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The International Finance Corporation (IFC), a multilateral institution, was established in 1956 with

a mandate to foster economic growth by promoting private sector investment in its developing mein-

ber countries. TFC is a member of the World Bank Group, which also indudes the International Bank

for Reconstruction and Development (IBRD), the International Development Association (IDA), and

the Multilateral Investment Guarantee Agency (MIGA). Although IFC's activities are closely coordi-

natcd with, and complement, the overall development objectives of the other World Bank Group

institutions, IFC is legally and financially independent, with its own Articles of Agreement, share-

holders, financial structure, management, and staff.

IFC combines the characteristics of a multilateral development bank and a private merchant bank. Its

share capital is provided by its 147 developed and developing member countries, which collectively

determine its policies and activities. IFC's profitability, strong shareholder support, and substantial

paid-in capital base have allowed it to raise most of the funds for its lending activities through its

triple-A rated bond issues in the international financial markets. Equity investments are financed

from the capital base and retained earnings.

In its project financing role IFC provides loans and makes equity investments. Unlike most multilate-

ral institutions, IFC does not require government guarantees for its financing. Like a private financial

institution, the Corporation prices its finance and services in line with the market and seeks profitable

returns. IFC shares full project risks with its partners.

IFC's experience in doing business in developing countries as well as its risk-management skills and

thorough project appraisals all contribute to the success of the private sector projects it supports.

These qualities also enable IFC to play an important catalytic role in mobilizing additional project

fiuding from other investors and lenders, either in the form of cofinancing or through loan syndica-

tions, the underwriting of debt and securities issues, and guarantees. In addition to project finance

and resource mobilization, IFC offers a full array of advisory services and technical assistance, helping

private businesses in the developing world to increase their chances of success and advising govern-

ments on creating an environmenit that encourages private investment.

In its 36 years of operation, IFC has provided nearly $11 billion in financing for more than 1,000

companies in 98 developing countries. Today IFC is the largest source of direct financing for private

sector projects in developing countries. IFC has a vital role to play in helping developing countries to

make the transition to open, market-oriented economies and to build strong private sectors. As more

and more developing countries adopt market-based policies, demand for IFC's services-loans,

equity investments, resource mobilization, and advice-continues to grow.

T AB LE OF CON T ENT S

LETTER TO THE BOARD OF GOVERNORS 1

THE YEAR IN REVIEW 2

PRIVATE INVESTMENT ISSUES 6

The Climate for Private Investment 6

Privatization 11

REPORT ON OPERATIONS 17

Project Financing 17

Resource Mobilization 18

Risk-Management Services 20

Advisory Services and Technical Assistance 21

REGIONAL REPORTS 25

Sub-Saharan Africa 25

Asia 35

Europe 44

Latin America and the Caribbean 53

Middle East and North Africa 65

MANAGEMENT AND ORGANIZATION 71

FINANCIAL REVIEW 81

Income 81

Expenses 81

Capital and Retained Earnings 82

Funding Management 82

Financial Statements 85

THE PORTFOLIO 97

Commitments 97

Disbursements 97

IPortfolio Management 97IFC's Investment Portfolio at June 30, 1992 99

Statement of Cumulative Commitments 121

APPENDIXES

Governors and Alternates 122

Directors and Alternates and Their V4oting Power 124

IFC Management 125

Acronyms, Abbreviations, Notes,

and Definitions 128

August 6, 1992

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, 1992, prepared in accordance with the By-Laws of the Corporation. Mr. Lewis T. Preston,

President of the Corporation and Chairman of the Board of Directors, has submitted this Report, together with

the accompaniying audited financial statements, to the Board of Governors.

The Directors are pleased to report that, in fiscal 1992, IFC continued to expand its project financing

operations and advisory activities in its developing member countries, while further strengthening its financial

position.

4%4' 'A b q ; 4j, i,.

'.4X

IFC's Boardof D,rectors, i. -

Januiary 14, 1992

DIRECTORS ALTERNATES

Ibrahim A. Al-Assaf Ahmed M. Al-ChannamFawzi Hamad Al-Sultan Mohamed W. HosnyAris Othman Aung PeJ.S. Baijal M.A. SyedMohamed Benhocine Salem Mohamed OmeishRosario Bonavoglia Fernando S. CarneiroFelix Alberto Camarasa Nicolas FlantoE. Patrick Coady Mark M. Collins, Jr.John H. Cosgrove A. John WilsonFritz Fischer Harald RehmEveline Herfkens Boris SkapinYasuyuki Kawahara Kivoshi KoderaJean-Pier re Landau Philippe de Fontaine ViveJabez A. Langley O.K. MatamboJean-Pierre Le Bouder Ali BourhancErnest Leung Paulo C. Ximenes-FerreiraJorunn Maehlum Helga JonsdottirMoises Naim Gabriel CastellanosDavid Pcretz Robert Graham-Harrison

iFCs Board Frank Potter Hubert Deanof Directors, Bernard Snoy W\alter Rill

August 6, 1992 WTang Liansheng Jin Liqun

T HE Y E A R IN R E V I E W

4 ~~~~~~~~~~voting power required for approval of future capital

.U. ̂ - . t . t t; increases and charter amendments.

ICX Cooperation between the IBRD and I FC has been

t3- I g i f000; -1 < _ : i; strengthened to achieve greater complementarity in

their support of private sector development. IFC hasbcgun to work with the IBRD on assessments of the

privatc sector in about 20 countries. 'these studies are

fewis T Prestor,mw^_ left to rigt: iW intended to deepen the World Bank Group's under-Lewis T Preston,uPresident of the standing of obstacles to private sector cLevelopment in

VAdrld R3an1k individual member countries and to serve as the basisGrouip, and

Sir Wtillianm Ryic for future assistance strategies. tFC andi the IBRD areEx ec utive Vice also coordinating their operations and sectoral work.

President of IEC

The Corporation achieved its k-ey objectives in its

Fiscal 1992 was a year of challenge and change for investment operations in fiscal 1992. The volume of

IFC. Demand for the Corporation's finance and ad- project financing approved increased over the previ-

visory services continued to increase as countries ous fiscal year, as expected. IFC approved $1.8 billion

throughout the developing world persevered with in financing for its own account for 167 projects,

free-market reforms. Albania, Bulgaria, Equatorial compared with $1.5 billion for 152 projects in fiscal

Guinea, the Lao People's Democratic Republic, and 1991. Equity and quasi-equity investments, which

Switzerland joined the Corporation during the year, represented 21 percent of total financing approved

and Comoros joined shortly after the close of the for IFC's own account, were increased in accordance

fiscal year, bringing IFC's membership to 147 coun- with the Corporation's goal of helping companies

tries. Fourteeni of the 15 former Soviet republics had in developing countries to decrease their reliance on

applied for membership by year-end. debt financing.

The capital increase recommended by the Board of It was another record year for IFC's mobilization

Directors at the end of fiscal 1991 was approved by activities. The Corporation approved $1.4 billion

the Board of Governors on May 4, 1992. IFC's autho- in syndicated loans and the underwriting of securi-

rized capital has thus been increased from $1.3 bil- ties issues and investnenit funds. In adlition, IFC

lion to $2.3 billion. The $1 billion increase was attracted funds from other investors and lenders in

intended to enable IFC to increase new investment the form of cofinancing. Projects approved by IFC

approvals in all regions by 1O percent a year until had total investment costs of $12 billion; this means

1998, bringing annual approvals to about S4 billion other sources provided nearly S6 in project

by the end of the decade. With the accession to mem- finance for every $1 approved by IFC.

bership of the fornmer Soviet republics, this rate of

growth will probably be increased to 12-15 percent. IFC offered clients a broader range of financial

products and services, helping them to gain access to

To accommodate the memberships of the former sophisticated risk management techniques, such as

Soviet republics, the Board of Directors approved currency and interest rate swaps and commodities-

a resolution on June 18, 1992, recommending a hedging facilities, that would not normally be avail-

$150 million selective capital increase. Of this able to companies in developing cooFtTies. Nine

amount, $132 million will be allocated to the new projects involving hedging instruments were

members, and the balance will be available to approved, of which thrce were for companies in

accommodate future requests for shares. IFC's Board sub-Saharan Africa.

of Governors is expected to approve the resolution

before the end of the calendar year. The Directors Through financial intermediaries, the Corporation

also recommended that the Corporation's Articles was able to provide financing and financial products

of Agreement be amended to increase the total to small and medium-sized companies. Eight projects

2 THE YEAR IN REVIEW

HIGHLIGHTS OF THE YEAR

OPERATIONAL RESULTS

New prolects approved 167

Total financing, including syndications and underwriting $3.2 billion

Financing for IFC's own account $1.8 billion

Total project costs $12.0 billion

Disbursed loan and equity portfolio for IFC's own account, at June 30, 1992 $5.0 billion

RESOURCES AND INCOME

Net income $180.2 million

Paid-in capital $1.3 billion

Retained earnings $1.1 billion

Borrowings for the year $724 million

involving credit and guarantee lines and risk- IFC's disbursed portfolio grewby 16 percent over the

management facilities, totaling $150 million, year. At year-end, the disbursed portfolio included

were approved. One of these, an innovative multi- loans and investments of $5 billion, compared with

product agency credit line extended to a leading $4.3 billion at June 30, 1991.

Mexican bank, will makie a range of financial prod-

ucts available to small and medium-sized companies Demand for the Corporation's advisory services and

in Mexico. technical assistance grew substantially during the

fiscal year. IFC launched a program of technical

An increasingly important activity is the introduc- assistance in the republics of the former Soviet

tion of sound companies in IFC's developing mem- Union, designing and implementing Russia's first

ber countries to the international financial markets. privatization, which involved the auction of 2,000

In fiscal 1992 IFC was a co-lead manager of seven small-scale enterprises in Nizhny Novgorod. It

international securities issues by companies in Asia, stepped up its advisory activities in connection with

Europe, and Latin America, and two investment privatization and corporate restructuring, working

funds in Latin America. on assignments in Asia, Europe, and Latin America

during the year. It also worked on 30 assignments

Projects approved by IFC in fiscal 1992 were in a involving the provision of technical assistance in

broad range of sectors, including financial services, capital market development.

tourism, mining, petrochemicals, power, oil and gas

exploration, agribusiness, and general manufactur- The Corporation again achieved a strong financial

ing. Funding was approved for a number of newly performance. Net income was $180 million, repre-privatized companies in Eastern and Central Europe. senting a return of 7.5 percent on the Corporation's

In an effort to encourage private investment in infra- net worth. Although income from IFC's loan port-

structure, FC approved financing for infrastrLucture folio decreased slightly because of the decline in

proJects in Africa, Asia, Europe, and Latin America. interest rates, income from the equity portfolio

It also approved two projects in Latin America that increased. Capital gains from sales of equity invest-

will have significant environmental benefits. ments reached $113 million, the same as in fiscal

1991. Service fee income incr-eased by 28 percent,

New commitments during the year totaled from $25 million in fiscal 1991 to S32 million in fiscal

$1.3 billion. With disbursements of $1.1 billion, 1992.

3

At June 30, 1992, the Corporation's net worth, the than from headquarters. If the new arrangement

total of paid- in capital and retai ned earniings, came to is successful, TFC mnay decentralize operations in

$2.4 billion, compared with $2.1 billion at the end of other regions.

fiscal 1991. IFC's debt-to-equity ratio-outstanding

borrowings and guarantees against subscribed capi- Fiscal 1992 was thus a very successful year. The

tal and retained earnings-was 2.15:1 at year-end, Corporatiorn achieved most of its oper-ational objec-

compared with 1.95:1 at the end of fiscal 1991. tives while strengthening its financial position. IFC's

shareholders demonstrated their supFort for its ac-

Borrowings in the international markets came to tivities by approving a capital increase. Confronted

$664 million, an increase of 11 percent over fiscal by greatly increased demand for its services, the

1991. IFC launched its first two issues under its Corporation took a critical look at its organizational

Medium-Term-Note Program in the United States. structure and made manyimportant ckanges. During

fiscal 1992 the groundwork was laid for the future

IFC management implemented a far-reaching expansion that will be required of IFC in view of its

reorganizationi of the Corporation that took effect memiiber counitries>growing need for sLpport of their

on July 1, 1992, to ensure continuing high quality in private scctors and the increase in its rnembership.

IFC's services and achieve greater flexibility in re-

sponding to the needs of member countries. Under

the new structure, which will enable IFC to develop

stronger regional strategies while becoming more

specialized in sectors of great economic and develop-

mental importance in its member countries, there

will be five Regional Departments and six Specialist

Departments.

The Regional Departments will have responsibility

for developing strategies for each region, including a

strategy for capital market development. Four new

Specialist Departments will focus on broadening

IFC's expertise in agribusiness, chemicals, petro-chemicals, and fertilizers, infrastructure, and oil, gas, PRO JECT FINANCING

w 1 ~~~~~~~~~~(billions of U.S. dXoSllos)

and mining, and will handle the bulk of IFC's financ-

ing operations. The Corporate Finance Services 12

Department, whose focus is advisory activities, will 11

continue to specialize in privatization and corporate 10

restructuring. The Central Capital Markets Depart- 9

ment will handle capital markets projects that are 8

global in scope as well as securities underwriting 7

activities, assist the Regional Departments in the de-

velopment of regional capital markets strategies, and 6

provide technical assistance in capital market devel- 5

opment in member countries. The reorganization is 4

described in greater detail in the chapter on Manage- 3

ment and Organization. 2

1During the year significant changes were made

in tFC's regional mission in India. IFC now has 1991 1992

a multidisciplinary staff in New Delhi and Bombay. rnibilizatiot U Direcriobitization

The aim is to accelerate the project cycle by handling 1 Loatis 1 Equity

as many aspects of it as possible in the field, rather

4 ma YEAR [N REVIEaW

THE PAST TEN YEARS(mnillions of U.S. dollars)

FISCAL YEAR 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992

OPERATIONS

Investment ApprovalsNumber ofprojects 57 62 75 85 92 95 92 122 152 167

Total financing 917 700 938 1,164 914 1,270 1,710 2,201 2,846 3,227Financing forIFC's own account 425 396 611 710 790 1,039 1,292 1,505 1,540 1,774

UTnderwriting andsyndications 492 305 328 454 124 231 418 695 1,306 1,452

Total project costs 2,994 2,482 2,788 3,588 4,343 5,010 9,698 9,490 10,683 12,000

Committed PortfolioNO i 67cr offirins 341 349 366 377 409 454 468 495 618 703

Total committedportfolio 3,005 3,245 3,318 3,441 3,795 4,270 4,968 5,884 7,008 8,718

For IFC's ownaccount 1,882 1,990 2,116 2,387 2,756 3,374 4,045 4,752 5,494 6,423

Held for others 1,123 1,255 1,202 1,054 1,039 896 923 1,132 1,514 2,295

RESOURCES AND INCOME

CapitalizationBorrowings 536 583 825 1,223 1,581 2,047 2,255 3,580 4,130 5,114Paid-in capital 544 544 546 602 722 850 948 1,072 1,145 1,251Retained earnings 204 230 258 284 338 438 633 792 958 1,138

EarningsNet income 23.0 26.3 28.3 25.4 53.8 100.6 196.5 157.0 165.9 180.2

5

P R I VA T E I N V E S T ME N T I S S U E S

T H E C L I M A T E F O R P R I VA T E I N V E S T M E N T

GLOBAL INVESTMENT TRENDS enterprises, resulted in some positive growth in per

Economic growth rates in the leading industrialized capita incomes, after a prolonged period of falling

countries continued to be modest in 1991. Real incomes.

growth, which had falleni to 2.6 percent in 1990,

weakened further in 1991, averaging only 1.2 per- Elsewhere in the developing world, the impact of

cent. Recession persisted in the United States and the difficult conditions of 1990 continued to be felt

the United Kingdom, and growth slowed in France, in 1991. Tfhe aftcrmath of the Gulf crisis, including

Germany, and Japan. Excluding Eastern Europe, the U.N. embargo of Iraq, continued to affect

where economic activity contracted, the average several countries in the Middle East; per capita

economic growth rate for the developing countries income in the region as a whole declined. Despite

was significantly higher than that of the industrial economic liberalization programs, growth also

countries, although still fairly modest, at 3.4 percent. slowed in the South Asian countries. There was a

However, because of the economic slowdowin in the large drop in measured output in Eastern Europe

industrialized countries, demand and prices for and the former Soviet republics. The trading

commodities, which account for an important share regimes that once linked the former COMECON

of exports from developing countries, remained low, countries have collapsed, and the progress of

and investment prospects continued to be uncertain. programs to create market economies and to

Average per capita income in the developing coun- liquidate inefficient enterprises and privatize other

tries fell slightly for the second year in a row, enterprises has been relatively slow in many of

these countries. Prudent economic policies in sub-

The pattern of growth in the developing world wvas Saharan Africa led to sustained growtlh in a few

decidedly mixed. In East Asia, export-oriented countries, but, overall, per capita incomnes in the

countries continued to expand vigorously, despite region declined because of difficult economic

slower growth in many customer nations. In several conditions resulting from political instability,

larger countries in Latin America, economic reforms, severe drought conditions in southern Africa, and

including the widespread privatization of state weak commodity prices.

