Apasco, S.A. de C.V.
Cement and construction materials
FY88, 89, 90
56,250
0
10,250
0
10,250
Banca Serfin, S.N.C.
Development financing
FY89
60,000
0
60,000
0
60,000
Banco Nacional de México, S.N.C.
Capital markets
FY90
60,000
0
60,000
0
60,000
Bancomer, S.N.C.
Capital markets
FY90
20,000
0
20,000
0
20,000
Celulosa y Papel de Durango,
S.A. de C.V.
Timber, pulp and paper
FY86, 89
13,069
0
10,000
3,069
13,069
Cementos Veracruz, S.A.
Cement and construction materials
FY73, 79
11,352
4,500
446
0
446
Cemex Group
Cement and construction materials
FY89
60,000
8,000
60,000
0
60,000
Conductores Monterrey, S.A.
Industrial equipment and machinery
FY79
5,000
13,000
4,496
0
4,496
Crescent Market Aggregates Project.
Mining
FY88
37,000
0
14,000
0
14,000
Empresas Tolteca de México, S.A.
Cement and construction materials
FY79, 84
37,950
138,000
4,412
3,427
7,839
Fomento Económico Mexicano
S.A. de C.V. (Visa)
General manufacturing
FY89, 90
107,600
0
80,000
27,600
107,600
Grupo Condumex S.A. de C.V.
General manufacturing
FY90
35,000
15,000
35,000
0
35,000
Grupo Primex, S.A. de C.V.
Chemicals and petrochemicals
FY85
12,000
4,400
2,000
0
2,000
Hotel Camino Real Ixtapa, S.A.
Tourism
FY79, 81, 87
4,201
0
0
4,198
4,198
Indelpro, S.A. de C.V..
Chemicals and petrochemicals
FY90
27,000
3,000
27,000
0
27,000
Industrias Sulfamex, S.A. de C.V.
Fertilizers
FY87
2,500
0
1,900
500
2,400
Metalsa, S.A.
Automotive and accessories
FY84, 88
9,400
0
5,750
0
5,750
Papeles Ponderosa, S.A.
Timber, pulp and paper
FY79, 81, 84
11,157
4,500
340
0
340
Polimar, S.A. de C.V.
Chemicals and petrochemicals
FY89
14,500
0
14,500
0
14,500
Proteison, S.A. de C.V.
Food and agribusiness
FY85
2,770
0
0
820
820
Salumi, S.A. de C.V.
Food and agribusiness
FY88, 90
22,516
0
17,516
2,000
19,516
Sealed Power de Mexico, S.A. de C.V.
and Spimex, S.A. de C.V.
Automotive and accessories
FY88
9,000
0
7,500
0
7,500
Universal de Valores, S.A. de C.V.
Food and agribusiness
FY81
9,300
5,000
497
1,670
2,167
Vidrio Plano de México, S.A.
and Vitro Flotado, S.A.
Industrial equipment and machinery
FY80
15,000
99,900
3,000
0
3,000
438,964
43,284
482,248
85
International Finance Corporation
Investment Portfolio
(continued)
June 30, 1990
Expressed in United States dollars (in thousands)
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Morocco
Banque Nationale pour le
Développement Economique
Development financing
FY63, 78, 84, 86
46,690
40,240
44,425
1,544
45,970
Cimenterie Nouvelle de Casablanca
-Cinouca, S.A.
Cement and construction materials
FY82, 83
17,844
0
5,925
2,044
7,969
Compagnie Maritime
Maroco-Norvégienne (COMARIT)
Industrial services
FY89
4,300
2,000
3,991
0
3,991
Crédit Immobilier et Hôtelier
Development financing
FY87, 90
67,150
78,304
66,199
0
66,199
Fruitière Marocaine de Transformation
"FRUMAT"
Food and agribusiness
FY86
7,583
0
5,327
0
5,327
Settat Filature "SETAFIL"
Textiles
FY88
4,864
0
3,378
919
4,298
Société Minière du Bou-Gaffer
"SOMIFER"
Nonferrous metals
FY80
15,335
0
0
2,348
2,348
129,246
6,855
136,101
Mozambique
Companhia Agro-Industrial
Lonrho-Moçambique Limitada
Food and agribusiness
FY87
2,500
0
2,000
0
2,000
Xai Xai
Energy
FY88
7,750
0
0
5,237
5,237
2,000
5,237
7,237
Nepal
Nepal Orind Magnesite (Private) Limited
Mining
FY82
4,966
0
8,716
0
8,716
Soaltee Hotel Limited.
Tourism
FY75
3,128
0
0
428
428
8,716
428
9,144
Niger
Les Moulins du Sahel, S.A.
Food and agribusiness
FY82
2,267
0
2,404
0
2,404
Nigeria
Afcott Nigeria Limited.
Food and agribusiness
FY90
4,500
0
4,500
0
4,500
Arewa Textiles, Ltd.
Textiles
FY64, 67, 70
847
728
0
442
442
Dunlop Nigerian Industries Limited
Automotive and accessories
FY88
12,500
0
12,500
0
12,500
Ikeja Hotel Limited
Tourism
FY81, 85, 88, 90
13,051
0
9,135
1,459
10,593
Nigerian Textile Mills Limited
Textiles
FY80, 87, 90
23,490
0
2,862
0
2,862
Tiger Battery Company (Nigeria)
Limited
General manufacturing
FY85, 90
4,397
2,429
6,308
0
6,308
35,305
1,901
37,206
Oman
Oman Development Bank S.A.O.G.
Development financing
FY79
2,029
0
0
1,014
1,014
Pakistan
Attock Refinery Limited.
Energy
FY79, 82, 84
8,357
7,500
0
607
607
Dawood Hercules Chemicals, Ltd.
Fertilizers
FY69, 89
21,223
0
17,300
2,923
20,223
First International Investment Bank
Limited
Capital markets
FY90
683
0
0
683
683
Habib Arkady Limited
Food and agribusiness
FY81
3,315
0
2,100
165
2,265
Hala Spinning Limited
Textiles
FY89
3,217
0
2,992
0
2,992
Mari Gas Company Limited
Energy
FY86
24,982
21,543
5,144
0
5,144
Millat Tractors Limited
Industrial equipment and machinery
FY88
4,898
0
5,539
0
5,539
Packages Limited
Timber, pulp and paper
FY65, 80, 82, 87, 88
16,932
10,087
6,188
620
6,808
Pakistan Industrial Credit and
Investment Corporation Limited
Development financing
FY63, 69, 75, 89
3,629
0
0
592
592
Pakistan Oilfields Limited
Energy
FY79, 82, 84
8,183
7,000
0
1,028
1,028
Pakistan Petroleum Limited
Chemicals and petrochemicals
FY83, 85
26,856
79,200
13,810
1,560
15,370
Pak-Suzuki Motor Company Limited.