GROSS DOMESTIC PRODUCT, 1989-1991

1 9 89 1 990 1 991

Real Real Real Real Real RealGDP per capita GDP per capita GDO' per capita

GDP GDP GDP'

Seven major OECD countries 3.3 2.6 2.6 2.0 1.2 0.7

Developing countries 2.9 0.9 1.9 (0.6) 1.9 (0.2)

Sub-Saharan Africa 3.1 (0.2) 0.9 (2.1) 2.3 (1.0)

East Asia 5.6 3.8 6.7 4.6 7.1 5.6

South Asia 4.8 2.5 4.8 2.6 3.6 1.5

Latin America 1.2 (0.8) (0.1) (2.3) 2.6 0.6

Middle Fast and North Africa 2.5 (0.5) 1.0 0.5 (1.9) (4.6)

CentralandEasternEurope' 0.7 0.0 (8.7) (3.7) (14.1) (14.2)

'Not including the former Soviet Union N o t e: Parentheses denotenegative nunsbe's. S o u r c e iBRD.

6 THE CLIMATE FOR PRI'VATE INVESTMENT

NET FOREIGN DIRECT INVESTMENT FLOWS TO DEVELOPING COUNTRIES,1985-91(milkions of U.S. dollars)

10,000

8,750

7,500

6,250

5,000

3,750

2,500

1,250

-1,250

1985 1986 1987 1988 1989 1990 1991

* Sub-SaharanAfrica * Europe V- South Asia

Rn Middle East and North Africa 7 Latin A merica and the Caribbean i East Asia

Economic sluggishness in many industrial and greater developmenital imipact, sinice it tends to be

developing countries in 1991 was matched by a concentrated in countries that are liberalizing their

slowdown in the growth of international trade. In economies and seeking doser links with international

1991 the rate of trade growth declined for the third markets.

straight year. However, although the volume of world

trade expanded by only 3 percent, the smallest gain Foreign direct investment (FDI) has been growing

since 1983, trade, particularly among developing rapidly, and, although unevenly spread, is now an

couintries, contiinued to expand more rapidly than important source of development financing in many

output. Trade trends again demonstrated clearly the countries. In 1990 FDI accounted for more than 10

increasing importance of manufactured exports to the percent of private investment in developing countries,

growth prospects of developing countries, which have compared with an average of about 6 percent during

increased their share of markets in the European the period 1978-88. FDI accounted for almost one-

Community, Japan, and the United States, from 2.4 third of net long-term resource flows to the develop-

percent in 1980 to well over 3 percent today. Manu- ing world in 1991, a proportion thal has doubled

factured goods now account for over half of total since 1985.

shipments from developing countries to these

markets. Governments throughout the developing world

recognize the increasing importance of private

FOREIGN DIRECT INVESTMENT investment-particularly FDI-both in overall capitalSince 1986, new private investment in developing formation and in gaining access to technology,

countries has grown from 10 percenit to nearly 12 maniagerial expertise, and internationial distributioni

percent of GDP in 1991-the highest level since the channels. This recognition, as well as the scarcity of

early 1970s. However, in the 1970s much invcstment alternative sources of funding and the poor perfor-

was made in response to widespread protectionist mance of state enterprises, are the driving forces

policies and was therefore inefficient on an interna- behind the movement toward private sector develop-

tional scale; today private investment is likely to have a ment seen throughout the developing world.

7

LONG-TERM NET RESOURCE FLOWS TO DEVELOPING COUNTRIES(billions of U.S. dollars)

110

100

90

80 -5 --- gg

70 ~-

60, ,

50

40

30

20

10

01982 1983 1984 1985 1986 1987 1988 1989 199) 1991

i Officialgrants a Official loans (net) Aggregate net resourceflowvs

ff Private loans (net) U Foreign direct investment (FDI) So.rce: IBRD

'fhe desire of companies to integrate their manufac- Commercial bank lending, for example, remains farturing facilities globally means that investors much below the levels of the earlv 1980s and earlier, despiteprefer more open, distortion-free locales. In fact, a slight increase over the past few years. International

recent studies have shown that the effect of economic banks have re-entered countries such as Argentiina,instability and market distortions is to reduce signif- Chile, and Mexico, which have adopted market-icantly the advantages offered by ccrtain countries based policies with some success, but generally inbecause of their location. Even where the policy the capacity of intermediaries for other lenders.framework might be designed to encourage invest-

ment, either labor or capital market distortions have PORTFOLIO INVESTMENTbeen shown to reduce FDI flows. Inflows offoreigin portfolio investment continue to

increase rapidly in a number of developing countries.Regional patterns of FDI flows are very varied. New This is in part due to the strong perfornance ofinvestment flows to East Asia and Latin America are several emerging stock markets, which have offeredgrowing rapidly and are much larger than flows to attractive returns to international investors even afterother regions-the value of investment in each ofthe accounting for devaluation risks. This performancetwo regions tripled over the past five years. Together, has encouiraged interniationial investors to look atthese regions have consistently accounted for over emerging stock markets. Improved business prospectsthree-quarters of total FDI flows to developing coun- in sevcral emerging markets-mainly in Southeasttries in recent years. FDI to Eastern Europe is also Asia and Latin America-as well as better regulatorygrowing briskly, although from a much smaller base, and market infrastructures and the increasingand now accounts for 10 percent oftotal FDI flows to capacity of local institLtLionis have allowed emergingdeveloping countr-ies. FDI is expanding less rapidly markets to attract and intermediate greater volumesin South Asia, the Middle East and North Africa, and of foreign portfolio investment.

sub-Saharan Africa.

In the past much of the foreign portfolio investment

Compared with FDI, the other forms of private finan- in emerging markets was in the form of pooledcial flows to developing coLntries are quite small. investment vehicles such as country funds. Over the

8 mc CLIMAI tE cR PR1\'XIE OVE5YME\xN

PERCENTAGE CHANGE IN STOCK MARKET INDEXESFOR SELECTED EMERGING AND DEVELOPED MARKETS

July 1, 1991-June 30, 1992

COLOMBIA

ARGENlINA

PAKISTAN

INDIA

PHILIPPINES

CHILE

MEXICO

MSCI EUROPE

VENEZUELA

U.S. (S&P 500'

THAILAND

JORDAN

MALAYSIA

BRAZIL

PORTUGAL

IFC COMfPOSITE

GREECE

INDONESIA

TAIWAN (CHINA)

MSCI JAPAN

KOREA

NIGERIA

TURKEY

ZIMBABWE

-80 -60 -40 -20 0 20 40 60 80 100 120 140 160 180 200 220 240

X Emergingmarkets E Developed markets 3 Index of 20 emerging markets

Nose: Chanes are measured sU.S. Iotar terms Souerce For er-eepgg martent, FC P-erging Markets Data Ease; t o. ether sta- k m,arkets MSCI Perspective.

past two or three years there has been a marked The existence of active securities markets in develop-

trend, especially in the more advanced developing ing countries and growing access to international

coountries of Southeast Asia and Latiin Aimerica, for mnarkets have already helped to ease the difficulty

companies to access foreign portfolio investment companies in these countries have had in raising

directly by issuing securities in the international long-term financing for capital expenditures and

markets. Now that companies in developing expansion. In 1991 alone, over 1,000 companies in

countries are gaining access to equity-based the 20 largest emerging markets raised an estimated

instruments such as American Depositary Receipts $18.2 billion through new share offerings-this

and Global Depositary Receipts, some of the figure is equivalent to nearly three-quarters of total

practical constraints faced by international inves- FDI flows to the entire developing world that year.

tors buying emerging markets equities are being

overcome. INVESTMENT PROSPECTS

For developing countries to experience rapid eco-

The importance of poI-tfoJio investiment in ermerg- nomic expansion, growth in the industrial countries

ing markets is expected to grow during this decade will have to improve. The prospects for the near term

as more companies source foreign capital by either are only moderately encouraging. A modest recovery

making their issues abroad or, where domestic has begun in the United States early in 1992, and

markets are well developed, selling locally listed growth is expected to improve somewhat in France,

shares to foreign investors. The entry of foreign Germany, and the United Kingdom. Of the larger

securities firms in domestic markets as intermediar- industrial economies, only Japan's is expected to

ies is likely to prove helpful in channeling foreign grow more slowly in 1992 than in 1991. Overall,

portfolio investment. The abilities of such companies the growth of the industrial countries is projected

to bring issuers and investors together across to increase to only 1.8 percent in 1992, but to rise

national boundaries would benefit both inter- somewhat in 1993, and long-term real interest rates

national investors and domestic companies. are likely to remain high.

9

Even a weak recovery, however, is likely to stimulate

growth in developing countries. And, although real

commodity prices are likely to remain relatively low

for some years, they are expected to increase slightly,

In addition, debt-service ratios have been declining

in highly indebted middle-income countries, as

interest rates fall in the United States and Japan.

These factors, along with successful stabilization

and reform programs in several developing coun-

tries, should result in slightly higher rates of growvth

in 1992. The overall rate of growth in developing

countries (excluding Eastern Europe) is expected

to increase from 3.4 percent in real terms in 1991,

to 4.3 percent in 1992, with somewhat faster growth

in the years beyond.

East Asia, where growth rates are expected to remain

high, offers encouraging investment prospects.

Economic recovery in Latin America, after the

so-called "lost decade" of the 1980s, should con-

tinue, as a number of countries pursue market-

oriented policies. Growth should increase in the

Middle East and North Africa because of reconstruc-

tion efforts and, more important, because of market

reforms in several countries. Future growth in South

Asia remains a question, although there has been

significant and encouraging liberalization in India

and Pakistan. Many countries in sub-Saharan Africa

have also begun economic reform programs but, on

the whole, prospects for that region remain difficult.

Certainly the growth prospects of developing coun-

tries will improve if barriers to trade are reduced.

Positive resolutionl of the remaining problems in

the Uruguay Round of GATT negotiations is vitally

important to the expansion of exports from develop-

ing countries, particularly manufactured exports.

If agreement can be reached on several non-tariff

barriers to trade (for example, the Multifiber

Arrangemeint, agricultural subsidies and quotas,

antidumping regulations, "voluntary" export

restraints), the climate could be improved for sub-

stantially increasing exports from developing coun-

tries to the industrial countries.

10 rHE CLIMATE FOR PRIVATE INVESTMENT

P R I VA T I Z A T I O N

IFCprovided

a vile 0Q_fifi!;;

Argemintia's

Mitlistry of-

Defense on thePrivatization ofi :

Altos HorizosZopla, c specialty - -

WHY COUNTRIES PRIVATIZE Privatizations are occurring, with varying speed, in

Transferring ownership of manufacturing or service- countries in Latin America, South Asia, East Asia, the

providing enterprises from governments to private Middle East, and Africa. Over 800 companies have

parties-the process of privatization-has become been privatized in Latin America-primarily in

one of the most pervasive global phenomena of the Argentina, Chile, and Mexico-373 in Africa, 122 in

last decade. According to a recent study by the IBRD, Asia, and 58 in the Middle East and North Africa. A

approximately 80 countries have moved privatization diversity of companies have been privatized, from

to the top of their public policy agenda in recent years, small-scale enterprises to large state-owned compa-

and more than 7,000 enterprises have been privatized. nies involved in infrastructure (for example, trans-

These numbers do not include 100,000 small retail port, telecommunications, and electricity generation

and distribution companies that have also been sold to and distribution).

private parties. Despite the impressive numbers,

however, the results of privatization programs have A variety of reasons can be cited for the worldwide

been mixed, as some countries have been considerably trend toward privatization. The root cause, particu-

more successful than others in implementing them. larly in Eastern Europe and in Latin America, is the

realization by governments that state enterprises are

Privatization is the sine qua }lon of the conversion of generally much less efficient than private companies

the centrally plannled East Furopean and CIS econo- in makinig products and providing services. Even in

mies to market economies. In the former Soviet-bloc utility sectors that are so-callcd "natural monopolies,"

countries, privatization is not simply a matter of where regulation is important, it has been demon

transferring assets of a few state-owned companies to stratedthat companies with private ownership deliver

private investors; it is fu ndamiiental to the transforma- services more efficiently. Ownership matters.

tion of an entire political and cconomic system. The

task is enormous, as hundreds of thousands of state State enterprises are often less efficient because

enterprises, from small retail stores to huge industrial they are not given appropriate profit incentives

complexes, have been, or will be, transferred to private and are rarely held accountable for performnanice.

ownership over the next few years. The most critical performance indicator for a private

company is profit. Managers of government-owned

The trend toward privatization is by no means companies, however, often have multiple non-

confined to the former Soviet-bloc countries. conmmercial and political objectives and may have

11

restricted decision-mrnaking powers. They may, for is part of a program of economic reforms intended to

example, be expected to increase employment, produce a more open economy. It does little good, in

irrespective of the cost or efficiency of doing so. terms of economic efficiency, for a government to

Or they may be required to sell goods at artificially sell an enterprise and then provide continuing pro-

low prices. Consequently, it is difficult to hold these tection or subsidies to the new private owners. Com-

managers accountable for financial results or failures petition is an essential discipline. WAhere competitive

to improve efficiency. They can always provide plau- conditions exist, experience shows that privatization

sible explanations for unprofitable operations, and can yield significant benefits.

there is usually no effective penalty for financial

failure. At best, there is little incentive to risk changes IFC'S ROLE

that might improve operations. At worst, the lack IFC's role in the area of privatization has been grow-

of accountability and of transparent performance ing rapidly over the past few years as part of a World

criteria may encourage corruption. Bank GTroup effort to foster private sector activity

in developing member countries. While other inter-

State enterprises may also undermine competition in national institutions offer advisory assistance on

the marketplace. They face no credible bankruptcy macroeconomic or privatization policy issues, IFC

th reat, as experieence sh ows that govern ments usually ha1s focused no1 the i miplementation of model priva ti-

bail them out when losses multiply. Frequently, zation transactions. IFC has been able to make a

where government-owned companies compete in valuable contribution to the implementation of the

markets with private firms, the former survive only privatization process, either by advising govern-

because governments have been willing to provide ments and enterprises on the process, or by investing

protection or subsidies or both. in the newly privatized companies.