Automotive and accessories
FY90
15,559
0
15,559
0
15,559
Rupali Polyester Limited
Textiles
FY90
22,097
0
20,097
2,000
22,097
Thatta Exploration Project
Energy
FY87
6,800
0
0
1,607
1,607
88,728
11,784
100,513
Panama
Banco Latinoamericano
de Exportaciones, S.A.
Capital markets
FY79, 85, 86, 88
49,827
0
12,750
2,500
15,250
Vidrios Panameños, S.A.
General manufacturing
FY78
3,800
0
0
640
640
12,750
3,140
15,890
86
Appendix E
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Paraguay
Empresa Hotelera de Encarnación S.A.
Tourism
FY81, 86
1,450
0
135
280
415
Sociedad Agrícola Golondrina S.A.
Food and agribusiness
FY82, 90
7,358
0
3,578
0
3,578
3,713
280
3,993
Peru
Compañía de Cemento Pacasmayo, S.A. Cement and construction materials
FY64, 67
248
1,357
0
91
91
Compañía de Minas Buenaventura, S.A. Mining
FY79, 83, 86
8,060
0
0
2,060
2,060
Compañía de Minas Orcopampa, S.A..
Mining
FY86
9,000
0
6,000
0
6,000
Compañía Minera San Ignacio
de Morococha, S.A.
Nonferrous metals
FY80, 85
7,200
0
0
500
500
Consorcio Energético
de Huancavelica, S.A.
Industrial services
FY82
4,500
0
1,732
0
1,732
S.A. Minera Regina
Nonferrous metals
FY85
5,240
0
1,500
240
1,740
9,232
2,891
12,123
Philippines
Acoje Mining Company, Inc.
Mining
FY77, 85
3,721
0
1,342
0
1,342
All Asia Capital and Leasing
Corporation (AACL)
Capital markets
FY80, 83, 85,
5,848
6,000
1,413
656
2,069
BPI Agricultural Development Bank
Development financing
FY88
976
0
0
976
976
Davao Union Cement Corporation
Cement and construction materials
FY81
16,000
0
3,503
0
3,503
General Milling Corporation
Food and agribusiness
FY79, 90
5,730
0
0
1,730
1,730
Hambrecht & Quist Venture
Capital Fund
Capital markets
FY89
2,417
0
0
2,326
2,326
Manila Electric Company
Industrial services
FY89
36,926
2,958
25,932
0
25,932
Maria Cristina Chemical Industries, Inc.
Iron and steel
FY74, 79
2,190
0
0
436
436
NDC-Guthrie Plantations, Inc.
Food and agribusiness
FY82
11,000
0
11,000
0
11,000
Philippine Associated Smelting
and Refining Corporation
Nonferrous metals
FY81
5,000
0
0
5,000
5,000
Philippine Long Distance Telephone
Company
Industrial services
FY70, 82, 87, 88, 90
88,530
40,000
84,000
0
84,000
Pure Foods Corporation
Food and agribusiness
FY86
1,391
0
0
1,390
1,390
127,190
12,513
139,703
Poland
Centrala Spoldzielni Ogrodniczych
Pszczelarskich (Hortex)
Food and agribusiness
FY89
15,044
0
17,432
0
17,432
Export Development Bank
Financial services
FY90
30,055
0
30,055
0
30,055
47,487
0
47,487
Portugal
Banco Português de Investimento
Development financing
FY82, 85, 87,
88, 89, 90
22,655
2,000
8,000
3,410
11,410
Finantia Capital Sociedade
de Capital de Risco S.A
Capital markets
FY90
4,000
0
0
4,000
4,000
Finantia-Sociedade de
Investimentos, S.A.
Capital markets
FY88, 89
1,239
0
0
996
996
Inter-Risco-Sociedade de Capital
de Risco S.A.
Capital markets
FY90
22
0
0
265
265
União Industrial Textil e Quimica, S.A.
Chemicals and petrochemicals
FY89
6,629
0
6,629
0
6,629
14,629
8,671
23,299
Rwanda
Société Rwandaise des Allumettes
(SORWAL) S.A.R.L.
Timber, pulp and paper
FY88
197
0
0
197
197
Senegal
Africamer S.A.
Food and agribusiness
FY90
3,454
0
3,581
0
3,581
African Seafood S.A.
Food and agribusiness
FY86, 88, 89
4,201
0
2,993
950
3,943
Banque de l'Habitat du Sénégal S.A.
Capital markets
FY80
465
0
0
465
465
Industries Chimiques du Sénégal, S.A..
Fertilizers
FY82, 88
37,145
0
13,800
145
13,945
20,374
1,560
21,933
Seychelles
Ailee Development Corporation Ltd.
Tourism
FY87
9,132
0
10,672
0
10,672
87
International Finance Corporation
Investment Portfolio
(continued)
June 30, 1990
Expressed in United States dollars (in thousands)
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Sierra Leone
Sierra Cement Manufacturing
Company, Limited-"SERACEM"
Cement and construction materials
FY80
2,050
0
2,050
0
2,050
Somalia
Somali Bag Company Limited
General manufacturing
FY85
976
0
1,103
0
1,103
Somali Molasses Company Limited
Industrial services
FY81
375
0
69
0
69
1,172
0
1,172
Spain
Sociedad Española de Financiación
de la Innovación, S.A.
Capital markets
FY78
877
0
0
346
346
Sri Lanka
Bank of Ceylon
Capital markets
FY78, 81
7,000
0
2,022
0
2,022
Development Finance Corporation
of Ceylon.
Development financing
FY78, 80, 83
457
0
0
457
457
Taj Lanka Hotels Limited
Tourism
FY81
8,900
11,100
1,800
650
2,450
Union Assurance Limited
Capital markets
FY88
485
0
0
485
485
3,822
1,592
5,414
Sudan
Cotton Textile Mills, Ltd.
Textiles
FY76
9,979
0
871
0
871
Gezira Managil Textile Company Limited Textiles
FY78
8,083
0
669
0
669
1,540
0
1,540
Swaziland
Natex Swaziland Limited
Textiles
FY88
8,770
0
5,000
1,771
6,771
Spintex Holdings Swaziland
Textiles
FY90
3,726
0
0
3,726
3,726
Swaziland Industrial Development
Company Limited
Development financing
FY87, 89
3,000
0
2,300
700
3,000
The National Textile Corporation
of Swaziland Limited
Textiles
FY85
2,202
0
1,233
0
1,233
The Royal Swaziland Sugar
Corporation Limited
Food and agribusiness
FY78, 86
10,429
0
0
461
461
8,533
6,658
15,191
Tanzania
Amboni Limited.