The increased financial burden put on government IFC's assistance may be provided in either the sale or

budgets by state enterprises also helps to explain the the purchase of privatized enterprises. IFC may ad-

growingprivatizaliorn mnovemenit. External financinig vise sellers on1 strUcturinig, negotiatinig, and imple-

of losses or of the capital needed for necessary invest- menting specific privatization transactions. Or it

ment programs has become more difficult for many may act as an adviser and investor in the acquisition

governments. The largest source of finance for devel- of state-owned properties and help buyers raise some

oping countries in the 1970s, commercial bank lend- of the financing needed by the privatized companies.

ing to governments, has practically disappeared. IFC's special character as an international institu-

Given this situation, the transfer of companies to the tion, as well as its background in project financing

private sector eliminates a persistent drain on gov- and its experienced staff, all contribute greatly to its

ernment resources. Some countries, notably Chile ability to provide understanding, credibility, and

and Mexico, have found that privatizations can resttl transparency in the privatization process.

in substantial, though temporary, cash flows that can

be used to fund other activities. IFC has a close relationship with its member country

governments, which are all IFC shareholders and are

As a result of these changes over the past decacle, represenrted on its Board of Directors. In additioni,

there are few policymakers who doubt that free IFC has extensive knowledge of, and contact with,

competitive markets and a prominent role for private many major industrial groups in the world, and has

enterprise are essential components of a successful an established record as a useful business partner and

economic development strategy. commercially motivated investor. These factors help

IFC to play an "honest broker" role between govern-

Privatization is not an end in itsclf, however. Rather, ments and investors, and may also increase the pub-

the goal is development of a competitive private lic's confidence and acceptance-an essential

sector. Under private ownership, management ingredient for successful privatizations.

incenitive structures change markedly, leading to snore

focused, profit-seeking behavior. These motivations In providing assistance, IFC is ablc to make in-depth

can lead to greater efficiency, provided privatization operational and strategic assessments. tt has in-house

12 PRIVATIZATION

technical, financial, legal, and economic staff, many To date, IFC has been involved in more than 40

of whom had experience at senior levels in their in- privatization assignments in either an advisory or an

dustries or professions before joining IFC, and who investment capacity. Although IFC's privatization

are accustomed to working in countries around the activities date back to 1986, most of its assignments

world. With its experience and resources, IFC can have been undertaken since 1990 when it established

take wider developmenital concerns into account its Corporate Finanice Services Department, which

when working on a privatization-for example, the assists clients with corporate restructuring and

effect on employment, investment needs, and future privatization. Reflecting recent developments in

operating conditions. Eastern Europe, a number of IFC's advisory assign-

ments have been in that rcgion (Czechoslovakia,

IFC's approach to privatization is tailored to Poland, and Russia), but IFC has also been active in

circumstances in individual countries. In countries Argentina, the Philippines, Portugal, and Morocco,

where privatization is just beginning, or is being and its privatization activities have been regionally

attempted on a mass scale, IFC's aim is to help dispersed.

creale model privatization transaictions. In carrying

out some of the first privatizations in a particular- IFC also seeks opportunities to help private compa-

country, IFC addresses and resolves problems nies to negotiate the purchase of, and obtain financing

that could also hamper later privatizations. In some for, the rehabilitation of state-owned firms. The

countries, IFC's contribution can add the most value Corporation has participated in 20 privatization

by focusing on the first privatizations of large, transactions through its investment activities. These

complex state enterprises. In other countries, IFC's projects have ranged in size from less than $5 million

assistance has been instrumental in starting the to over $190 million. In addition to providing its own

privatization process in other ways appropriate to funding, IFC has sought to mobilize as much external

the circumstanices, such as an auction of small finanlcial participation as possible. In this fiscal year,

enterprises in Russia. half of the privatization projects approved by IFC's

management have been in Eastern Europe, and somc

In countries where privatization programs are fully of these are quite large. Smaller IFC investment

developed and are being implemented, typically projects in Eastern Europe have included the

in Latin America and Asia, IFC focuses its activities privatization of a lighting products firm in Poland and

on particularly difficult state enterprises whose a banking enterprise in Czechoslovakia. Elsewhere,

successful privatization has the potential to create projects have ranged from a number- of small

substantial added value and significant economic privatizations in Africa, primarily of financial

benefits. institutions and of textiles, wood-processing, and

9 3Russi ddin,.

fee /1auction held by_di7e Citv o(.Nizlr y

Novgorod, 4whT!is sellitlg 2,000 , f{('. _ j , ; _

stulall nicipal'

hc[lped to design i,,jand imvpleetit the _

aun ctia ii, wh;chtriark-ed the lawill_Z i7chT4@i

privatizat.ion % g Z 1

13

pharmaceutical companies, to large projects focusing first on completing smaller or simpler asset

in telecommunications (Chile) and mining and sales. Such sales allow the opportuni-y to demon-

metals (Venezuela). strate early success and to avoid costly learning mis-

takes. The experience acquired can then be applied in

SOME OBSERVATIONS progressively larger or more complex: transactions.

IFC's privatization work has given the Corporation

practical experience and some insights into the In addition to policy and process issues at the macro-

process-what works and what doesn't-and what economic level, privatization raises n amerous issues

features are present in successful privatization at the transaction level, for example: (1) how a com-

programs. pany should be sold (by auction, public offer, or ne-

gotiated sale); (2) to whom it should be sold (to

It goes almost without saying that privatization ben- foreigners, the public, the workers, local groups);

efits from a positive macroeconomic framework that (3) whether a company should be restructured prior

makes investment attractive. Typically a positive to sale; (4) how it should be offcred for sale (with

frarnework is designed to foster competitive and free or without liabilities, with or without labor obliga-

markets, and encourage private initiative. Specific tions); and (5) what is an adequate sale price. An-

aspects of such a framework include fiscal discipline, swers to these questions usually need to be worked

liberal trade policies, realistic and stable exchange out in recognition of the enterprise's circumstances,

rates, and freedom from price controls and other the governmernt's objectives, and practical realities.

measures that inhibit competition. Countries with Case-by-case solutions, although time-consuming,

successful privatization programs have often recog- are hard to avoid. 'T'he effort required makes privati-

nized the positive role foreign direct investment can zation one of the most administratively complex

play, and have provided inducements and legal assur- challenges governments face in efforts to develop

ances to foreign investors. The participation of domes- market-oriented economies. The scale of the prob-

tic investors is even nmore importanit, and privatization lem of transformation in Central Europe and in the

programs can serve as a catalyst to broaden public former Soviet republics is particularly daunting.

participation in local capital markets. Supporting privatization in its member countries is

one of IFC's top priorities for the 1990s.

An essential element in a successful privatization

program is strong public support. Information

campaigns to increase public understanding of the

process and its objectives are important. In this

regard, the decisionmaking process must be shown

to be transparent and fair.

Finally, governments need to be prepared to over-

come bureaucratic and political resistance to privati-

zation. Action requires strong and sustained political

will, Privatization has succeeded where policy deci-

sions and coordination are centralized in a strong,

motivated, and competent government team held

accountable for speed and transparency.

A host of practical problems arise in the sale proccss.

Among other things, there is a need to reconcile the

interests of directly affected groups, sort out legal

problems, and work out bidding procedures. Some

of these problems cannot he seen clearly until the

process is well under way. For this reason, it can be

useful to conduct a privatization program in stages,

14 PRIVATIZATION

PRIVATIZATION OF A LARGE INDUSTRIAL ENTERPRISE: SKODA PILSEN

Skoda Pilsen, one of Czechoslovakia's largest industrial enterprises, is being restructured and privatized as part of

the Government of Czechoslovakia's program of economic reform. The company is located in and around the city of

Pilsen. Tt has nearly 40,000 employees and annual sales of roughly $2 billion, calculated at international prices. Its

18 operating divisions mnani ufacture everythingfrom castings andforgings to trolleys and loco motives, fromn machine

tools and steel rolling mills to turbines and nuclear reactors. Over the past year, lEC has provided assistance with the

restructuring of some of Skoda's operations-in particular, it advised Skoda on the establishment of two joint ventures

with foreign partners.

Skoda is a microcosmti of the probleems, issues, and opportunities confronting the economies of Eastern Europe.

Like many other industrial enterprises, it is operating in an environment undergoing a radical transformation, as

Czechoslovakia movesfrom a command to afree-mnarket economy. Stripped of its traditional markets, Skoda is being

forced to confront its ownl inefficiencies in produiction, management, and marketing.

IFC's work consisted of two phases. Duiring the first phase, IrC sent a 21 -person team-financial analysts, engineers,

industry specialists, and consultants to Pilsen to conduct a strategic review of the company, division by division,

identifying Skoda's strengths and weaknesses and making recommendations to Skoda's management. The teamn found

that Skoda's strengths and weaknesses were typical of comnpanies throughout Eastern Europe. In itsfavor, Skoda had

a strong industrial tradition, excellent engineerinlg and technical skills, low labor costs, existing engineering and

manufacturing capacity, and access to East European markets. However, it also had a number of problems that need-

ed to be addressed. Skoda had traditionally operated as a production unit rather than a business enterprise and had

little experience with international competition. Its equipment andproduction operations needed to be changed, and

new business and marketing methods were required.

The second phase of lFC's advisory work involved the establishment of two new joinit ventures, onefor the power

generation operations of Skoda Pilsen and its affiliate, Skoda Praha, and the other for Skoda's locomotive manufac-

turing operations. IFC helped Skoda solicit interestfrom a wide range of international investor groups, all of which

were considered to have the capacity to assist in solving the company's management, mnarketing. andfinancinig

problems. After selection of a short-list, negotiations were conducted, which led to a sale agreement. The agreement

provided not onlyfor theppurchase price but alsofor other commitments regarding investment, employment, training,

management assistance, and technology transfer.

Skoda selected Siemens AG of Germany as its partnerfor both of thejoint ventures and signed ouitline agreements

before the end of 1991. Skoda and Siemens have set up working groups to complete detailed preparations, business

plans, and agreementsfor the formation of the joint ventures.

15

PRIVATIZAI'ION OF SMALL-SCALE ENTERPRISES IN NIZHNY NOVGOF.OD

IFC played the leading role in helping Russia launch its first privatization program. It designed and implemented

the country's first mass privatization of small-scale enterprises, in the city of Nizhny Novgorod (formerlyv Gorky), the

capital of the Nizhny Novgorod region. This city, which has apopulation of 1.45 million, wasfounded in 1221, at theconfluence of the Volga and Oka rivers in the heart of European Russia. It was Russia's main trade and commercial

center before the 1917 Revolution. Until September 1991 it was a closed city with restricted access to outsiders.

The Nizhny Novgorod mass privatization involves the auctioning of 2,000 retail shops, food stores, and communal

facilities owned by the city. Its design was based on the requirements of Russia's privatization law ana regulations, the

city'sparticular needs, and the experiences of IFC and others involved in privatizationt in Poland and Czechoslovakia.

To expedite the process, IFC, working under the World Bank Technical Assistance Program, assemb.ed an interna-

tional team of experts. Staff and consultants were brought to Nizhny Novgorodfrom Poland, auctioneers and imple-

menters of small-scale privalization from Czechoslovakia, and lawyersfrom Sweden and the United States. Russian

officials went to Czechoslovakia to watch the auctioning of municipal property in Prague.

The auctions began in March. In designing the program, IFC emphasized speed, efficiency, and trarsparency. All

Russian citizens were allowed to participate, and incentivies were offered to shop employees. Transfer of control was

almost irmmediate-the new owners took over twa days after the auction. Auctions are now held weekly and are

attended by hundreds of local citizens, as well as officials from other regions and cities. Despite initiail misgivings by

members of the workers' collectives about the program, many of the premises sold have been bought by the collectives.

Incentives offered to the collectives include a 3opercentdiscount on the saleprice and a one-year installmentpayment

program. About 75 percent of the enterprises'former employees have been re-hired by ithe new owners; part of the

auction proceeds go to a fund to help workers affected by the privatizations.

The Nizhny Novgorod privatization model is being adopted bv cities throughout Russia. IFC has been asked to

prepare a manual for the Ministry of Privatization on how to privatize small-scale municipal enterprises, based

on the Nizhny Novgorod experience.

PRIVATIZATION OF AlTOS HORNOS ZAPLA IN ARGENTINA

IFC was the adviser to theArgentineMinistryofDefense in theprivatization ofthesteel companyAltos Hornos Zapla

(AHZ), thefirst successfillprivatization of the Fabricaciones Militares Defense Ministry holdings in Argentina. AHZ

is a steel mill located itn Palpala, Province of Jujuy, approximately 1,000 miles northwest of Buenos Aires. The steel

mill, which is capable of producing specialty and high-quality steels, was experiencing significant losses at the time

the privati2ation process started, and suffering from low productivity and substantial operational inefficiencies.

IFC designed and implemetnted a privatization strategyforAIIZ that wouldfulfill the Government's objectives of

removing a loss-makingfirm from the budget and ensuring that the mill continued to operate. Moreover, the priva-

tization had to be implemented in a relatively short time. IFCpromoted the mill to interested parties in Asia, Europe,

and South America with experience in steel manufacture.

Theformulafor evaluating the bids gave weight not only to theprice offered, but also to the number ofjemployees that

would be retained and the amount of investment the buyer was prepared to make. On March 31, 1992, the Ministry

of Defense awarded AHZ to a consortium including an Argentine engineeringfirm and a French specialty-steel-

maker; the mill was transferred to its new owners on July 1, 1992. IFC is the privatization adviserfor ECA, another

company owned by the Ministry of Defense. The valuation of ECA has been completed, and the privatization strategy

is beingfinalized.

1 6 PRIVATIZAI ION

R F P () R T O N 0 P F R A T I O N S

l'he Corporation approved a total of $3.2 billion The amount of financing approved for IFC's own

in financing for 167 new projects during fiscal account increased for most regions, with the biggest

1992, compared with $2.9 billion in financing for increase in the Middle East and North Africa.

152 projects in fiscal 1991. Of the total approved,

$1.8 billion is for IFC's own account. The remaining Seventy-nine of the projects approved in fiscal 1992,

$1.4 billion will be mobilized through loan syndica- representing $780 million in financing, were located

tions and securities underwriting; it was a record in countries with per capita incomes of $830 or less.

year for the Corporation's mobilization activities. Loans and investments approved for projects in the

In addition, private placements by IFC of securities poorest countries accounted for 47 percent of the

of client companies came to $27.5 million. The total number of projects and 45 percent of the financing

costs of the projects approved in fiscal 1992 are approved for IFC's owvn account.

estimated at $12 billion. IFC's advisory operations

also increascd in fiscal 1992, particularly in connec- SEC'1'ORAL BREAKDOWN OF PROJECTS

tion with privatizations, as a number of developing The Corporation approved financing for projects

countries around the world began making the tran- in a broad range of sectors in fiscal 1992, in-

sition to market economies. cluding financial services, tourism, mining,

petrochemicals, electricity, oil and gas exploration,

PROJECTr FINANCING telecommunications, agribusiness, and general

Financinig approved by IFC for its own account imanufacturinig.

in fiscal 1992 includes loans of $1.2 billion;

guarantees, swaps, and standby arrangements IC achieved its objective of increasing its support

of $251 million; and equity and quasi-equity for capital market development in its member coun-

investments of $375 million. The average size of tries. Loans and investments for a broad variety of

IFC's investments was $11 million. All of IFC's financial institutions-for example, conmmercial

loans were made at market rates, with maturities and investment banks, leasing companies, discount

ranging from four to fifteen years, and grace periods houses, insurance companies, and venture capital

of onie to nine years. Interest rates ranged from funds-accounted for 17 percent of financinig ap-

100 to 300 basis points over six-month LIBOR proved for the Corporation's own account.

for variable loans or the swap-based equivalents

for fixed-rate loans.

FY92 APPROVAI.S BY SECTORAs in previous years, IFC offered loans denominated (miOllons of Us. dollars)

in the ma jor international currencies, at either fixed Timnber, pulp, and paper Cenent and$133 construction materials

or variable rates, at the client's choice; 93 percent $134

of the loans appr-oved during fiscal 1992 wcre Food and agribusiness

denominated in U.S. dollars. tumam,fucoring,Textiles ~ ~ ~ ~ ~~~atomotive

Policy and regulatory changes affecting exchange T industrialeuipmnent

rates and securities markets in several niember ,2u 4

countries made it possible for- IFC to achieve one

of its objectives for fiscal 1992-increasing its equity X396

and quasi-equity investments. Total equity and

quasi-equity financing approved accounted for Capital

21 percent of the volume of financing approved for marketendevelopment

the Corporation's account. Chemicals' fnancepetrochemicals, financial servicesfertilizers a445

GEOGRAPHIC DISTRIBUTION OF PROJECTS $624Mning, nonferrous

Consistent with its goal of achieving geographical Touirism, other services Mnetals, iron, steel

diversity in its project financing activities, IFC $574 $486

approved projects in 51 countries in fiscal 1992. Total $3,227

17

Funding was approved for a number of newly priva- industrialized countries have introduced exemptions

tized companies in Eastern and Central Europe, in- from country-risk provisioning requirements for

cluding the first commercial bank to be privatized participations in IFC's loans. Since initiating its

in Czechoslovakia. Two projects approved in Latin syndications program in the 1960s, IFC has placed

America have important environmenltal implica- over $4.6 billion in loan participationis with 319

tions: a reforestation project in Ecuador and a credit finiancial institutions; it cLurrently admninisters for

line to a bank in Argentina to finance the conversion the account of its participants a loan portfolio of

of buses to compresscd natural gas. IFC also ap- over $2 billion. Of the total volume of syndicated

proved financing for a number of infrastructure loans approved in fiscal 1992, 42 percent will go to

projects, promoting private sector participation in borrowers in Latin America, followec. by 26 percent

industries that were once the preserve of the state. to Asia, 15 percent to Europe, 11 percent to sub-

These projects include a toll road in Mexico; tele- Saharan Africa, and 6 percent to the Middle East

communications companies in Costa Rica, Hungary, and North Africa.

Jamaica, and Romania; an oil pipeline in Zimbabwe;

and power generation and transmission in India. The largest syndications approved and processed

during the year included loans to Cornpanlia de

RESOURCE MOBILIZATION Tel6fonos de Chile, for a telephone expansion projectMobilizing funds from other investors and lenders in Chile ($113 million); Ashanti Goldfields Corpora-

for projects is one of IFC's essential functions. In tion (Ghana), Ltd., for a gold-mine expansion

fiscal 1992, as in fiscal 1991, for every $1 of project project ($110 million); Metor S.A., for the Jose

financing approved by IFC for its own account, methanol project in VTenezuela ($100 million);

other investors and lenders provided $6-either P.T. Bakrie Kasei Corporation, for a terephthalic

directly, through the Corporation's loan syndica- acid plant in Indonesia ($95 million); Pilipinas Shell

tions or underwriting of investment funds and Petroleum Corporation, for a new refinery in thesecurities issues, or indirectly, in the form of Philippines ($85 million); a group of four commer-

cofinancing. cial Moroccan banks ($70 million); Bahia Sul

Celulosc S.A., for a pulp and paper plant in BrazilSYNDICATIONS ($60 million); Ram Dis Ticaret A.S., part of Turkey's

Fiscal 1992 was another record year for IFC's Koc Group ($55 million); and P.T. Swadharma Kerry

syndications program. The volume of loan syndica- Satya in Indonesia, for the construction of the

tions approved by the Board of Directors reached Shangri-La Jakarta Hotel ($51 million).

$1.4 billion for 39 projects, up from the previous

year's record figures of $1.3 billion for 33 projects. Continuing the pattern of recent years, the largest

'the volume of syndicated loan signings was at a participants in IFC loans signed in fiscal 1992 wererecord level of $913 million. A total of 67 banks from European banks (82 percent by volume). Asian

22 countries participated in IFC loans during the banks took 16 percent, and North American banks

year, taking an aggregate of 190 individual loan 2 percent. While the preponderance of European

participations. banks remains strong, it is one of IFC's objectives

to broaden the geographical distribution of partici-

IFC's ability to mobilize commercial hank resources pants in its loans.

through its participation mechanism is an important

factor in its success in financing projects in the SECURI'I ES UNDERWRITING

developing world including many countries where In fiscal 1989 IFC created the International Securities

banks are still reluctant to increase their direct loan Division (ISD) within the Capital Markets Depart-exposure. While participants share fully in the ment to mobilize funds for private sector companies

commercial risks of projects, historically they have in developing countries in the international capital

also enjoyed the advantages, particularly as regards markets through pooled investment vehicles such

country and transfer risks, that IFC has always as "country funds" that invest in emerging stockderived from its status as a multilateral development markets, and through international securities issues.

institution. Banking regulators in a number of IFC's assistance takes the form of structuring,

18 REPORT ON OPERATIONS

LOAN S YN DI CAT IO NS SIGN ED IN F IS CAL 1 9 9 2

REGIONAL BREAKDOWN

BORROWERS PARTICIPATING BANKS

Latin America and Caribbean ($365.0 million) U Europe ($745.0 million)

C Asia ($267.0 million) U Asia ($148.5 million)

* Europe ($135.5 million) W North America ($14.5 million)

* Middle East and North Africa ($81.0 million) U Other ($5.0 million)

Sub-Saharan Africa ($64.5 million)

PARTICIPANTS IN IFC SYNDICATIONS

ABN-AMRO Bank NV Credit Suisse Nederlandse FinancieringsArab Banking Corporation B.S.C. The Dai-Ichi Kangyo Bank, Ltd. Maatschappij voorAsian Banking Corporation Den Danske Bank A/S Ontwikkelingslanden N.V. (FMO)

Asian Finance & Investment Deutsche Bank AG The Nippon Credit Bank, Ltd.Corporation Ltd. Die Erste bsterreichische Spar-Casse- NMB Postbank Groep N.V.

ASLK-CGER Bank Bank NordbankenBanco Exterior de Espafna Dresdner Bank AG The Norinchukin BankBank of Ireland Ecobank Transnational Incorporated Oversea-Chinese Banking

The Bank of Tokyo, Ltd. Girozentrale und Bank der Corporation Ltd.

Banque et Caisse d'Epargne de l'Etat osterreichischen Sparkassen AG Raiffeisen Zentralbank 0sterrcich AGLuxembourg Hanil International Finance Ltd. Saehan Merchant Banking

Banque Francaise du Commerce Hill Samuel Bank Ltd. Corporation

Exterieur The Hongkong & Shanghai Banking Soci6te Generale

Banque Indosuez Corporation Ltd. Standard Chartered Bank PLC

Banque Internationale a Luxembourg The Industrial Bank of Japan, Ltd. Sddwestdeutsche LandesbankSA KKBC International Ltd. Girozentrale

Banque Nationale de Paris Korea International Merchant Bank The Sumitomo Trust and Banking

Banque Sudameris Korea Long Term Credit Bank Company, Ltd.Banque Worms Korean Frcnch Banking Corporation Swiss Bank Corporation

Barclays Bank plc Kredietbank NV Swiss VolksbankBayeriscde Landesbank Girozenitrale The Long-Term Credit Bank of Japani, Tat Lee Bank Ltd.Bayerische Vereinsbank AG Ltd. Union de Banques Arabes et

Berliner Bank AG Malayan Banking Berhad Francaises-UBAFThe Commercial Bank of Korea Ltd. Manufacturers Hanover Trust Union Bank of Finland Ltd.

Commerzbank AG Company Union Bank of SwitzerlandCooperatieve Centrale Raiffeisen- The Mitsubishi Bank, Limited Westdeutsche Landesbank

Boerenleenbank BA (Rabobank The Mitsubishi Trust and Banking Girozentrale

Nederland) Corporation Z-Landerbank, Bank Austria AG

Credit Lyonnais Morgan Guaranty Trust CompanyCredit National of New York

19

PROJECT APPROVALS BY REGION, FY92 AND FY91

F Y 9 2 F Y9 1Financing Financing

Total for IFC's Total for IFC'sNumber finlancinig' own account Numiber finanLcing owTI acccurnt

(in millions of US. dollars] IOl-Ons oj US doU. rs)

Sub- Saharan Africa 50 441 284 42 319 194Asia 34 813 456 39 1,178 534

Europe 23 465 233 15 292 189Latin America and the Caribbean 45 1,253 607 43- 886 502Middle East and North Africa 15 25 174 8 64 64W\Torldwide2 - - - 3 108 58Total 167 3,227 1,774 152 2,846 1,540

1. Dollar asnoan: refers to totaldfnaocing approvedfor IFC', account, loan syndications, and vnderwritng.

2. Multicountry Loan Facilities and Comnmoonwealth Equity Fond.

underwriting, and placing securities, and IFC always issues accounted for $553 million, debt issues for

acts as co-lead manager, working in partnership with $357 million, and country funds for $95 million.

leading financial institutions; to date it has worked Among the pioneering issues in which IFC was

closely with more than 25 international investment involved during the year were a $228 million global

and commercial banks, which have served as lead equity issue by the Mexican company Vitro, one of

managers. IFC is involved in country and other fund the first Latin American companies to access the

instruments principally when they are among the international equity markets; a $53 million issue

first few in a given country or region, or if they open by Corinion, the first international equiity offering

up a new international capital market. Similarly, lFC by a Venezuelan company; a $72 million initial

typically is involved in an emerging markets corpo- public offering by Grupo Posadas, a medium-sized

rate issue if it is the first of its type for an IFC client, Mexican company; a $208 million revenue bond

or if it opens Lip a new interniational capital market issue for the Mexico City-Toluca Toll Road, Mexico's

for the client. IFC does not engage in secondary first private sector revenue bond issue; a $50 million

market-making or trading activities. floating rate note issue for Interbank, the first issue

of its kind by a private Turkish bank; and the

The emphasis of IFC's securities activities in fiscal $52 million Latin America Capital Fund, which is

1992 shifted from counitry funds, which are now a the region's first fund specializinig in stocks ofssmaller

well-established product, to the underwriting of companies.

international corporate issues. Many cormpanies in

developing countries experiencing economic growth RISK -MANAG EM INT S ERVI CES

find that their financiing needs have increased signif- The Corporation is helping conspanies in developing

icantly. Some of these companies are attempting to countries to gain access to derivative products that

fill a significant portion of their financing needs by would otherwise be unavailable to theni. Since fiscal

issuing securities in the international capital mar- 1990, when IFC executed its first swaps on behalf

kets. Many foreign institutional investors, because of clients, demand by companies in developing

of their positive experience with country funds, are countries for services and products related to finan-

increasingly willing to purchase securities issues by cial risk management has grown significantly. Swaps

the companies in wvhich the funds invest, particularlv and other derivative products (options snd forward

if the securities can be traded easily and efficiently in contracts) enable companies to manage commodity,

the international capital markets. foreign exchange, and interest rate risks by allowing

them to better match the denominations and interest

In fiscal 1992 IFC acted as a joint- or co-lead manag- rates of their assets and liabilities and minimize the

er for nine securities issues totaling $1 billion; equity negative impact that mismatches can have on income.

20 REPORT ON OPERATIONS

In fiscal 1992 IFC extended its internmediationl activ- of non-hanik finanicial institutions, the use of vouch-

ities to cover hedging instruments for commodity ers and mutual funds for privatizing state enterpris-

exposures as well as for currencies. It provided clients es, and the development of leasing legislation.

with a variety of risk-management services, includ-

ing advice on hedging strategies and the creation IFC has set up trust funds with the European

of hedging facilities to intermediate the execution Community and the bilateral agencies of several

of swaps and options over a specified time period, countries (Canada, Finland, India, Italy, Japan, the

direct intermediation of swaps, and mobilization of Netherlands, Norway, Sweden, Switzerland, and

swap coun1terparties in the interniational financial the United States) to finance activities related to

markets through guarantees or credit enhancement. the development of bankable new projects and the

IFC approved nine projects involving the provision rehabilitation of projects in difficulty. During

of hedging instruments to companies in sub-Saharan fiscal 1992 the Corporation financed 25 technical

Africa, Europe, Latin America, and the Middle East. assistance projects in 19 countries, including feasibil-

Through these projects, IFC will help clients hedge a ity studies, technology transfer, sector analyses,

total notional prinicipal amrLouIlt of $900 million and pilot operations, and set up a new trust fund

equivalent. with the European Community to finance tech-

nical assistancc in Asia. IFC has also made arrange-

ADVISORY SERVICES AND TECHNICAL ments with donor countries enabling it to increase

ASSISTANCE technical assistance in Eastern and Central Europe

In the past five years, demand for IFC's advisory and the CIS.

services has grown, particLdarly in connection with

privatizations and corporate restructurings. During The Corporation's Technical Advisory Service,

fiscal 1992 the Corporation received 30 advisory established in fiscal 1991, provided advice on

mandates, over one-third of which related to privati- projects in the agro-industry; cement, petro-

zations. In addition, it was developing proposals for chemicals, and oil exploration and development

another 10 potential assignments. sectors to businesses and governments in Europe

and Latin America.Demand for advisory services is concentrated in

Latin America and Eastern Europe, where the

Corporation advises both governments and enter-prises in its member countries on privatizations LOAN AND INVESTMENT APPROVALS,

FY88-FY92and corporate restructur-ings. During fiscal 1992 (millions of U.S. dollors)

in Argentina, for example, IFC acted as financial 3,500

adviser to the Ministry of Defense in the sale of a steel

manufacturer; it also completed a valuation of two 3,000

of Brazil's leading producers of petrochemicals. IFC

acted as financial adviser in the privatization of 2,500

enterprises in Czechoslovakia, Poland, and other 2,000

Central European countries. A pilot privatization 2,0

program involving the auction of small-scale 1,500

enterprises in Nizhny Novgorod, Russia, proved

very successful, and Russiani officials plan to use 1,000

it as a model for privatizations in other cities.

During the year, IFC worked on 30 technical assis-

tance projects related to capital market development. 1988 1989 1990 1991 1992

Two of these were regional in scope; the others were

located in 21 countries. IFC provided advice on Loan

matters such as securities market regulations, the re- Equity7i Syndiranxons and underwritingstructuring of commercial banks and establishment

21

The Foreign Investment Advisory Service (FIAS),

which is operated jointly by TFC, the IBRD, and

MIGA, provides advice to member countries on

attracting foreign direct investment. In fiscal 1992

FIAS completed 24 advisory assignments in 21

countries and one assignment in Central Europe.

FIAS's activities are described on p. 74.

IFC's operations are complemented by facilities that

help small-scale entrepreneurs develop business

proposals and raise financing for projects-the

Africa Project Development Facility, the Business

Advisory Service for the Caribbean and Central

America, the Polish Business Advisory Service,

and the South Pacific Project Facility. IFC helped

to establish these facilities, and is the executing

agency for all of them.

22 REPORT ON OPERATIONS

SE LE CTED CO RPO RATE SEC URIT IE S IS SUES

UN DE RWRI TTEN BY IF C IN F ISCAL 1 99 2

4GRMN INTERBANK A.S.

UJ.S.S50XDO.OOFloating Rale Notes Dlue 191)7

7.111=1 fl"~~~~~~~~~~~~~~~~~~~~~~~~~~r

L($ APASCO, S.A. de C.V.

CCEMENrS APASCOa SA dC VCMENTOS EpACRa., S.A. d Ca.VCONCRETOS APASCa. .A. deCV.

INN SSUE PRIE.g Ca

Grupo Posada,S.A dc C.V.(( NNNN

N NNN SI eNNraN~~~aIN INNfl( 000051nNINRNSNN 01050~~~S SaID A aNN

tz~~~~~~~~~~~~~~~~~~~~~~~~~~~~,

2 .NNN N ( NNNNNNN N N

.... . ... ...~~~~~~~~~~~~~ . N .N

23

PRIVATE SECTOR STRATEGIES DIVISION

The Private Sector Strategies Division (PSSD), which became operational infiscal 1992, enhances IFC's contribution

to the VVorld Bank Group's country assistance programs, in particular with respect to private sector development,

byprovidinginputs toprivatesectorassessments (PSAs) of selected member countries. In thePSAs, the Bank Group

seeks to identifyconstraints toprivate sectoractivityandproposes elements of a strategyofor encouragingit. In working

with the IBRD to design an integrated strategy on private sector development, IFC draws on its considerable experi-

ence infinancingprivate enterprises, helpinggoverntnents with capital market development, and advisinggovern-

ments and state enterprises on privatization.

In fiscal 1992 PSSD completed inputs to PSAs of countries in all developing regions, as described in the Regional

Reports. It also coordinated IFCGs inputfor a W4'orld Bank Group paper on the lessons of privatization, discussed by

the Board of Directors in April 1992.

To help IFC ac-hieve greater consistency in its strategy and operations, PSSD supports JFC's investment departments

in reviews of'IBRD projects and country strategy papers, and in interactions with the IBRD's country departments.

Under the new structure that took effect on July 1, 1992, PSSD will be part of the Corporate Planning Department.

24 REPORT ON OPERATIONS

R E G I O N A L R E P o R T S S U B S A H A R A N A F R I C( A

ComipanyLimied .in Tanzania

receivedaS3 million loan

fromn IFCtofiniance the

rehabililtiiorn ofa tea factor;' andthree tea estates.

INVESTMENT CLIlIATIE reached 1.6 percent in 1991; this compares with a

Most countries in sub-Saharan Africa are liberaliz- 0.2 percent decline in GDP in 1990. However,ing their economies and providing incentives to income growth continues to be outpaced byencourage greater private sector activity. [ncreas- population growth; thus, per capita incomesingly, economic liberalization is being accompa- contiinued to fall for the region as a whole, drop-nied by political reforms. While economic and ping by 1 percent in 1991.political reforms should have a positive impact onthe region's economies in the long term, in the Growth for the rest of the 1990s is proJected atshort term they contribute to the climate of about 3.3 percent, which should lead to a smalluncertainty. Furthermore, most countries in the improvement in per capita incomes. However,region are still struggling with problems that are sub-Saharan Africa's prospects for the 1990s arehampering economic developmiient, including expected to remain below those of other develop-unsustainable internal and external imbalances, ing regions, with increase in output only slightlyheavy debt burdens, and weak financial and higher than population growth. This would bephysical infrastructures; in southern Africa, a insufficient to reverse the decade-long stagnationsevere drought has made economic conditions in per capita incomes. African countries need tomore difficult. pursue more vigorous adjustment policies, in

particular those that lay the foundation for growthIn light of these problems, the climate for private led by the private sector.investmcnt remains difficult. Moreover, increasedprivate sector investment will come only after the Private investment still accounts for a very smalleconomic adjustment process begins to bear fruit. share of GDP in sub-Saharan Africa. For a sampleNevertheless, the reduction of the state's involve- of countries in the region, in 1990 private invest-ment in productive activities, an increase in ment accounted for only 9 percent of GDP, wellcompetition, and the lifting of governmelnt below the levels found in other developing regions.controls are high on the agenda of most countries However, private investment has recovered fromin the region. the low levels registered in 1986, and is now at its

highest levels since 1982. Private investment hasAlthough economic conditions remain difficult in increased more rapidly in countries that havesub-Saharan Africa, there are some encouraging implemented inLensive adjustment programs.signs. The region's GDP is estimated to have grownby 2.3 percent in 1991, compared with 0.9 percent In view of the low levels of domestic privatein 1990 and an average of 1.9 percent during the investment, greater efforts need to be made to1980s. This good performance was led by the attract foreign investment. Sub-Saharan AfricaNigerian economy, which grew by 4.7 percent in has traditionally benefited from substantial direct1991. Growth in the rest of sob-Saharani Africa investment by EnLropean companies. To avoid the

25

possible diversion of European investment flows Domestic markets tend to be small in sub-Saharan

to other regions, in particular Eastern Europe and cotntries, giving rise to a greater nurnber of small-

the former Soviet republics, the investment climate scale enterprises than medium-sized or large ones.

in sub-Saharan Africa will need to improve at an IFC has adopted a number of initiatives that allow it

accelerated pace. to provide financial and technical assistance to

smaller companies.