Food and agribusiness
FY85
4,379
712
2,770
0
2,770
Highland Soap and Allied Products
Limited
General manufacturing
FY78
1,741
0
472
0
472
Tanganyika Sisal Spinning Company
Limited
Food and agribusiness
FY90
2,000
0
2,000
0
2,000
5,242
0
5,242
Thailand
HMC Polymers Company Limited
Chemicals and petrochemicals
FY88
16,499
11,000
15,000
1,497
16,497
National Petrochemical Corporation
Limited
Chemicals and petrochemicals
FY84, 86, 88, 89
35,512
0
35,000
512
35,512
Northeast Agriculture Company
Limited
Food and agribusiness
FY87, 90
2,147
0
1,744
517
2,261
Peroxythai Limited
Chemicals and petrochemicals
FY89
10,700
0
10,700
0
10,700
Phansrivivat Company, Ltd
Food and agribusiness
FY88
4,673
0
3,600
1,074
4,674
Sea Minerals Limited
Nonferrous metals
FY83
556
0
0
482
482
Siam Asahi Technoglass Co., Ltd.
General manufacturing
FY90
2,353
0
0
2,353
2,353
Siam City Cement Co., Ltd.
Cement and construction materials
FY79, 81, 85, 87
56,169
68,000
0
2,860
2,860
Siam Commercial Bank (SCB)
Development financing
FY90
15,000
0
0
15,000
15,000
The Mutual Fund Company Limited
Financial services
FY77, 90
554
0
0
554
554
The Siam Cement Co., Ltd.
Cement and construction materials
FY69, 76, 78, 80, 85
16,878
15,874
0
1,422
1,422
The Thai Farmers Bank Limited
Development financing
FY90
5,000
0
0
5,000
5,000
66,044
31,271
97,315
Togo
Ducros-Togo, S.A.
Food and agribusiness
FY88
1,303
0
1,522
0
1,522
Société Togolaise de Sidérurgie, S.A.
Iron and steel
FY88
850
0
815
0
815
Togotex International S.A.
Textiles
FY90
1,611
0
0
1,611
1,611
88
2,336
1,611
3,948
Appendix E
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Trinidad and Tobago
The Home Mortgage Bank.
Capital markets
FY87
411
0
0
411
411
Trinidad and Tobago Development
Finance Company Limited
Development financing
FY89
469
0
0
471
471
Trinidad Nitrogen Company Limited
Fertilizers
FY87
34,930
150,000
28,376
0
28,376
28,376
882
29,258
Tunisia
Adwya S.A.
General manufacturing
FY87
2,390
0
2,480
286
2,766
Banque de Développement
Economique de Tunisie
Development financing
FY66, 70, 78
2,305
0
0
2,305
2,305
Banque Nationale de Développement
Touristique
Development financing
FY69
9,081
1,167
0
2,248
2,248
Comète Engineering
Industrial services
FY87
38
0
0
38
38
Industries Chimiques du Fluor, S.A.
Nonferrous metals
FY74
640
0
0
640
640
Rozzi Edilizzia Industrializzata
de Tunisie "REIT"
Industrial equipment and machinery
FY87
1,565
0
1,364
415
1,779
Société des Industries Textiles
Réunies, S.A.
Textiles
FY88
4,393
0
2,686
2,146
4,831
Société Industrielle des Textiles (SITEX)
Textiles
FY86
8,211
0
4,063
2,152
6,214
Société Minière de Spath Fluor
et Barytine "Fluobar"
Mining
FY85
245
0
0
245
245
Société Tunisienne de Leasing
"Tunisie Leasing", S.A.
Capital markets
FY85, 86
3,938
0
497
0
497
Sociétés d'Etudes et de Développement
de Sousse Nord
Tourism
FY73, 75
3,161
0
0
631
631
11,088
11,107
22,195
Turkey
Anadolu Cam Sanayii A.S
Industrial equipment and machinery
FY70, 86, 87, 88, 90
19,552
3,294
10,328
2,054
12,382
Cam Elyaf Sanayii A.S.
Industrial equipment and machinery
FY86
7,942
0
7,913
0
7,913
Dusa Endustriyel Iplik Sanayi
Textiles
FY89
17,000
8,000
17,000
0
17,000
Elginkan Holding A.S.
General manufacturing
FY88
16,454
0
17,432
0
17,432
Eska Turism ve Ticaret A.S.
Tourism
FY86, 89
9,078
0
9,978
0
9,978
Guney Sanayi ve Ticaret Isletmeleri A.S.
Textiles
FY87
16,478
0
17,457
0
17,457
Is Genel Finansal Kiralama A.S.
Capital markets
FY88, 90
536
0
0
536
536
Isko Testil Sanayi ve Ticaret A.S.
Textiles
FY89
32,266
0
38,847
0
38,847
Kamelya Turizm Isletmecilik
Ticaret A.S.
Tourism
FY90
11,844
0
12,022
0
12,022
Kiris Otelcilik Ve Turizm A.S.
Tourism
FY89, 90
13,029
0
14,514
0
14,514
Kirklareli Cam Sanayii A.S.
General manufacturing
FY81, 89
30,450
1,955
22,442
0
22,442
Man Kamyon ve Otobus Sanayi A.S.
Automotive and accessories
FY85
6,466
0
8,016
0
8,016
Mersin Enternasyonal Otelcilik, A.S.
Tourism
FY90
8,500
4,000
8,500
0
8,500
M.A.N. Motor Sanayi ve Ticaret A.S
Automotive and accessories
FY82
7,886
0
4,082
0
4,082
Pinar Entegre et ve Yem Sanayii A.S..
Food and agribusiness
FY84
3,900
0
1,671
0
1,671
Ram Dis Ticaret A.S.
Capital markets
FY89
3,249
1,505
3,697
0
3,697
Sanko Santral Konfeksiyon ve
Ticaret A.S.
General manufacturing
FY89
6,223
0
7,213
0
7,213
Santral Dikis Sanayii A.S.
Textiles
FY89
7,338
0
8,415
0
8,415
Sariville Turistik Tesisler A.S.
Tourism
FY89
4,811
0
3,006
2,151
5,157
Silkar Turizm Yatirim ve Isletmeleri A.S.
Tourism
FY86, 90
18,984
9,601
14,679
4,893
19,572
Simplot-Besikcioglu A.S.
French Fries (SB).
Food and agribusiness
FY90
9,000
0
9,000
0
9,000
Trakya Cam Sanayii A.S.
Industrial equipment and machinery
FY79, 81, 83, 84, 89
62,495
31,395
38,061
7,133
45,194
Turk Dis Ticaret Bankasi A.S.
Capital markets
FY89
12,500
47,500
12,500
0
12,500
Turkiye Sinai Kalkinma Bankasi, A.S
Development financing
FY64, 67, 69, 72,
73, 75, 76, 77
19,742
45,028
0
2,698
2,698
Uluslararasi Endustri ve Ticaret
Bankasi A.S.
Financial services
FY85, 88
15,000
45,000
15,000
0
15,000
Viking Kagit ve Seluloz, A.S.
Timber, pulp and paper
FY70, 71, 82, 83
3,323
0
0
823
823
Yeditepe Beynelmilel Otelcilik
Turizm ve Ticaret A.S.
Tourism
FY90
25,000
24,000
21,000
4,000
25,000
322,773
24,289
347,062
89
International Finance Corporation
Investment Portfolio
(continued)
June 30, 1990
Expressed in United States dollars (in thousands)
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Uganda
Development Finance Company
of Uganda Limited
Development financing
FY85
375
0
0
376
376
Sugar Corporation of Uganda
Food and agribusiness
FY84
8,000
0
8,000
0
8,000
The Toro and Mityana Tea Company
Limited
Food and agribusiness
FY84
1,123
500
439
0
439
Uganda Tea Corporation Limited
Food and agribusiness
FY85
2,808
0
3,139
0
3,139
11,578
376
11,954
Uruguay
Astra Pesquerías Uruguayas S.A.
Food and agribusiness
FY79, 83, 86, 89, 90
10,042
0
7,330
0
7,330
Azucitrus S.A.
Food and agribusiness
FY85
9,972
0
8,606
2,400
11,006
Migranja S.A.
Food and agribusiness
FY90
4,350
0
2,350
2,000
4,350
Sur Invest Casa Bancaria S.A.
Capital markets
FY89
12,586
10,000
730
1,786
2,516
19,015
6,186
25,202
Venezuela
C.A. Venzolana de Cementos
Cement and construction materials
FY88
10,000
0
10,000
0
10,000
Operaciones al Sur del Orinoco
Iron and steel
FY89
37,375
35,750
37,375
0
37,375
Polipropileno de Venezuela
Chemicals and petrochemicals
FY89
33,000
14,000
40,000
0
40,000
87,375
0
87,375
Yemen Arab Republic
Marib Agriculture Company, Y.S.C.
Food and agribusiness
FY87
2,703
0
2,400
0
2,400
National Company for Vegetable Oil
and Ghee Industries Limited
Food and agribusiness
FY85
4,652
0
3,557
0
3,557
Yemen Battery Manufacturing
Company, Y.S.C.
General manufacturing
FY84, 85
3,797
349
3,250
0
3,250
Yemen Hunt Oil Company
Energy
FY86
9,000
0
1,125
0
1,125
10,332
0
10,332
Yugoslavia
Belisce-Bel Tvornica Papira,
Poluceluloze i Kartonaze-Belisce.
Timber, pulp and paper
FY73, 81
30,976
39,889
6,670
0
6,670
Ina-Naftaplin
Energy
FY85
28,873
8,909
9,574
0
9,574
Industrija Za Avtomobilski Delovi
Traktori-"Ruen" Kocani
Automotive and accessories
FY82
10,631
0
7,258
0
7,258
Institut Za Fizikalnu Medicinu I
Rehabilitaciju-Dr. Simo
Milosevic-Igalo
Industrial services
FY82
19,149
0
16,903
0
16,903
Investiciona Banka Titograd-Udruzena
Banka
Tourism
FY80
21,000
0
5,000
0
5,000
ISKRA
Industrial equipment and machinery
FY85, 89
22,668
10,600
23,751
0
23,751
Jugobanka-Udruzena Banka Beograd
Financial services
FY86
25,445
10,360
26,413
0
26,413
Ljubljanska Banka-Zdruzena Banka
Financial services
FY83, 86
71,149
30,117
62,960
0
62,960
Radoje Dakic
Industrial equipment and machinery
FY80
18,700
0
4,675
0
4,675
Salonit Anhovo Industrija Grad
Materiala
Cement and construction materials
FY90
7,500
0
7,901
0
7,901
Small-Scale Enterprise Project
(Loan to Eight Banks)
Financial services
FY80
26,000
4,233
5,797
0
5,797
Sour Energoinvest
Industrial equipment and machinery
FY85
15,180
0
13,088
0
13,088
Tovarna Avtomobilov in Motorjev
Maribor.
Automotive and accessories
FY71, 80, 87
35,390
869
28,332
0
28,332
Tovarna Avtopnevmatike
"Sava-Semperit"
Automotive and accessories
FY72, 78, 80, 88
26,815
1,341
15,028
0
15,028
Tvornica Kartona I Ambalaze Cazin
Timber, pulp and paper
FY77
10,821
7,366
4,448
0
4,448
UNIAL-Tovarna Glinice in Aluminija
Boris Kidric.
Nonferrous metals
FY86
35,603
0
39,252
0
39,252
Vojvodjanska Banka-Udruzena Banka
Financial services
FY87, 89
51,940
31,094
56,666
0
56,666
333,715
0
333,715
90
Appendix E
Original
Investment held for the Corporation
Commitments¹
(including undisbursed balances)
Country, region
Fiscal years in which
Total
Total
Equity
Total loans
or other area and obligor
Sector
commitments were made
IFC
Syndications
Loans
(at cost)
and equity
Zaire
Grands Hôtels du Zaire, S.Z.A.R.L.
Tourism
FY85
15,000
0
10,500
0
10,500
Société Financière de Développement
Development financing
FY70, 85
1,297
0
0
1,297
1,297
Société Textile de Kisangani, S.Z.A.R.L
Textiles
FY85
9,065
0
9,375
575
9,950
Utexafrica, S.P.R.L. and Usines Textiles
Cotonnières de Kinshasa (Utexco),
S.Z.A.R.L.
Textiles
FY88
12,909
0
14,258
0
14,258
34,133
1,872
36,005
Zambia
Gwembe Valley Development
Company Limited
Food and agribusiness
FY88
4,500
0
3,700
800
4,500
Kafue Textile of Zambia Limited
Textiles
FY80, 85
10,746
0
11,296
0
11,296
Masstock (Zambia) Limited.