IFGS OPERATIONS IN THE REGION

In fiscal 1992 Equatorial Guinea joined IFC, and IFC finances smaller companies indirectly through

Comoros joined shortly after the close of the fiscal credit lines to financial intermediaries and venture

year, bringing the number of member countries in capital funds, as well as directly throu.gh its Africa

sub-Saharan Africa to 44. Enterprise Fund (AEF). AEF provides financing

of $100,000-$l million for projects costing between

IFC and the IBRD recently collaborated to produce $250,000 and $5 million. Its loans and investments

private sector assessments (PSAs) for several are processed in Africa, under the supervision of

countries in the region. PSAs are intended to IFC's Regional and Resident Representatives.deepen the knowledge of the WNorld Bank Group AEF generally finances companies wholly or

about the private sector in specific member coun- mainly owned by African shareholders, in line with

tries, identifying constraints and making recom- its objective of promoting indigenous enterprises.

mendations for removiing them, and helping the

World Bank Group formulate private sector action The Africa Project Development Facility (APDF),

plans for those countries. PSAs were completed for which provides technical assistance to entrepreneurs

Ghana, Kenya, Senegal, and Zimbabwe during fiscal in sub-Saharan Africa, was establishec. by IFC,

1992 and will be undertaken for C6te d'Ivoire and UNDP, and the African Development Bank (AfDB),Nigeria in fiscal 1993. with IFC as executing agency, in fiscal 1986. APDF's

activities in 1991 are described on p. 30.

IFC has already increased the number and diversity

of its project financing activities in several countries To alleviate the shortage of well-trained andwhere structural adjustment programs are improv- experienced managers in sub-Saharan Africa, IFC

ing the private sector environment-for example, created the African Management Services CompanyGhana, Mauritius, Nigeria, and Zimbabwe. The (AMSCo) in fiscal 1989, also in collaboration with

need for IFC financing has beeni growing in sectors UNDP and AfDB. AMSCo, which has a share

such as agriculture, manufacturing, mining, banking capital of $7 million as well as access to grant funds

and finance, and services, and there is renewed need of $14 million, provides management support and

for project financing in industries that have been training to private companies in Africa. It isdormant for some time, such as hotel construction currently providing management servi es to 13

and aquaculture. IFC is concentrating on efficient companies. Demand for AMSCo's services isimport-substituting and export-oriented industries growing, and its activities are expected to increase

that are net earners of foreign exchange. substantially in the coming year.

The largest projects approved by IFC in fiscal 1992 In the area of capital market development, IFC

-as in previous years-are concentrated in natural places particular emphasis on sub-Saharan Africa.

resource-based industries with large capital require- In fiscal 1992 the Corporation responded to thements, such as mining, and oil development. In clear need to strengthen the region's financial

many countries these types of industries have tradi- infrastructure by assisting with the rehabilitation

tionally been managed by the state; this has begun and privatization of existing financial institutions,

to change, however, and the privatization of several and by helping to finance the establishment of

large state enterprises in basic industries is now in institutions such as commercial banks, housingprogress or under consideration in countries such as finance companies, discount houses, and leasing

Benin, G6te d'Tvoire, Ghana, Guinea, Mozambique, companies. IFC approved financing for nine capital

and Tanzania. markets projects, compared with five in fiscal

26 SUB-SAHARAN AFRICA

1991. In countries where financial systems need to

be developed further before viable financial institu- LOAN AND INVESTMENT APPROVALS,

tions can be established, IFC is concentrating on FY88-FY92' ~~~~~~~~~~~~~~~~~~~(mnillions of U.S. dollars)

providing technical assistance-for example, 450

helping governments to develop the legislative 400

and regulatory frameworks for securities markets

activity and for non-bank finanicial institutions. 350

IFC is also participating in the IBRD's financial 300

scctor work in sevcral countrics.

PROJECT FINANCING AND RESOURCE 200

N4OBILIZATION

In fiscal 1992 IFC approved 50 projects (including 150

AEF projects) in 20 countries in sub-Saharan Africa, 100

compared with 42 projects in 17 countries in fiscal 50199 1. At June 30, 1992, the Corporation's committed

portfolio included loans and investments for 152 0 1 198 1 1 X1988 1989 1990 1991 1992

companies in 33 countries, compared with 133 com-

panies in 31 countries at June 30, 1991. 7 LoanU Equityi:i Syndications and underwriting

FY92 FY91(millions of U.S. dollars)

its own account and a $30 million loan syndication.

Loans and guarantees a24 170 The project, which is introducing more efficient

Fquity and quasi-equity 60 24 recovery methods, should result in increased oil pro-duction in Cameroon. In Mali, IFC approved equity

Direct mobilization 157 125rr and quasi-equity financing of$23 million for Soci6te

L oan syndications l157 125X i

Uniderwritinig - - Miniere de Syama, a mining venture with a foreignprivate sponsor. 't'his project, thc developmcnt of a

Total financing approved 441 319 piaesosrgold mine, should have a "demonstration effect,"

attracting other foreign investors to Mali. In infra-structure, IFC approved a $33 million loan, includ-

L oans and guarantees 725 622' ll--Equity and quasi-equity 727 622 ing $17 million for its own account and a syndicatediEquity and quasi-equity to 73 loan of $16 million, to help finance the construction

Committed portfolio held for of a 204-kilometer extension of a pipeline that cur-others (loan participations) 369 341

rently ends at the Zimbabwe-Mozambique borderTotal committed portfolio 1,160 1,036 The extension will connect Harare, Zimbabwe, with

the port of Beira in Mozambique.

IFC approved several large energy, mining, and Through AEF, IFC approved total financing of

infrastructure projects. The largest ofthese is the $14 million-$12 million in loans and $2 million in

$305 million expansion of Ashanlti Coldfields equity and quasi-equity investments-for 22 small

Corporation (Ghana), Ltd., which plans to increase projects in It countries. This brings total financing

its gold production to one million ounces per year approved for AEF projects since the Fund was founded

by developing medium-grade sulfide deposits. For a to $32 million for 56 projects in 18 countries. The

S123 million oil development project in Cameroon, AEF projects approved during fiscal 1992, which are

which has been in the midst of a severe economic included in the table on pp. 31-33, spanned a broad

crisis since oil production declined in the 1980s, IFC spectrum of sectors, including agriculture and agro-

approved a $30 million quasi-equity investment for processing, small-scale manufacturing, quarrying,

27

and printing. Many of these projects involve import the restructuring of commercial banks in West and

substitution, but most are export-oriented. Central Africa. The Corporation also participated

in an IBRD financial sector reform project in Ghana.

In fiscal 1992 IFC broadened the range of financial As part of this project IFC reviewed the Central

services it provides in sub-Saharan Africa. For Bank's money markeL operatioins, studied Ghana's

the first time, it intermediated currency swaps for insurance companies, and provided advice on the

African companies; it also helped one company establishment of Ghana's stock exchangc. IFC

structure a gold-hedging arrangement, as described also provided technical assistance in the creation

on p. 29. of rating agencies in Ghana. It advised the Govern-

ment of Mauritius on the preparation of regulations

In the financial sector, the Corporation approved governing the listing of securities.

several innovative projects, including investments

in Ghana's first leasing company, Kenya's first IFC also completed a major technical, financial,

financial services company, and Nigeria's first and economic appraisal of a S4.2 billion project

discount house. It also approved agency credit lines involving the production of liquid natural gas in

for the Mauritius Commercial Bank and the First Nigeria for export, and carried out a f2asibility

Merchant Bank of Zimbabwe Lihniited, and partici- study for a zinc-miining project inr Burkina Faso.

pated in a rights issue by the Development Finance Advice on privatization was provided to the

Company of Uganda. In Botswana, IFC approved Governments of Cote d'lvoire and Ghana.

a multiyear guarantee facility on behalf of ulc (Pty)

Limited, a local leasing company. The Foreign Investment Advisory Service (FIAS)

continued to expand its activities in sub-Saharani

TECHNICAL ASSISTANCE AND ADVISORY Africa in fiscal 1992; it has now assisted over half

SERVICES the countries in the region. In fiscal 1992 FIAS com-

IFC offered a full array of technical assistance and pleted projects in ten countries, began new assign-

advisory services in Africa during the year, including ments in three, and did preparatory wDrk in several

advice to small-scale entrepreneurs, technical others. Completed assignments included a general

assistance to governments in connection with capital diagnosis of investment policy issues in Angola,

market development, and advice on privatization Benin, Burkina Faso, Mali, and Mozanibique; prepa-

and foreign direct investment. ration of new investment legislation in Equatorial

Guinea, Malawi, and Namibia; formulation of for-

ln fiscal 1992 IFC participated in an IBRD study of eign investment promotion strategy in Madagascar;

financial systems in Africa and provided advice on and an asscssment of prospects for backward

linkages between foreign and local firms in Kenya.

- E E * At the close of the fiscal year FIAS was working onassignments in Malawi, Namibia, and Tanzania,and had prepared follow-up programs for each of

Orriniamn Chinti'quteornrliurn Cosnitriqoc e , M hli|these countries. In fiscal 1992 FIAS was also develop-

Cbte d'Ivoire's only ing management information systems for investmentlocalrty owned promotion agencies, primarily in Africa. FIAS

produrer of soapsand edible oils, also completed and began worldwidc distribution

diw,rsified ist of three video series, in English and French, concern-

loan frorn IEC ing foreign investment promotion; onc series wasIts sobsidiory,, focused oll sub-Saharan Africa.

Omrniura deTransformations

Alimentaires, S.A.,received technical _

assistanicefroetsAPDE andfinancng

frorn A EFi

28 SUB-SAHARANAFFUCA

HELPING AFRICAN COMPANIES WITH FINANCIAL RISK MANAGEMENT

Thie derivative-products market tends to be accessible only to highly rated companies in thle industrialized countries.

Companies in developing countries often find it difficult, if not impossible, to gain access to hedging instruments

that would enable them to better managefinancial risk. IFC helps companies in developing countries gain access to

risk-management techniques at a reasonable cost by arranging commodity, currency, and interest rate hedging

instruimentsfor them and providing credit enhancement to market counterparties.

In fiscal 1992 IFC undertook, for thefirst time, transactions involving commodity lending and intermiediation. It

approved a $140 million gold-linked loan, of which $100 million will be syndicated, tofinance the expansion of

Ashanti Goldfields Corporation (Ghana), Ltd., (AGC), a gold-mining company in Ghana. The loan, which carries

low nominal interest rates, will provide a natural hedge a,gainst the mine's extensive reserves and, with the use of

derivatives, will give the company someflexibility infixing a conversion pricefor gold on the loan.

In addition to the loan, IFC isprovidiugagold-hedginigfacility that will allow AGC to purchaseforward sale

and option contractsfrom international bunllion dealers, locking in a range of pricesfor most of its gold production.

The derivative instruments offered to AGC through thefacility are longer terrm than the one-yearforward contracts

currently available to it and are usually not available to metal producers in developing countries because of the level

of transfer risk. Bydevelopinga contracttual structure reducing the risk to dealers, IFC will enable AGC to hedge about

$100 million worth of annual gold sales, about half the company's gold production.

In conjunction with thefacility, IFC will advise the company on the use of derivative instruments and the effect on

corporatefinances of usinig a particular instrument at a given tinme. IFC will intermediate in the financial markets

the instruments selected by AGC.

IFC also arranged a swap for AGC ofa fixed-rate export credit loan off I0 million into U.S. dollars. The benefits

to the company were twofold. First, AGC eliminated the currency mismatch between its revenues, wvhich are in U.S.

dollars, and its debt-service payments in pounds sterling, reducing the impact of exchange rate movemnents on its net

income. Second, the swap enabled the company to lock in debt-service payments at a lowfixed interest rate. IFC

intermediated a similar currenicy swap for Ilotel Investmnemmts (Ghana) Limited durimigfiscal 1992.

29

AFRICA PROJECT DEVELOPMENT FACILTTY

The Africa Project Development Facility (APDF) provides advice to African entrepreneurs seeking to start new

businesses or diversify or expand existing ones. The Facility helps entrepreneurs to identify and prepare viable

projects. Although APDF does notfinanceprojects, it helps entrepreneurs obtain debt and equityfinancing

and identify business partners, foreign as well as domestic. Typically, projects assisted by APDF are small, with costs

rangingfrom $500,000 to $5 million. APDF has offices in Abidjan, Cote d'lvoire; Nairobi, Kenya; and Harare,

Zimbabwe. Fundingfor APDF's activities comes from IFC, UNDP, the African Development Bank, and the

governments of 15 industrialized countries. In addition, Brazil, India, and Israel make technical experts available

to APDF for short-term assignments.

During the twelve months endedDecember3l, 1991, APDFprovided advice on 23 projects with total investment costs

of $48 million; these projects will result in the creation of about 2,000 jobs. Four of the projects have women sponsors

or managers. Demandfor APDF's services continues to be strong: it received 500 project proposals in the course of

the year.

Since it was founded, APDF has assisted more than 100 projects with estimated costs of over $200 million, of

which it has helped raise $148 million. APDF-assisted projects have led to the creation of over 10, 000 new jobs in

23 countries.

EXAMPLES OF PROJECTS

BENIN

Sobep Fish Processing is thefirstproject in Benin to receive assistancefrom APDE The sponsor, an African

businessman who has already launched a similar project in Cote d'Ivoire with APDFs assistance, is setting up a

company to processfishfor export. APDF helped the sponsor formulate theprojectand obtainfundingfrom IFC's

Africa Enterprise Fund and Ecobank of Benin.

BOTSWA VA

Richmark Poultry, a company experiencing serious financial difficulties because of a disease that killed off most

of its chickens, was helped by APDF to obtain fundingfrom the Botswana Development Bankfor a ,1 million

restructuring project that has saved I 00 jobs.

MOZAMBIQ UE

Optimus Lamps, the first Mozambican company to receive assistance from APDF, is undertaking a $700,000

expansion program to manufacture paraffin stovesfor domestic and export markets. APDF also helped the sponsors

obtain a technical assistance grantfrom the Swedish Agencyfor International Technical and Economic Cooperation

to cover the costs of trainingpersonnel. The project is expected to result in the creation of fourteen jobs. The sponsors

of this project set up a small manufacturing unit in Zimbabwe in 1990 with APDF assistance.

30 SUB-SAHARAN AFRICA

PRO J EC TS AP PROVED IN F IS CAL 1 9 9 2

( MI L L IO NS OF U. S. DO L LA RS)

PR OJE CT DES CR IP TI ON FINANCINGTYPE TOTAL

Benin Societe Beninoise de Brasseries will be created to take over and rehabilitate the operations Loan 5.3 5.3of La Beninoise. which is the largest state-owned company in Benin and is now beingprivatized. It produces beer, soft drinks, and mineral water. Project cost: $31.2 million.

Societe Fruitex Industrie will rehabilitate a 11 3-hectare plantation to export 6,000 tons Loan 0.4 0.4of pineapples per year to Europe. Project cost: $1.5 million. (AEF)

Botswana IFC will provide a guarantee that will enable ulc (Pty) Limited', a leasing company, to mobilize Guarantee 1.5 1.5increased funding by issuing transferable certgicates of deposit. Project cost: $4.0 million.

ulc (Pty) Limited* plans to increase its share capital through a 1:1 preemptive rights issue. Equity 0.4 0.4Tnis will help the company oounter competition. Project cost: $2.4 million.