Food and agribusiness
FY89
8,000
0
8,000
0
8,000
Zambia Bata Shoe Company Limited
General manufacturing
FY72, 73
1,146
1,131
0
228
228
Zambia Consolidated Copper Mines
Limited
Nonferrous metals
FY80, 82
45,142
8,000
23,382
0
23,382
Zambia Hotel Properties Limited
Tourism
FY84
7,500
13,509
7,031
0
7,031
53,410
1,028
54,438
Zimbabwe
Crest Breeders International (Private)
Limited
Food and agribusiness
FY86
5,805
0
4,689
625
5,314
Mashonaland Holdings Limited
General manufacturing
FY90
4,568
0
4,568
0
4,568
Retrofit (Private) Limited
Industrial services
FY90
357
0
290
67
357
Scotfin Limited
Capital markets
FY90
7,500
0
7,500
0
7,500
udc Limited
Capital markets
FY85, 87, 89
11,911
0
10,009
416
10,425
Wankie Colliery Company Limited
Mining
FY81
20,000
18,000
3,750
0
3,750
30,806
1,108
31,914
Regional Investments
Africa
SIFIDA Investment Company, S.A.
Development financing
FY71, 76, 85
3,773
1,940
0
635
635
African Management Services
Company
Industrial services
FY89
1,400
0
0
1,400
1,400
Asia
Jardine Fleming Asia Select
Limited
Financial services
FY90
11,422
0
0
10,457
10,457
South East Asia Venture Investment
Management, Ltd. (SEAVIM)
Capital markets
0
50
50
South East Asia Venture Investment
Company N.V. (SEAVIC)
Capital markets
FY85
1,050
0
0
675
675
Latin America
New World Investment Fund
Financial services
FY89
12,500
0
0
12,500
12,500
0
25,717
25,717
Worldwide Investments
Algemene Bank Nederland N.V.
(Multi-Country Loan Facility)
Capital markets
FY90
25,000
25,000
25,000
0
25,000
Banque Indosuez (Multi-Country Loan
Facility)
Capital markets
FY90
25,000
25,000
25,000
0
25,000
Emerging Markets Growth Fund, Inc.
Financial services
FY88
18,911
0
0
12,664
12,664
Emerging Markets Investment Fund
Financial services
FY88
10,000
0
0
10,000
10,000
NMB (Multi-Country Loan Facility)
Capital markets
FY90
25,000
37,500
25,000
0
25,000
75,000
22,664
97,664
Other² (Taiwan, China)
Asia Cement Corporation
Cement and construction materials
FY70
4,019
200
0
36
36
Total
4,067,908
684,112
4,752,020
91
International Finance Corporation
Investment Portfolio
(continued)
June 30, 1990
Expressed in United States dollars (in thousands)
Summary
JUNE 30, 1990
JUNE 30, 1989
Equity
Total Loans
Equity
TotalLoans
Loans
(at cost)
and Equity
Loans
(at cost)
and Equity
INVESTMENTS HELD FOR THE CORPORATION
$4,067,908
$684,112
$4,752,020
$3,472,158
$572,492
$4,044,650
Undisbursed balances
1,048,978
114,017
1,162,995
1,151,891
100,038
1,251,929
Disbursed balances
$3,018,930
$570,095
$3,589,025
$2,320,267
$472,454
$2,792,721
INVESTMENTS HELD BY THE CORPORATION
FOR PARTICIPANTS
Total
$1,131,202
$349
$1,131,551
$ 923,030
$ 349
$923,379
Undisbursed balances
430,318
-
430,318
183,293
-
183,293
Disbursed balances
$ 700,884
$349
$ 701,233
$ 739,737
$349
$740,086
TOTAL INVESTMENTS HELD FOR THE CORPORATION
AND FOR PARTICIPANTS
Total
$5,199,110
$684,461
$5,883,571
$4,395,188
$572,841
$4,968,029
Undisbursed balances
1,479,296
114,017
1,593,313
1,335,184
100,038
1,435,222
Disbursed balances
$3,719,814
$570,444
$4,290,258
$3,060,004
$472,803
$3,532,807
1. Commitments include funds to be provided by IFC for its own account, funds to be provided by participants through the purchase of an interest in IFC's investment, and
funds to be provided by other financial institutions in association with IFC, where IFC has rendered material assistance in mobilizing those funds. Original commitments are
composed of disbursed and undisbursed balances. The undisbursed portion is revalued at current exchange rates while the disbursed portion represents the cost of the com-
mitment at the time of the disbursement. Loan investments held for the Corporation are revalued at the current exchange rates.
2. Represents investments made at a time when the authorities on Taiwan represented China in the International Finance Corporation (prior to May 15, 1980).
Note: The operational investments are represented by loans and equity, as stated. In addition, in certain investments, the Corporation has the right to acquire shares and/or
participate in the profits of the enterprise.
92
International Finance Corporation
Statement of Cumulative Gross Commitments
Appendix F
June 30, 1990
In thousands of United States dollars
Country, region
Number of
Cumulative Gross Commitments 1
Country, region
Number of
Cumulative Gross Commitments 1
or other area
Enterprises
IFC
Syndications
Total
or other area
Enterprises
IFC
Syndications
Total
Afghanistan
1
322
-
322
Madagascar
5
34,599
-
34,599
Argentina
36
562,687
128,958
691,645
Malawi
7
32,523
-
32,523
Australia
2
975
-
975
Malaysia
9
42,980
16,307
59,287
Bangladesh
5
12,842
4,155
16,997
Mali
2
2,932
-
2,932
Barbados
2
1,550
-
1,550
Mauritania
1
10,448
9,558
20,006
Bolivia
7
29,487
1,000
30,487
Mauritius
5
14,964
98
15,062
Botswana
2
1,030
-
1,030
Mexico
43
785,642
526,787
1,312,429
Brazil
67
1,018,189
532,442
1,550,631
Morocco
12
190,287
120,964
311,251
Burkina Faso
1
542
-
542
Mozambique
2
10,250
-
10,250
Burundi
1
5,878
-
5,878
Nepal
2
8,094
-
8,094
Cameroon
12
28,595
253
28,848
Nicaragua
3
8,543
929
9,472
Chile
15
391,815
85,100
476,915
Niger
1
2,267
-
2,267
China
5
44,261
-
44,261
Nigeria
11
73,958
3,674
77,632
Colombia
32
176,509
54,821
231,330
Oman
1
2,029
-
2,029
Congo, People's
Pakistan
27
222,654
126,987
349,641
Republic of the
4
7,925
-
7,925
Panama
3
55,100
-
55,100
Costa Rica
4
7,997
217
8,214
Paraguay
4
15,008
-
15,008
Côte d'Ivoire
9
29,847
-
29,847
Peru
16
82,295
3,621
85,916
Cyprus
4
5,270
597
5,867
Philippines
35
272,927
86,941
359,868
Dominica
1
700
-
700
Poland
2
45,099
-
45,099
Dominican Republic
7
28,999
2,400
31,399
Portugal
7
44,348
11,000
55,348
Ecuador
8
44,360
1,236
45,596
Rwanda
2
1,308
-
1,308
Egypt, Arab Republic of
13
166,240
73,500
239,740
Senegal
9
55,353
755
56,108
El Salvador
2
1,074
-
1,074
Seychelles
1
9,132
-
9,132
Ethiopia
4
20,078
3,490
23,568
Sierra Leone
1
2,050
-
2,050
Fiji
4
20,792
-
20,792
Somalia
2
1,351
-
1,351
Finland
4
1,075
2,073
3,148
Spain
5
19,048
1,685
20,733
Gabon
4
95,671
110,000
205,671
Sri Lanka
8
25,526
13,672
39,198
Gambia, The
1
2,823
-
2,823
Sudan,
6
26,511
6,489
33,000
Ghana
6
94,075
62,500
156,575
Swaziland
5
28,127
-
28,127
Greece
7
26,006
41,107
67,113
Tanzania
5
14,288
712
15,000
Grenada
1
6,000
-
6,000
Thailand
26
245,609
139,558
385,167
Guatemala
3
18,200
-
18,200
Togo
4
11,853
-
11,853
Guinea
4
23,443
-
23,443
Trinidad and Tobago
5
38,160
150,000
188,160
Guinea-Bissau
1
5,850
-
5,850
Tunisia
13
40,241
2,324
42,565
Guyana
1
2,000
-
2,000
Turkey.
42
484,059
233,777
717,836
Haiti.
1
1,500
-
1,500
Uganda
6
15,836
1,588
17,424
Honduras
4
5,697
6,101
11,798
Uruguay
6
41,700
10,000
51,700
Hungary
8
58,595
11,375
69,970
Venezuela
11
110,585
51,661
162,246
India
47
576,391
96,474
672,865
Yemen Arab Republic
5
22,552
1,099
23,651
Indonesia
21
166,280
78,281
244,561
Yugoslavia
24
517,774
200,339
718,113
Iran, Islamic Republic of
7
34,343
8,193
42,536
Zaire
7
42,704
-
42,704
Israel
1
10,500
-
10,500
Zambia
10
85,072
22,640
107,712
Italy
1
960
-
960
Zimbabwe
6
50,142
18,000
68,142
Jamaica
10
35,749
926
36,675
Regional investments
Jordan
6
46,810
50,250
97,060
Africa
2
5,173
1,940
7,113
Kenya
15
110,334
35,667
146,001
Asia.
3
12,472
-
12,472
Korea, Republic of
19
202,782
45,135
247,917
Latin America
1
10,000
-
10,000
Lebanon
4
6,505
2,600
9,105
Worldwide investments
6
116,411
87,500
203,911
Lesotho
1
330
-
330
Other³
2
8,444
1,400
9,844
Liberia
2
9,202
1
9,203
TOTAL
848
$8,147,514
$3,290,857
$11,438,372
1. Cumulative commitments are composed of disbursed and undisbursed balances. The undisbursed portion is revalued at current exchange rates while the disbursed portion
represents the cost of commitment at the time of disbursement.
2. On May 22, 1990, the Yemen Arab Republic and the People's Democratic Republic of Yemen merged into a single state, the Republic of Yemen. Effective July 13, 1990,
the Republic of Yemen is substituted for the Yemen Arab Republic in the Corporation's records.
3. Represents investments made at a time when the authorities on Taiwan represented China in the International Finance Corporation (prior to May 15, 1980).
93
IFC Management
President
Barber B. Conable
Executive Vice President
William S. Ryrie
Vice President, Investment Operations
Judhvir Parmar
Vice President, Portfolio and Advisory Operations
Wilfried E. Kaffenberger
Vice President, Finance and Planning
Richard H. Frank
Vice President and General Counsel.
José E. Camacho
Vice President, Engineering
Makarand V. Dehejia
Secretary
Timothy T. Thahane
INVESTMENT DEPARTMENTS¹
Director, Department of Investments, Africa /
Philippe Liétard**
Divisional Manager-Burkina Faso, Cameroon, Congo (People's Republic of the), Gabon, Ghana, Mali,
Niger, Zaire
Karl Voltaire**
Divisional Manager-Benin, Cape Verde, Côte d'Ivoire, Gambia, Guinea, Guinea-Bissau, Liberia, Senegal,
Sierra Leone, Togo
G. K. van der Mandele
Director, Department of Investments, Africa II
M. Azam K. Alizai
Divisional Manager-Angola, Botswana, Ethiopia, Kenya, Lesotho, Malawi, Mauritius, Mozambique,
Seychelles, Swaziland, Tanzania, Uganda, Zambia
Michael Dixon
Divisional Manager-Burundi, Djibouti, Madagascar, Nigeria, Rwanda, Somalia, Sudan, Zimbabwe
Tei Mante**
Director, Department of Investments, Asia /
Pho Ba Quan
Divisional Manager-China, Kiribati, Korea (Republic of), Papua New Guinea, Philippines, Thailand, Vanuatu
Sakdiyiam Kupasrimonkol
Divisional Manager-Fiji, Indonesia, Malaysia, Solomon Islands, Tonga, Viet Nam, Western Samoa
Mumtaz R. Khan
Director, Department of Investments, Asia II
Jemal-ud-din Kassum
Divisional Manager-India, Myanmar, Nepal
Athishdam Tharmaratnam
Divisional Manager-Afghanistan, Bangladesh, Maldives, Pakistan, Sri Lanka
Declan Duff**
Director, Department of Investments, Europe
Douglas Gustafson
Divisional Manager-Cyprus, Greece, Portugal, Turkey, Yugoslavia
Reynaldo Ortiz
Divisional Manager-Hungary, Poland
Vijay K. Chaudhry
Director, Department of Investments, Latin America and the Caribbean /
Helmut Paul
Divisional Manager-Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama
Varel Freeman
Divisional Manager-Antigua and Barbuda, the Bahamas, Barbados, Belize, Colombia, Dominica,
Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St. Lucia, Trinidad and Tobago, Venezuela
Richard P. Parry
Director, Department of Investments, Latin America and the Caribbean //
Everett J. Santos
Divisional Manager-Bolivia, Brazil, Paraguay, Uruguay
Mitchell Alland**
Divisional Manager-Argentina, Chile, Ecuador, Peru
Manuel Nuñez
Director, Department of Investments, Middle East and North Africa
André Hovaguimian**
Divisional Manager-Egypt (Arab Republic of), Iran (Islamic Republic of), Iraq, Jordan, Kuwait, Lebanon,
Oman, Saudi Arabia, Syrian Arab Republic, United Arab Emirates, Yemen (Republic of)
Javed Hamid***
Divisional Manager-Mauritania, Morocco, Tunisia
Sami Haddad**
Director, Capital Markets Department
Daniel F. Adams
Deputy Director
Robert D. Graffam
Divisional Manager-Afghanistan, Argentina, Bangladesh, Benin, Bolivia, Burkina Faso, Cameroon,
Cape Verde, Chile, Congo (People's Republic of the), Côte d'Ivoire, Ecuador, Egypt (Arab Republic of),
Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, India, Iran (Islamic Republic of), Iraq, Jordan, Kuwait,
Lebanon, Liberia, Maldives, Mali, Mauritania, Morocco, Myanmar, Nepal, Niger, Oman, Pakistan,