Cameroon Pecten Cameroon will invest in the continuing development of the Rio del Rey and Quasi-equity 30.0Lokele off-shore oil concessions. Project cost: $123.0 million. Syndications 30.0 60.0

Cape Verde Growela Cabo Verde, Lda, will produce 440,000 pairs of shoes per year for export to Loan 1.0 1.0Europe, using imported semi-processed leather. The project will generate more than200 jobs. Project cost: $4.0 million. (AEF)

Industria de Betoes em Cabo Verde SA.R.L., a new private construction material Loan 0.6 0.6company, will introduce pre-fabrication technology to Cape Verde. This will reduce thecost of construction materials, which are currently imported or produced in an artisanalfashion. Project cost: $1.6 million. (AEF)

C6te d'lvoire IVOIR CAFE is a pilot operation to establish the feasibility of producing instant coffee Quasi-equity 0.1 0.1from local sub-grade beans for export. Project cost: $1.1 million. (AEF)

Societe Anonyme INTERAGRI will rehabilitate and expand a pineapple farm. Production Loan 0.9 0.9is expected to rse from 1.200 to 4,300 tons of pineapples per year for export to Europe.Project cost: $2.9 million. (AEF)

Ghana Achimota Brewery Company is being privatzed and upgraded. The aim is to transform Loan 3.5it from a company producing mostly beer into a beverage company with a full range Equity 1.0 4.5of products, including soft drinks. Project cost: $24.5 million.

Ashanti Goldf ields Corporation (Ghana), Ltd.,* has asked IFC to arrange a swap of a f ixed- Swap 6.4t 6.4rate £10 million (US$18 million) export credit loan into U.S. dollars. Project cost: $6.4 million.

Ashanti Goldf ields Corporation (Ghana), Ltd.,* plans to mine and treat its sulfide reserves Loan 40.0more efficently by using mechanization and advanced processing technology. IFC is providing Syndications 100.0project f inancing and a gold-hedging facility in which IFC's exposure will be up to $25 million. Hedging 25.0 165.0Project cost: $305.0 million.

BMK Ltd. (Primewood) will recyle woodwaste to make particle boards for sale in the Loan 1.1 1.1domestic market. Project cost: $4.8 million. (AEF)

Combined Farmers Ltd., the leading grower and exporter of fresh pineapples in Ghana, Loan 0.4 0.4will expand and modernize its operations to increase exports from 2,700 tons to 6,600 tonsper year. APDF did a feasibility study Project cost: $1.2 million. (AEF)

Ejura Farms, a new venture combining two recently privatized farms, will focus initially Loan 1.6 1.6on maize growing, to be followed by other crops and cattle. Project cost: $4.6 million.

Ghana Leasing Company, Ghana's f irst independent leasing company, will focus on Equity 0.6 0.6medium-term equipment f inancing, primarily for small and medium-scale businesses.Project cost: $15.0 million.

Hotel Investments (Ghana) Limited* has asked IFC to arrange a swap of its obligations Swap 1 .3t 1.3on a f ixed-rate Sterling loan into U.S. dollar obligations. Project cost: $1.3 million.

Polytex Industries Limited, which makes plastic packaging materials, will expand and Loan 0.4 0.4modernize its production to increase output. Project cost: $1.2 million. (AEF)

31

PRO J EC TS AP PRO V ED IN F IS CAL 1 9 9 2

( MI L LI ON S OF U. S. DO L LA RS)

PR OJE CT DES CR I P TI ON FTNK4 NCTNGTYPF TO TA-

Ghana Vims Farm Limited will expand and modernize its poultry operation to increase egg output Loan 0.3 0.3contŽnued from 4 million to 10 million per year. Project cost: $0.7 million. (AEF)

By expanding its steel rolling mill operaton. Wahome Steel* will be able to produce a wide Loan 2.0 2.0range of steel products and make its own steel from local scrap instead of importing it.Project cost: $6.6 million.

Guinea Daboya Pineapple Plantation will be privatized and rehabilitated to produce pineapples Loan 2.1for export. Production is expected to reach 16,500 tons in 1995. Project cost: $9.3 million. Quasi-equity 0.6 2.7

Kenya African Finance Consultants Limited will provide financial services to corporate, Equity 0.2 0.2institutional, and individual clients. A longer-term objective will be to provide localunderwriting and distrbution services for securities. Project Cost: $1.1 million.

Future Hotels Limited will establish a luxury tented camp in the Tsavo National Game Loan 0.5 0.5Park. The project will meet stnct environmental guidelines. Project cost: $3.5 million. (AEF)

Integrated Wood Complex Limited, an established logger of poles for telephone and power Loan 0.4 0.4lines, will expand its operations to include wood treatment. Project cost: $1.2 million. (AEF)

Panafrican Paper Mills (East Africa) Limited', the only integrated pulp and paper mill Loan 30.0in Kenya, will start producing bagasse pulp, chemical pulp. and paperboard. It will also Syndicabtons 8.0 38.0increase production of other paper grades. Project cost: $161 .9 million.

Madagascar Aquaculture de la Mahajamba will establish a shrimp farm in two phases. When Loan 1.9completed, it will produce 2,500 tons per year of high-quality shrmp, entirely for export. Equity 0.6 2.5Project cost: $19.0 million.

Mali Societe Miniere de SYAMA will develop and expand the SYAMA gold mine. Gold Equity 1.5production is expected to increase from its current level of 120,000 ounces per year to Quasi-equity 21.7 23.2about 170,000 ounces per year. Project cost: $122.6 million.

Mauritius Dinarobin Inns and Motels Company Limited is rehabilitating the 147-room Meridien Loan 6.0 6.0Paradis Hotel at Le Morne in the southwest of the island, and investing in a new 1 85-roomhotel, the Shandrani, near the international airport. Project cost: $30.0 million.

IFC will provide an agency credit line to be administered by Mauritius Commercial Bank Loan 10.0 10.0to finance small and medium-sized projects. Project cost: Si 0.0 million.

Mozambique Hoteis Polana Ltda. is refurbishing the formerly nationalized Polana Hotel in Maputo Loan 3.5 3.5to five-star international standards. Project cost: $16.5 million.

Nigeria Canplas Limited will set up an integrated foundry and machine shop. The company's Loan 0.4output will be import substituting, and will be marketed to meet local requirements for Equity 0.2 0.6spare parts and components for the transportation, cement, textile, and oil industries.Project cost: $1.6 million. (AEF)

Fenok Industries Limited will make brake linings and pads for passenger and light Loan 0.5commercial vehicles. Project cost: $2.4 million. (AEF) Equity 0.3 0.8

General Cotton Mill Limited, one of the largest integrated textile companies in Nigeria, Loan 8.5 8.5will refurbish and upgrade its spinning, weaving, and f inishing facilities. Project cost:$17.0 million.

Glossands Limited, which loads and sells sand to local construction contractors, Loan 0.7 0.7will buy a dredger to recover sand from the Lagos Lagoon. Project cost: $1.8 million. (AEF)

IFC will participate in the equity of Nigerian Securities Discount House, the first Equity 0.6 0.6discount house in Nigeria. Project cost: $10.0 million.

Orman Industries Ltd. will set up a plant to process soybeans into vegetable oil for human Loan 0.1 0.1consumption, as well as protein additives for animal feed. Project cost: $0.6 million. (AEF)

Studio Press (Nigeria) PLC, which makes stationery products and prints light packaging, Loan 1.0will expand and diversify into printing school textbooks. Project cost: $3.5 million. (AEF) Equity 0.3 1.3

32 SUB-SAHARAN AFRICA

PRO J EC TS AP PRO V ED IN F IS CAL 1 9 9 2

( MI L LI ON S OF U. S. DO L LA RS)

PR OJE CT DES CR IP TI ON FINANCINGTYPE TOTAL

Rwanda T.M. Ndamage Transport will expand its intemational road haulage fleet by buying five Loan 0.5 0.5new trailer trucks. Project cost: $1.0 million. (AEF)

T.T Manufacturing Limited will build a plant for making bicycle tires in Kigali to serve Guarantee 0.6 0.6Rwanda, Burundi, and eastern Zaire. Project cost: $2.2 million. (AEF)

Seychelles PTD Limited will rehabilitate and refurbish the Paradise Hotel on Praslin Island. The Loan 3.8company will demolish 42 rooms, build 80 new rooms, and upgrade existing facilities. Syndications 2.5 6.3Project cost: $9.6 million.

Sierra Leone Sierra Rutile Ltd. will rehabilitate a plant and infrastructure, and develop a titanium Loan 20.0 20.0mineral sands mine. Project cost: $71.0 million.

Swaziland Mbabane Concrete Centre will set up a granite quarry on a 1 ,032-hectare farm. Loan 0.4It will produce all grades of road stone and concrete stone aggregates and use the Equity 0.1crusher dust, a by-product, to make concrete products such as building blocks and Quasi-equity 0.2 0.7reinforced pipes. Project cost: $1.8 million. (AEF)

Togo Socidet Togolaise de Produits Marins will expand and modemize the procurement, Loan 0.2processing, and marketing of seafoods. The aim is to export 745 tons per year of Quasi-equity 0.1 0.3high-value fish products, and to process 600 tons per year of low-value fish for thelocal market. Project cost: $1.9 million. (AEF)

Uganda Clovergem Fish and Food Limited will establish a facility on Lake Victoria to process Loan 0.9 0.9andfreezefishforexportto Europe. Projectcost:$5.1 million. (AEF)

Development Finance Company of Uganda Limited* will expand its foreign currency Equity 0.6 0.6term lending and equity investment operations through a rghts issue, and diversify intoactivities such as domestic currency lending and leasing. Project cost: $2.4 million.

Zimbabwe COPRO (Pvt) Limited will set up an ostrich abattoir to process 40,000 birds per year. Loan 0.9Feathers and skin will be exported; meat and by-products will be sold locally. Project cost: Quasi-equity 0.3 1.2$4.0 million. (AEF)

An agency credit line administered by First Merchant Bank of Zimbabwe (FMB)* will Loan 15.0 15.0make medium-term loans available to small and medium-sized projects. Project cost:$1 5.0 million.

IFC will subscribe to new shares in FMB Holdings Limited', a finandal services holding Equity 0.5 0.5company in which IFC has a 10 percent shareholding. Project cost: $5.3 million.

Meikles Consolidated Holdings Private Limited will completely rebuild and expand Loan 8.3 8.3one wing of the Meikies Hotel, a five-star hotel in Harare. Another 187 rooms will berefurbished and public areas will be redesigned. Project cost: $45.7 million.

Petrozim Line (Pvt) Ltd. will build and operate a 204-Kilometer underground multiproduct Loan 16.7petrpleum pipeline from Feruka to Harare. Project cost: $66.7 million. Syndications 16.0 32.7

(AEF) Afnca Enterprise Fundproject* IFC has made one or more prevous investments in, or loans to, this companyt This figure represents IFCs initial exposure in a currency swap.

33

T E CH N I CAL ASS IS TAN CE AND AD VI SO RY PRO J EC TS

F O C UiS D F S C R T P T I O N

Africa Capital market IFC participated in a comparative study by the IBRD of financial systems in Africa.development

West Africa Capital market Central banks in West and Central Africa received advice from IFC on the restructuring of commercialdevelopment banks.

Projecttechnical Through its Technical Assistance Trust Funds, IFC supported a study on the feasibility of, and linkingassistance of possible partners for, a capital equipment leasing project in C6te d'lvoire and Togo.

Angola Foreign direct investment FIAS carried out a diagnostic study of the environment for foreign direct investment.

Benin Foreign direct investment FIAS carried out a diagnostic study of the environment for foreign direct investment.

Burkina Faso Foreign direct investment FIAS carried out a diagnostic study of the environment for foreign direct investment.

Technical advice IFC carried out a feasibility study for a zinc-mining project.

Equatorial Guinea Foreign direct investment FIAS conducted a workshop at which rt assisted the team revising Equatorial Guinea's investment code. .

Ghana Capital market As part of an IBRD financial sector project, IFC reviewed the money market operationE of thedevelopment Central Bank, as well as the operations of Ghana's discount houses and insurance cornpanies,

and assisted in the re-establishment of the stock exchange.

Capital market IFC advised the Central Bank on the establishment of credit rating agences.development

Kenya Foreign direct investment FIAS carried out a diagnostic study of backward linkages, identif ied impediments, and offeredrecommendations on how to address them.

Project appraisal IFC appraised the expansion project of an integrated pulp and paper mill.

Madagascar Foreign direct investment FIAS helped the Government to develop a strategic plan for the promotion of foreign investment,identifying industries to be promoted, countries where promotional efforts should be made, andpromotional techniques.

Malawi Foreign direct investment FIAS assisted the Government in drafting the investment promotion act.

Foreign direct investment FIAS is overseeing a technical assistance project to help launch Malawi's Investment Promotion Agency.

Mali Foreign direct investment FIAS identif ied factors hindering private foreign and domestic investment and offered recommendationson revisions to the investment code.

Mauritius Capital market As part of an IBRD review of the f inancial sector, IFC assisted in the preparation of securities listingdevelopment regulations and advised the Government on measures to encourage securities market development.

Mozambique Foreign direct investment FIAS carried out a diagnostic study of the environment for foreign direct investment

Namibia Foreign direct investment FIAS is conducting a diagnostic review of the investment environment with a view to preparing aninvestment policy statement.

Foreign direct investment FIAS prepared a draft Investment Promotion Act and conducted a seminar to review the Act with theGovernment.

Projecttechnical IFC, through its Technical Assistance Trust Funds, secured support for a feasibility study and pilotassistance operation for a fish-farming operation.

Nigeria Project appraisal IFC carried out an appraisal of a liquid natural gas project.

Tanzania Foreign direct investment FIAS is reviewing the structure of the country's foreign exchange regime and swaps program to identifypossible improvements.

Togo Project technical IFC expects to provide technical assistance in the modemization and privatization of a cement operation.assistance The cost of external consultants will be covered by IFC's Technical Assistance Trust Funds.

Uganda Project technical IFC committed funds for a study, through its Technical Assistance Trust Funds, of selected textileassistance operations to identfy projects and assist in linking prospecbve partners.

34 SUB-SAHARAN AFRICA

REG IO NA L R E P O R T S A S I A

IFCissup,poriing therestructuring aadi

expansion programXuflBark of Asia,

one of 7ha-d3Fi%ndsam fler commercial NU

baniks, withi aninvestment of fe

$6 million. The bank t mis adtninistering a t$20 nahion credit

Tinec extended by-IFC in fiscal 1991.

INVpESTiENT CLIMATE The recession in the United States and the economic

The dramatic events of 199 1-the Gulf crisis and the slowdown in Japan had an insignificant effect on the

changes in the former Soviet Union-seem to ha-ve economies of the East Asian countries, which saw

had little impact on the thriving market economies their real output advance by a respectable 7 percent in

of East Asia. However, these events were, in part, 1991. This was only slightly below the average annual

responsible for the introductioni of significant policy growth rate-S percent-for the region from 1980 to

changes in South Asia, and havc had strong reverber- 1990, and far higher than growth rates anywhere else

ations in a number of East Asian countries with in the world. Investment expenditures remained at

command economies. In general, the shift toward high levels, over $300 billion; 35 percent of total

market-oriented economies is accelerating through- approved investment in all developing countries went

out Asia. to East Asia in 1991. Exports grew by nearly 10 per-

cent, boosted by an increase in intra-regional trade.

Whlile the average GDP growth rate for Asia was

high. there were substantial differences among coun- As intra- regional trade increased in East Asia, so did

tries. At one end of the spectrum, there was a slight intra-regional investment. Hong Kong, Japan, the

decrease in industrial output in India anid in overall Republic of Korea, and Singapore contiinued to make

economic activity in the Philippines, two countries investments within the region, mostly in labor-

that compressed imports in 1991. At the other end, intensive production in Southeast Asia and China's

output grew over 12 percent in China's eastern prov- major coastal areas. In 1991 foreign investment is

inces, where increased private sector involvement estimated to have reached $3.2 billion in Malaysia,

continued to drive the rest of the economy. Although $1.8 billion in Thailand, $1.7 billion in Indonesia,

authorities in countries as diverse as Indonesia, and $620 million in the Philippines. China is

NMalaysia, Pakistan, and Thailand tightened monetary reported to have attracted $2.4 billion. Intra-regiornal

policies in efforts to reduce inflationary pressures, investment accounted for 60 percent of total

these countries grew between 5 percent and 8 percent. foreign investment.

35

The heavy investment outlays in directly produc- compared with an annual growth rate of 5 percent in

tive activities have put a strain on infrastructure; the previous three years. Growth in most of the

without new investments in infrastructure, future South Asian countries has already rebounded to

economic growth in East Asia's newly industrial- 5 percent, or will shortlv do so, but because of India's

ized countries could be constrained. A growinig adjustment policies, which include a good dose of

number of countries with public financing deficits restricted demand management, the region's average

have been actively looking for, and experimenting growth rate for 1992 will be modest, although in the

with, private sector participation in such areas as coming years it is expected to return to the levels

power generation and telecommunications. There achieved in the late 1980s.

have been build-operate-and-transfer (BOT)

schemes in China and the Philippines. Similar ar- The basis for strong future growth has been

rangements are under consideration in Indonesia, established in South Asia. There has been a surge

Malaysia, and Thailand. of private investment in India, in response to

the Government's adjustment policies. Similarly,

All of the East Asian economies are refining the authorities in Pakistan have succceded in

their investment codes, some of them, like China, encouraging private sector activity through a series

mainly to transfer techlnlogy and facilitate ioint of measures ranging from the rapid privatization

ventures, others, like Malaysia, to rationalize tax of public enterprises to the removal of distortions

incentives. The Philippine legislature has approved in the financial system. WVhile Bangladesh is still

a new foreign investment law. Even in Indochina burdened with an oversized and inefficient public

and Mongolia, governments are now taking a sector, private industry is growing strongly in

pragmatic approach to private sector develop- such labor-intensive sub-sectors as garments

ment in general, and foreign direct investment and simple food-processing. The Sri Lankan

in particular. WA7hile the legal and administrative authorities are also engaged in significant public

frameworks in these countries are still rudimen- sector reform, including privatization. Despite the

tary, some foreign investment has started to continuation of civil strife, the growth of output is

flow in. expected to exceed 5 percent in 1992 and beyond.

There have been similar trends in South Asia. IFC'S OPERATIONS IN TIlE REGIDSN

India is wooing foreign investors by liberalizing IFC gained a new member in Asia in fiscal 1992-

entrv, and Pakistan is continuing to pursue forceful the Lao People's Democratic Republic (Lao P.D.R.).

private sector policies, reserving only a few areas

for public sector investment. Similarly, Sri Lanka To respond more effectively to the neecds of some

and Bangladesh are simplifying foreign investment of its members in the region, IFC is strengthening

rules. While foreign investment flows to South its regional mission in India, which covers South

Asia have been modest in comparison with flows to Asia. The number of staff in New Delhi has been

East Asia, the recent policy changes in South Asia increased, and an additional mission has been

have resulted in a friendlier climate and more opened in Bombay.

flexible legislation and led to increased commit-

ments by a number of leading multinational In an effort to improve the WVorld Bank Group's

corporations. In India, for example, foreign direct understanding of the business environment in Asia,

investment flows increased from $100 million in IFC and the IBRD are jointly carrying out private

fiscal 1991 to $200 million in fiscal 1992 and are sector assessments for several member countries

expectcd to rise further in fiscal 1993. in the region. T'hey are examining the institutional

framework for private enterprise and cooperation

All of the South Asian economies were negatively and competition between the private ard public

affected by the Gulf crisis, initially by the short- sectors. Assessments of Indonesia, the Philippines,

term rise in oil prices, and then by the loss of and Sri Lanka are well under way, and the WMorld

remittances from guest workers. Economic growth Bank Group expects to complete a study of India

in the region slowed, averaging 3.6 percent in 1991, by mid-1993.

36 ASIA

Traditionally, many companies in Asia have

financed a large part of their investment through LOAN AND INVESTMENT APPROVALS,FY88-FY92

debt. However, tight monetary policy and a paucity millons of US. dollars)

of external credit have led Asian investors to seek 1,250

more equity and quasi-equity financing, from both

domestic and foreign sources. This scenario creates

a need for IFC involvement in certain areas, in 1,000

particular: (I ) development of capital markets to

increase the mobilization of domestic funds and 750

improve the flow of medium- and long-term funds

to private businesses; (2) assistance for individual

companies in accessing the international capital 500

markets through securities issues; (3) support of

privatization initiatives, which have gathered 250

momentum in the region; and (4) advisory assign-

ments and direct project financing in countries like

the Philippines that offer many sound investment 1988 1989 1990 1991 1992opportunities but are unable to obtain commercial

bank financing because of country risk. L LoanU Equity

Given the different stages of development of the U Syndications and underwriting

various Asian economies, IFC's strategy is designed

to be responsive to the diverse needs and capital

requirements of the private sector of each country. PROJECT FINANCING AND RESOURCE

Most of the countries in the region fall into one of MOBILIZATION

three categories. The first group of countries, which In fiscal 1992 IFC approved 34 projects in 9

includes most of the Southeast Asian economies, countries in Asia, compared with 39 projects in

is characterized by rapid industrialization and urban- 9 countries in fiscal 1991. At June 30, 1992, the

ization. In these countries, IFC concentrates on capital Corporation's committed portfolio included loans

market development and support of privatization and investments for 178 companies in 12 countries,

activities. The second category includes the large compared with 132 companies in 12 countries at

economies of China and India, which have tradition- June 30, 1991.

ally been inward-looking countries with protectionist

policies but which are now opening up their econo- FY92 FY91

mies and restructuring their industries. In these (millions of U.S. dollars)

countries, IFC's emphasis is on mobilizing funds for

interuaLiorially comlpetitive ventures. The third Financing approved for IFC's account 456 534

category includes most of the smaller, less developed Loans and guarantees 349 439

economies of South Asia, Indochina, and the South Equity and quasi-equity 107 95

Pacific islands. IFC is intensifying its efforts to look Direct mobilization 357 644

foir investment opportunities in this group of coun- Loan syndications 357 634

tries, most of which still lack the basic infrastructure Underwriting - 10

and institutional framework to foster large-scale Total financing approved 813 1,178

private investment.Committed portfolio for IFC's account 1,583 1,306

To address the needs of entrepreneurs in the South Loans and guarantees 1,234 1,001

Pacific islands, in fiscal 1991 the Corporation found- Equity and quasi-equity 349 305

ed the South Pacific Project Facility, which began Committed portfolio held for others

operations in fiscal 1992. The Facility is described (loan participations) 433 169

on p. 40. Total committed portfolio 2,016 1,475

37

IFC continued to diversify its investments in East the sector with the largest share of IF(.s committed

Asia. The biggest loans and equity investments portfolio in that country. In South Asia, IFC also

approved in fiscal 1992 were for projects in the approved over $60 million in financir.g for three

petroleumii-refiniing and chemicals and petrochemi- manufacturing projects in industrial sub-sectors

cals sectors. In the Philippines, IFC approved a (steel, engineering products) where th-ere has been

$35 million loan and a syndicated loan of $85 million considerable deregulation as well as leveling of

for the modernization of the Pilipinas Shell Petro- the playing field to promote competitiveness.

leum Corporation refinery. This project is expected

to have a strong positive impact on the future inflow In connection with capital market development,

of foreign funds into the Philippine economy. A IFC's activities are adapted to the level of develop-

loan syndication of $95 million was arranged by ment of the financial sector in different countries.

IFC for RT. Bakrie Kasei Corporation in Indonesia, In Southeast Asian countries that have fairly devel-

which is building a greenfield petrochemicals plant oped financial sectors, IFC provides financing for

in Merak (West Java). IFC also approved a loan the establishment of financial institutions offering

of $30 million and quasi-equity financing of $10 mil- sophisticated products such as big-ticket leasing,

lion for its own account for this project. high-quality investment banking services, and

regional venture capital funds. In Tha.land during

IFC also emphasized financing for labor-intensive, fiscal 1992, the Corporation helped re,tructure the

export-oriented industries, contributing to the operations of Bank of Asia, a privately owned com-

creation of more jobs in populous countries like mercial bank, and invested in its equity. In the pro-

China and Indonesia. In Indonesia, IFC will help cess, IFC helped Bank of Asia resolve operational

finance a $208 million program of investments by problems and redefine its strategies to r espond to the

P.T. Mitracorp Pacificnusantara, a holding company, changes in the market following financial sector re-

in affiliates in export-oriented light maniufacturing forms in Thailand. Other examples of projects ap-

industries. The investment program is expected to proved in fiscal 1992 include a factoring company in

lead to substantial employment and foreign Indonesia, two guarantee facilities in TM.alaysia, and a

exchange gains. leasing company in Thailand.

The Corporation continued to pay special attention South Asian countries have relatively less advanced

to the Philippines, which is trying to stabilize its but rapidly developing financial markcts. 'the em-

economy while stimulating economic growth. IFC phasis of IFC's program in these countries is on

provided financing for large projects with substantial institution-building, to broaden the range of finan-

amuounts of foreign investmiient and helped restruc- cial services available to the private sector. In fiscal

ture and strengthen domestic industries, such as 1992 IFC helped restructure J. S. Stock Brokerage

Universal Robina Corporation, a diversified food- House Ltd., one of the first all-Pakistan stock broker-

processing company modernizing its flour mills age firms. The Corporation took a 10 percent equity

and sugar plants. In addition to a quasi-equity stake in the company and helped arrange a foreign

investment of over $15 million and assistance with technical partner. IFC also approved investments in

financial restructuring, IFC will help the mostly two venture capital funds in India and a fund man-

family-owned company to go public. IFC is currently agement company in Sri Lanka that will manage that

investigating the possibility of financing a number country's first open-end unit trust.

of large private sector power projects in both the

Philippines and Malaysia. TECHNICAL ASSISTANCE AND ADVISORY

SERVICES

IFC's investment operations in India and Pakistan IFC offered a full array of technical assistance and

emphasizecd energy-related projects (gas develop- advisory services in Asia in fiscal 1992, includinig

ment, power) and manufacturing projects. In fiscal advice to small-scale entrepreneurs, technical

1992 IFC approved $20 million in financing for assistance in connection with capital market

the expansion of Mari Gas Company Limited, a development, and advice to governments on

producer of natural gas in Pakistan, making energy attracting foreign investment.

38 ASIA

SKP Bearingslindia, Ltd.ta

manuifa tureiolball bearing andthe firsr company

in Inidia to produce 4AXsmill bearings

receiv,ed a loan of j$12 milllionfrom _D

IFC to help finiance

a modernizationand expansion

program.

Jn countries with relatively advanced financial strategy in Sri Lanka. In addition, FIAS hassectors, IFC's assistance is focused on the develop- prepared eight projects, to be completed in fiscalment of regulatory regimes for more sophisticated 1993, in six countries-China, Indonesia, the Lao

financial institutions and activities (venture capital, P.D.R., Mongolia, the Philippines, and Viet Nani-international equity offerings by domestic compa- involving advice on a range of investment policy

nies, mergers and acquisitions). In countries where and procedural issues.

the capital markets are fairly undeveloped, the focus

of IFC's technical assistance has been the creation

of the basic legal and regulatory frameworks needed

to develop capital markets and non-hank financial

intermediaries such as leasing companies. In fiscal

1992 IFC provided advice to both India and Pakistan

on securities market regulations and assisted the

Government of Viet Nam with the development of

a leasing industry. In Sri Lanka, TFC participated

in a review of the banking sector and assisted the

Government with the dcvelopment of tax regulations

for venture capital companies.

The Foreign Investment Advisory Service (FIAS)

was active in ten countries in Asia dturing fiscal

1992. The advisory assistance provided in this

region varied widely; FIAS carried out diagnostic

studies of the climate for foreign investment in

China, Pakistan, and Western Samoa; studied

investment policies in Lao RPD.R. and Malaysia; and

reviewed the institutional framework for investment

in the Philippines. It completed studies in the

Philippines and Thailand identifying policy issues in

connection with backward linkages between foreign

and domestic comnpanies. The projects under way

included a diagnostic study in Nepal; studies on

investment policy issues in the South Pacific and

Bangladesh; and a review of investment promotion

39

SOUTH PACIFIC PROJECT FACILITY

The South Pacific Project Facility (SPPF) helps entrepreneurs in IFC's seven South Pacific island member countries

develop bankable projects involving either the establishment of new businesses or the expansion and diversification

of existing businesses. Although SPPF does not provide projectfinancing, itfinances part of the cost of market, tech-

nical, and feasibility studies and helps sponsors raise financingfrom other sources and find local and froreign partners.

SPPF also helps sponsors locate appropriate technology and provides them with technical assistance during project

implementation. Funding for SPPF's activities is provided by IFC and the Governments ofAustralia, Canada, Japan,

and New Zealand. The Government of India has agreed to provide technical experts for short-term use by SPPE

SPPF set up its office in Sydney, Australia, in August 1991. In theyear ended December 1991, SPPF carried outfive

consultancy assignments and completed two projects. SPPF reviewed 80 project proposals in itsfirstyear of operations

and is currently working on a pipeline of about 40 proposals.

COMPLETED PROJECTS

FIJi

Clayton-Howard Enterprises International, a two-year old furniture company owned by a woman, requested

SPPF's advice on an expansion program. SPPF determined that the company needed a detailed cost-control system

before it could expand and helped it set up a modern cost-accounting system based on work measurement standards.

VANUATU

Asian Paints Limitcd plans to construct a 400,000-liter paint plant at a cost of about $700,000. Eighty percent

of the production will be sold in the domestic market, and the balance will be exported. SPPF helped raise equity

financing from off-shore sources and loan funding from localfinancial institutions for the project.

40 ASIA

PRO J EC TS A PPRO V ED I N F 1 SC AL 1 9 9 2( MI L LI ON S OF U. S. DO L LA RS)

PR OJE CT DES CR IP TI ON FINANCINGTYPE TOTAL

China China Bicycles Company Limited* will build a new plant to increase the company's total Loan 12.5capacity from 1.2 million bicycles to about 2.5 million units per year. Project cost: $60.0 million. Equity 2.5 15.0

IFC exercised its pre-emptive rights to subscribe to the capital increase of Guangzhou Equity 1.4 1.4Peugeot Automobile Company Ltd*, which is expanding production capacity.Project cost: $200.0 million.

India Arvind Mills Limited is planning an expansion and modernization of its textile units to Loan 9.0rationalize production, improve product quality, and reduce costs. Project cost: $57.9 million. Equity 9.0 18.0

The Bombay Dyeing and Manufacturing Company Umited will establish facilities for Loan 12.7 12.7making 10 million meters per year of sheetings and drills. Project cost: $27.5 million.

CESC Limited', the oldest private power utility in India, will build a 2x250-megawatt Loan 30.0coal-fired generating station near Calcutta. Project cost: $547.7 million. Syndication 30.0 60.0

IFC will participate in the expansion of Creditcapital Venture Fund Limited, a leading Equity 1.3 1.3private venture capital company, and invest in Information Technology Fund, the country'sf irst industry-specific venture capital fund. Project cost: $4.4 million.

Indus Venture Management Limited will be established to manage the Indus Venture Equity 1.2 1.2Capital Fund, one of the first privately managed Indian funds. Project cost: $10.5 million.

Kotak Mahindra Finance Limited will enlarge its long-term funding base through a public Quasi-equity 0.8 0.8issue of partly convertible debentures. This is part of a phased growth plan that will result in40 percent of the company being opened to the general public. Project cost: $6.0 million.

NICCO-UCO Financial Services Limited, a leasing company, will begin to operate as a Loan 3.0merchant bank. It will introduce a variety of financial products and services, and expand its Equity 0.3 3.3leasing operations. Project cost: $12.1 million.

Nippon Denro Ispat Limited will use proven technology and locally available gas and iron ore Loan 40.0in a sponge iron project that wil produce 1 million tons per year. Project cost: $232.0 million. Equity 6.7 46.7

SKF Bearings India, Ltd., is modernizing its plants to increase output and improve Loan 11.5 11.5quality. Project cost: $81.0 million.

Tata Keltron Ltd.* is diversifying into feature phones, cordless phones, and answering Equity 0.2+ 0.2machines. Project cost: $1.8 million.

The Great Eastern Shipping Co. Ltd.' will add 5 secondhand vessels to its existing fleet Loan 22.0of 44 ships. Project cost: $85.0 million. Syndications 38.0 60.0

IFC will participate in a rights issue by The Tata Iron and Steel Company Limited'. Equity 3.6 3.6Project cost: $3.6 million.