Paraguay, Peru, Saudi Arabia, Senegal, Sierra Leone, Sri Lanka, Syrian Arab Republic, Togo, Tunisia,
United Arab Emirates, Uruguay, Yemen (Republic of), Zaire
Khalid A. Mirza
Divisional Manager-Countries in Caribbean and Central America; Angola, Belize, Botswana, Colombia,
Fiji, Korea (Republic of), Lesotho, Madagascar, Malawi, Malaysia, Mauritius, Mexico, Mozambique,
Panama, Papua New Guinea, Philippines, Seychelles, Solomon Islands, Swaziland, Thailand, Tonga,
Vanuatu, Venezuela, Viet Nam, Western Samoa, Zambia, Zimbabwe
Cesare Calari
Divisional Manager-Brazil, Burundi, China, Cyprus, Djibouti, Ethiopia, Greece, Hungary, Indonesia,
Kenya, Nigeria, Poland, Portugal, Rwanda, Somalia, Sudan, Tanzania, Turkey, Uganda, Yugoslavia;
other European countries
Farida Khambata
Manager, International Securities Group
R. Michael Barth
PORTFOLIO AND ADVISORY OPERATIONS
Manager, Special Operations Unit
Rolando M. Zosa
Manager, Portfolio Operations Support Unit
Director, Corporate Finance Services Department
Edward A. Nassim
Manager, Division 1-Asia, Middle East, Eastern and Southern Africa, Southern and Central Europe
Paul R. Hinchey
Manager, Division 2-Latin America and the Caribbean, Western and Central Africa, North Africa,
Eastern Europe
Vivek Talvadkar**
SUPPORT DEPARTMENTS
Director, Business Development and Syndications Department²
Irving Kuczynski
Manager, Public Relations and Syndications Division
Francis de C. Hamilton
Manager, Business Development Division
Bruce H. MacLeod
Manager, Energy Unit
Hugh Henry-May
94
Appendix G
Director, Controller's and Business Planning Department
Jean-Philippe F. Halphen
Divisional Manager, Business Planning and Budgeting
Peter A. Dickerson
Divisional Manager, Information Technology
Allen F. Shapiro
Divisional Manager, Accounting
Fayezul H. Choudhury
Director, Economics Department, and Chief Economic Adviser
Guy Pierre Pfeffermann
Manager, Foreign Investment Advisory Service
Dale R. Weigel
Lead Economist
Javed Hamid
Chief Operations Evaluation Officer
Walter I. Cohn
Deputy Director, Engineering Department
Andreas M. Raczynski
Technical Manager, Agriculture and Forest Products
Friedrich Luhde
Technical Manager, Chemicals and Petroleum
Gilbert Hunt
Technical Manager, General Manufacturing
Gopi Nath Puri
Technical Manager, Mining and Metals
Claus A. Westmeier
Manager, Technology and Development Unit
Alakadri K. Bose
Legal Department
Deputy General Counsel
Daoud L. Khairallah**
Chief Counsel
Fernando Cabezas
Chief Counsel
David G.T. d'Adhemar
Chief Counsel (Acting)
Christopher J. Knight
Chief Counsel (Acting)
Maher S. Mahmassani
Chief Counsel (Acting)
Carlos Fernandez-Duque
Director, Treasury and Financial Policy Department.
René Karsenti
Divisional Manager, Financial Planning and Policy
Harold Rosen
Divisional Manager, Financial Operations.
Bernardo Frydman
Other
Principal Financial Adviser
Vasant H. Karmarkar
Operations Adviser
Nissim H. Ezekiel
Special Adviser
Ducksoo Lee**
Personnel and Administration
Manager
Robert M. Voight³
PROJECT DEVELOPMENT FACILITIES
Coordinator, Africa Project Development Facility
Alexander N. Keyserlingk
Regional Manager, West Africa (Abidjan, Côte d'Ivoire)
André J. Cracco
Regional Manager, East Africa (Nairobi, Kenya)
Ignacio D. Maramba
Regional Manager, Southern Africa (Harare, Zimbabwe)
Omari Issa**
Manager, Caribbean Project Development Facility
Damian von Stauffenberg
SPECIAL REPRESENTATIVES AND REGIONAL MISSIONS
Special Representative in Tokyo
Sugio Hatanaka
Deputy Special Representative in Tokyo
Ernest Kepper***
Special Representative in Europe (London)
Christopher Bam
Special Representative in Europe (Paris)
Giovanni Vacchelli
Regional Mission in Bangkok, Thailand
Chung Min Pang**
Regional Mission in Central Africa (Douala, Cameroon)
Roger Blondel
Regional Mission in Eastern Africa (Nairobi, Kenya).
Guy Antoine***
Regional Mission in Islamabad, Pakistan
C. John Pott
Regional Mission in Jakarta, Indonesia
Udayan Wagle**
Regional Mission in Manila, Philippines
Krishan K. Sehgal
Regional Mission in the Middle East (Cairo, Arab Republic of Egypt)
John H. Stewart
Regional Mission in New Delhi, India
Mohan R. Wikramanayake
Regional Mission in North Africa (Casablanca, Morocco)
Sami Haddad
Regional Mission in Southern Africa (Harare, Zimbabwe)
Thomas Milton***
Regional Mission in Western Africa (Abidjan, Côte d'Ivoire)
Hung Dinh Nguyen
Resident Mission in Brazil (Sao Paulo)
Stanley Greig**
Resident Mission in Nigeria (Lagos)
Bahadurali Jetha
Resident Mission in Turkey (Istanbul)
Surya Sethi**
IFC Adviser, Australasia (Sydney)
Neil Paterson
IFC Adviser, Scandinavia (Oslo)
Torstein Stephansen
Senior Adviser, Eastern Europe (Vienna)
Theo K. Zirkel
*
These officers hold the same position in the International Bank for Reconstruction and Development.
**
These appointments were effective July 1, 1990.
*** These appointments were effective August 1, 1990.
1. Directors of Investment Departments and the Capital Markets Department report to the Vice President, Investment Operations, on new business, and to the Vice
President, Portfolio and Advisory Operations, on portfolio supervision matters.
2. The Director, Business Development and Syndications, reports to the Vice President, Investment Operations. With respect to energy matters, he reports to the Vice
President, Investment Operations on new business, and to the Vice President, Portfolio and Advisory Operations on portfolio supervision.
3. John H. Stewart will assume this position on September 1, 1990.
95
International Finance Corporation
Headquarters
Regional Mission in Cairo
RESIDENT MISSIONS
1818 H Street, N.W.
(Middle East)
Washington, DC 20433 U.S.A.
5 El Falah Street
Resident Mission in Brazil
Telephone: (202) 477-1234
Mohandessin
Rua Guararapes 2064
Telex: FTCC 82987
Guiza, Egypt
10th Floor, #104
RCA 248423
Telephone: 347-3739, 347-8081
Sao Paulo, Brazil CEP 04561
WU 64145
Telex: 93110
Telephone: 531-1629, 241-4049
Cable: IFCAI
Fax: 241-3073
Cable: CORINTFIN
Fax: (202) 477-6391
Fax: 347-3738
Resident Mission in Nigeria
London
Regional Mission in Casablanca
Plot PC 10, off Idowa Taylor Street
New Zealand House, 15th Floor
(North Africa)
Victoria Island
Haymarket
30 avenue des F.A.R.
P.O. Box 127
London SW1Y 4TE, England
Casablanca, Morocco
Lagos, Nigeria
Telephone: (71) 930-8741
Telephone: 312-888, 312-278
Telephone: 616044, 616196
Telex: 919462
Telex: 22606
Telex: 21174
Fax: 315181
Cable: INTBAFRAD
Cable: CORINTFIN
Fax: 616360
Fax: (71) 930-8515
Regional Mission in Harare
Paris
(Southern Africa)
Resident Mission in Turkey
66, avenue d'Iéna
CABS Centre, 11th Floor
Mete Caddesi No. 24/3
Taksim
75116 Paris, France
Jason Moyo Avenue
Telephone: 40-69-30-60
P.O. Box 2960
Istanbul, Turkey
Telex: 620628
Harare, Zimbabwe
Telephone: 1432593, 1432126
Cable: CORINTFIN
Telephone: 729611, 729612, 729613
Cable: CORINTFIN
Telex: 2704
Fax: 1492476
Fax: 47207771
Cable: INTBAFRAD, HARARE
Tokyo
Fax: 708659
PROJECT DEVELOPMENT
Kokusai Building, Room 913
FACILITIES
1-1, Marunouchi 3-chome
Regional Mission in Islamabad
Chiyoda-ku
20A
Tokyo 100, Japan
Shahrah-e-Jamhuriat
Africa Project Development Facility
Telephone: 201-2310
P.O. Box 1025
(APDF)
Telex: 26838
Islamabad, Pakistan
1818 H Street, N.W.
Cable: INTBAFRAD
Telephone: 819781, ext. 301
Washington, DC 20433 U.S.A.
Fax: 211-2216
Cable: CORINTFIN
Telephone: (202) 473-0508
Fax: 812782
Telex: 82987
Vienna
Fax: (202) 334-8632
Boesendorferstr. 2/II
Regional Mission in Jakarta
Immeuble CCIA, 17th Floor
1010 Vienna, Austria
LIPPO Building, 3rd Floor
01 B.P. 8669
Telephone: 505-7306, 505-2853
Jl. Rasuna Said, Kav. B-10
Abidjan-01, Côte d'Ivoire
Telex: 136433
Kuningan 12940
Fax: 505-1226
P.O. Box 324/JKT
Telephone: 219697, 212303, 216859
Telex: 22264
Jakarta, Indonesia
Fax: 216151
REGIONAL MISSIONS
Telephone: 5207316
Telex: 62141
International House
Regional Mission in Abidjan
Cable: CORINTFIN
P.O. Box 46534
(Western Africa)
Fax: 5200438
Nairobi, Kenya
Corner of Booker Washington and
Telephone: 722200
Jacques Aka Streets
Regional Mission in Manila
Telex: 25303
Cocody
Room 300, Multi-Storey Building
Fax: 339121
B.P. Box 1850
Central Bank of the Philippines
Abidjan-01, Côte d'Ivoire
Mabini, Manila
Telephone: 44-32-44, 44-65-50
Philippines
Caribbean Project Development
Facility (CPDF)
Telex: 28132
Telephone: 521-1664, 521-5507
Cable: CORINTFIN
Telex: 40541
1818 H Street, N.W.
Cable: CORINTFIN
Washington, DC 20433 U.S.A.
Fax: 441687
Fax: 5220156
Telephone: (202) 473-0900
Telex: RCA 48856
Regional Mission in Bangkok
Regional Mission in Nairobi
Cable: CORINTFIN
Udom Vidhya Bldg. (5th Floor)
956 Rama IV Road
(Eastern Africa)
Fax: (202) 334-8855
Bangkok 10500, Thailand
View Park Towers, 17th Floor
Telephone: 235-5300/6
Uhuru Highway
Eastern Caribbean Regional Office
P.O. Box 30577
Musson Building, 2nd Floor
Telex: 82817 TH
Hincks Street
Cable: INTBAFRAD
Nairobi, Kenya
P.O. Box 259
Fax: 2366467
Telephone: 24726, 338868
Telex: 22022
Bridgetown, Barbados
Cable: CORINTFIN
Telephone: 809-429-6298
Telex: 2473
Fax: 338464
Fax: 809-429-5809
Regional Mission in New Delhi
55 Lodi Estate
P.O. Box 416
New Delhi 110003, India
Telephone: 697-905, 617-241
Telex: 3161493, 3123642
Cable: CORINTFIN
96
Fax: 619393
Cover design by the Barton-Gillet Company
Cover illustration by Richard Waldrep
Book design by Publications Design Unit, The World Bank
Typography by Composition Unit, The World Bank
International Finance Corporation
1818 H Street, N.W.
Washington, D.C. 20433 U.S.A.
ISBN-0-8213-1645-1