Indonesia P.T. Astra Microtronics Technology will assemble and test integrated circuits on a Loan 11.0sub-contract basis on Batam Island. Project cost: $51.5 million. Syndications 1 8.0

Equity 1.6 30.6

RT. Bakrie Kasei Corporation will produce 250,000 metric tons per year of purified Loan 30.0terephthalic acid at Merak, West Java, principally for Indonesian polyester producers. Syndications 95.0Projectcost: $335.1 million. Quasi-equity 9.6 134.6

PT. B.B. Heller Factoring Company will be one of the first specialized factonng Equity 0.6 0.6companies in Indonesia, offering domestic factoring, mostly with recourse, and intemationalfactoring on a non-recourse basis. Project cost: $4.0 million.

P.T. Lantai Keramik Mas will build a new plant that will double the company's capacity to Loan 5.4produce ceramic roof tiles. Project cost: $23.7 million. Equity 1.7

Syndications 10.0 17.1

IFC made an equity investment in P.T. Mitracorp Pacificnusantara, an investment holding Equity 16.0 16.0company. The equity program is to finance the company's investments in low-technology,export-oriented light manufacturing industries. Project cost: $208.0 million.

41

PRO J EC TS AP PRO V ED IN F IS CAL 1 9 9 2

( MI L L I O N S O F U . S . D O L L A R S

P R OJ E C T D E S C R I P T I O N FINAN,rCINGTYPE TOTAL

Indonesia RT. South Pacif ic Viscose will increase its viscose rayon staple fiber production capacity Loan 20.0conhinued from 37,000 tons per year to 65,000 tons per year. Project cost: $92.0 million. Syndications 30.0 50.0

PT. Swadharma Keny Satya will build a five-star 700-room hotel, the Shangr-La Jakarta, Loan 35.0in Jakarta's central district in response to the growth of international business and tounst Syndications 51.0 86.0travel to Indonesia. Project cost: $177.0 million.

Korea IFC exercised its pre-emptive rights in a common share issue by Gold Star Company Equity 3.1 3.1Limited*. Project cost: $118.1 million.

Malaysia Development and Commercial Bank Berhad will receive a guarantee line of up to Guarantee 10.0 10.0$10 million equivalent, mainly to increase its term lending to medium-sized companiesthrough nsk-sharing arrangements. Project oost: $20.0 ml lion.

Oversea-Chinese Banking Corporation Limited, a Singapore-based commercial bank Guarantee 10.0 10.0with substantial operations in Malaysia, will receive a guarantee line of $10 million. Theaim is to increase the bank's term lending to medium-sized companies in Malaysia throughrisk-shanng arrangements. Project cost: $20.0 million.

Pakistan First International Investment Bank Limited* will increase its share capital through Equity 0.9 0.9a 1:2 rights issue. This will enable the company to increase its exposure limits whilemaintaining prudent capital adequacy. Project cost: $6.0 million.

J.S. Stock Brokerage House Ltd., the first al-Pakistan corporate stock brokerage firm, Equity 0.9 0.9is designed as a retail securties insttution. Project cost: $5.9 million.

Mari Gas Company Limited* is increasing production of natural gas from 300 million Loan 19.5 19.5to 402 million standard cubic feet per day. Project cost: $47.9 million.

IFC partcipated in the equity of Rupaf il Limited, which is doubling its denier polyester filament Loan 14.2yarn capacity and installing a unit to produce polyester chips. Project cost: $71.5 million. Equity 0.4 14.6

Philippines Bacnotan Cement Corporation will establish a new dry-process cement line with clinker Loan 18.0capacity of 704,000 tons per year. t will operate alongside the company's three existing Equity 5.8 23.8wet-process lines. Project cost: $101.0 million.

IFC exercised its stock option in a share issue by Davao Union Cement Corporation*. Equity 0.9 ' 0.9Project oost: $0.9 million.

Pilipinas Shell Petroleum Corporation will construct new oil ref ining facilities to replace Loan 35.0its refinery at Tabangao, Batangas, and expand capacity from 67,000 to 110,000 barrels Syndications 85.0per day. Project cost: $667.0 million. Quasi-equity 15.0 135.0

IFC increased its shareholding in Pure Foods Corporation* by exercising its rights. Equity 2.6 2.6Project cost: $73.6 million.

IFC took an equity stake in Universal Robina Corporation, which plans to go public Quasi-equity 15.2 15.2and use the share issue proceeds to upgrade and expand production facilities at its foodproducton subsidiaries. Project cost: $60.0 million.

Sri Lanka IFC will participate in the equity of CKN Fund Management Co., which will establish Equity 0.3 0.3and manage Pyramid Unit Trust, one of Sri Lanka's first domestic equity funds. IFC willalso invest in the fund. Project cost: $9.6 million.

Thailand IFC is taking equity in Bank of Asia*, a private commercial bank, to support the company's Equity 5.9 5.9restructuring and assist in redirecting its activities. Project cost: $15.0 million.

Krung Thai IBJ Leasing Company Ltd. will be established as a joint-venture leasing Equity 0.4 0.4company in Thailand to provide medium-term lease and hire-purchase equipment financingto Thai enterprises. Project cost: $4.0 million.

' /FC has made one or more previous investments in, orioans to, this companyAs a ights issue below$250,000, this projectis not included in the total numberof projects approved in FY92This project is not included in the total numberof projects approved in FY92

42 ASIA

T EC H N ICA L ASS IS TAN C E AND AD VI SO RY PROJ EC TS

F O C U S DESCRIPTION

South Pacific Foreign direct investment FIAS is studying approaches for advisory assistance to small economies in the region.

Project technical With the support of its Technical Assistance Trust Funds, IFC worked on the identification of projectsassistance involving coconut products and the linking of partners for these projects.

Bangladesh Foreign direct investment FIAS conducted a study of the incentives framework and deregulation requirements.

China Foreign direct investment FIAS surveyed foreign investors and local agencies to help identify obstades to foreign direct investment.

India Capital market IFC assisted in the drafting of legislation covering insider trading, new financial instruments, and mutualdevelopment funds, and reviewed the operations of India's stock exchanges.

Project technical IFC committed funds, through its Technical Assistance Trust Funds, for a feasibility study for a largeassistance petrochemical complex.

Lao RD.R. Foreign direct investment FIAS helped evaluate the role of export processing zones in attracting foreign direct investment.

Malaysia Foreign direct investment FIAS caooed out a comparative assessment of Malaysia's incentive system and recommended policiesthat would be easier to administer and more easily understood by investors.

Foreign direct investment FIAS assisted the Government in designing a system for monitoring foreign direct investment.

Technical/financial advioe IFC advised YTL Corporation Berhad on financing and constructing build-own-operate power plants.

Nepal Foreign direct investment FIAS is conducting a diagnostic study of the investment environment.

Project technical Through its Technical Assistance Trust Funds, IFC supported a feasibility study for anassistance integrated sericulture operation.

Pakistan Capital market The Ministry of Finance received assistance from IFC in preparing rules for the monitoring and regulationdevelopment of discount/acceptance houses.

Capital market IFC advised the Government on various aspects ot capital market development, such as securifiesdevelopment regulations, venture capital, housing finanoe, and leasing.

Foreign direct investment FIAS carried out a diagnostic study of the environment for foreign direct investment.

Philippines Corporate finance To prepare PASAR, a copper smelter/refinery for prvatzation, IFC designed a f inancial restructuring plan.

Foreign direct investment FIAS provided advice on the development of a backward linkages program.

Foreign direct investment FIAS reviewed the institutional implicatons of the changes in the policy and regulatory framework forforeign direct investment.

Project technical With the support of its Technical Assistance Trust Funds, IFC provided technical assistance on theassistance retrofitting and refurbishing of an oil tanker.

Sri Lanka Capital market IFC partidpated in an IBRD review of the country's insurance regulations, pension funds, and treasury billdevelopment auction system.

Capital market IFC assisted the Government in the development of tax regulations for venture capital companies.development

Foreign direct investment FIAS has started work on the preparation of a new investment promotion strategy.

Thailand Foreign direct investment FIAS helped the Government to identify impediments to backward linkages between foreign investors anddomestic suppliers, so as to enhance the benef its of foreign direct investment to the domestc economy.

Project technical Through its Technical Assistance Trust Funds, IFC supported a feasibility study for technology transfer inassistance the establishment of a laboratory with international standards for the testing of food exports.

Viet Nam Capital market IFC assistedthe Govemment in the development of a leasing industry, including the regulatory framework.development

Project technical IFC provided technical assistance, through its Technical Assistance Trust Funds, in the preparation of aassistance feasibility study for a capital goods leasing project.

Western Samoa Foreign direct investment FIAS studied Government policies, and recommended ways to attract more foreign direct investment

43

REG IO NA L REPO R TS EU R O P E

ZivnostenskoBanka, the first

commiercial banikprivatized in

Czechoslovakia. 4

lTE providedadvice oni thi L

privatization and 1-'madeaneut /

investmen in the A -

INVESTMENT CLINIATE Bulgaria and Romania are also moving toward aThe economies of Central and Eastern Europe are market economy, but are behind other countries in

in various stages of making a transition from closed the region in creating the legislative and administra-

command economies, in which most productive tive frameworks needed to accelerate the privatiza-

enterprises are owned by the state, to open market tion process and to encourage significanit inflows of

economies where most productivc enterprises will foreign direct investment.

be in the private sector.

All countries in Eastern and Central Europe still face

Czechoslovakia, Hungary, and Poland have already daunting challenges in developing strong, competi-

privatized many small-scale enterprises, particu- tive banking sectors. Nevertheless, thern are proinis-

larly those in the service sector; they have also ing signs; the reduction of constraints has already

privatized a significant number of larger state rcsulted in private sector growth.

enterprises. Most important, they have created theinstitutional and legal frameworks for a market New legislative and institutional frameworks cannot

economy, including legislation supporting private be put in place in Yugoslavia until hostilities have

owner-ship, the use of nsortgages as loan collateral, ceased and the governmenlts of the emerginig states

and bankruptcy liquidations. The privatization of have been reconstructed. The new Government of

large state enterprises, however, is taking longer Albania, faced with the breakdown of economicthan anticipated. Because the governments of structures, has yet to develop a clear program for

these countries want the privatization process to be economic reform. Political uncertainties in both

both efficient and fair, the practical problems of Albania and Yugoslavia have deterred new private

privatizing hundreds of firms have proved to be investment.

more complex and time-consuming than originally

envisaged. Also, most large state enterprises are All countries in Central and Eastern Europe have

substantially overstaffed, and many are of doubtful been seriously affected by the breakdown in theviability; the necessity of downsizinig these enter- trade patterns of the Council for Mutua:l Economic

prises has met with political opposition, delaying Assistance. Those most dependent on trade with

privatization. the former Soviet Union arc having the most

44 EUROPE

difficulty adjusting to the inability of the former IFC's efforts in Central and Eastern Europe in fiscal

Soviet republics to pay for goods ordered before 1992 were focused on finaincinig newly privatized

the breakdown. The process of restructuring is far enterprises, including joint ventures with foreign

from complete, even in Czechoslovakia, Hungary, partners, and advising governments and state enter-

and Poland, which have managed to shift a large prises on privatization, restructuring, and modern-

portion of their trade to the AWVest; nmany large ization. JFC is also providing assistance with capital

state enterprises may have to downsize or even market development. Initially, it is concentrating on

shut down for lack of new orders. The shift in trade developing the banking sector by helping to privatize

patterns profoundly affected aggregate demand existing state-owned commercial banks or by pro-

during 1991; as a result, in all countries in the moting new joint-veniture commercial banks witlh

region, per capita income fell by 7-12 pcrcent and foreign partners. In countries such as Czechoslovakia

unemployment has reached or surpassed levels in and Hungary, where the financial sector is relatively

WMestern Europe. In addition, markets have disap- more developed, IFC is providing financing and

peared for many relatively high-technology indus- advisory services to help create specialized financial

tries that produced military goods for domestic or institutions, such as leasing, factoring, and venture

other Warsaw Pact markets, or capital goods for capital companies.

nuclear power generation plants. The dislocationis

caused by changing patterns of demand are still The Polish Business Advisory Service (PBAS),

being addressed, as these industries begin the which was initiated by IFC and the European Bank

process of converting their operations to produce for Reconstruction and Development in fiscal tl99.

consumer goods. began operations in fiscal 1992. Based in Warsaw,

PBAS provides technical assistance to small-scale

The Turkish economy has recovered from the impact entrepreneurs in Poland. Its activities are described

of the Gulf crisis. AlthoLigh the budget deficit and on p. 48.

inflation are still high, and government borrowing

to finance the deficit has kept real interest rates at Elsewhere in Europe, IFC is awaiting resolution of

levels that make credit expensive for private the political situation in Yugoslavia to resume invest-

companies, a balance has been restored in exchange ment activity there. IFC continued to be very active

rates. This has provided an incentive for private in Turkey in fiscal 1992. An important part of IFC's

companies to improve export performance, even program in Turkey is to introduce the country's lead-

though the recession in the United States and Europe ing private sector industrial groups and financial in-

has dampened demand. The policies of Turkey's stitutions to the international financial markets by

new Government indicate that economic liberaliza- arranging large loan syndications with an increasing-

tion will continue and that the privatization of state ly diverse group of international banks. This activity

enterprises will receive priority, but progress with is expected to pave the way for Turkish companies to

the latter has been slow. issue corporate paper directly in the international

markets.

IFC'S OPERATIONS IN THE REGIONBulgaria and Albania joined IFC early in fiscal PROJECT FINANCING AND RESOURCE

1992; by the close of the fiscal year, the former MOBILIZATION

Soviet republics of Armenia, Belarus, Estonia, In fiscal 1992 IFC approved 23 projects in 5 countries

Georgia, Latvia, Lithuania, Moldova, Russian in Europe, compared with 15 projects in 5 countries

Federation, and Ukraine had applied for in fiscal 1991. At June 30, 1992, the Corporation's

membership. committed portfolio included loans and investmnents

for 93 companies in 7 countries, compared with 71

During the year the Corporation worked with the companies in 6 countries at June 30, 1991.

IBRD on an assessment of the principal constraints

to private sector development in Poland, as well as In fiscal 1992 IFC approved its first projects in

of the elements of a strategy for promoting private Czechoslovakia and Romania, both of which joined

sector activity. the Corporalion in fiscal 1991.

45

FY92 FY91 floati ng rate note issue by Interbank, one of the first(millions of U.S. dollars) issues of this kind by a private Turkish bank. IFC also

arranged financing for two medium-sized TurkishFinancing approved for IFC's account 253 189 at

commercial banks, Finansbank and K orfez Bank,Loans and guarantees 198 157

through an innovative joint syndication. In addition,

Dircty mobiliatind 212s- 032 IFC promoted a factoring company and arrangeda currency and interest rate swap for a Turkish

Loan syndications 207 103

Underwriting 5 - development bank.

Total financing approved 465 292 TECHNICAL ASSISTANCE AND ADVISORY

SERVICESCommitted portfolio for IFC's account 1 ,011 839 IFC offered a full array of technical assistance and

L oans and guarantees 908 768Equity and quasi-uitys 103 718 advisory services in Europe in fiscal 1992, including

advice to small-scale enterprises, technical assistanceCommitted portfolio held for others with capital market development, and advice on

(loan participations) 343 278lotal particittedpartfoio) ,3543 1178 privatization, corporate restructuring, and foreign

Total comiliitted portfolio 1 ,354 I1,117 drc netetdirect investment.

The Corporation helped the Government of

Projects approved in Czechoslovakia include a Czechoslovakia draft securities legislation and

joint venture between a U.S. company and a domes- made recommendations on the development of

tic carbon black manufacturer; the privatization, a program to privatize state enterprises through

expansion, and modernization of a large cement vouchers and mutual funds, as well as on the devel-

producer, a joint venture with a Belgian company; opment of the country's stock exchange. In Hungary

and a joint venture between a German bank and IFC participated in a financial sector study by

Zivnostenska Banka, Czechoslovakia's first commer- the IBRD focusing on venture capital and the

cial bank to be privatized. In addition to making an country's pension system. In Romania IFC provided

equity investment in Zivnostenska Banka, which has

been restructured as a merchanit bank, IF(C provided

advice on privatization strategy and helped identifythe foreign technical partner. LOAN AND INVESTMENT APPROVALS,

FY88-FY92(millions of U.S. dollars)

IFC approved financing for several infrastructure 500

projects in Central and Eastern Europe, including

a $6 million loan and $730,000 quasi-equitv

investment for a joint venture in Romania between 400

a Romanian company and a French company to

produce telecommunications equipment, a $15 mil- 300

lion loan for a cellular telephone project in Hungary,

and a $10 million equity participation in a regional

proiect (Czechoslovakia, Hungary, Poland) for 200

distribution of liquefiedl petroleumn gas.

In Turkey IFC approved syndicated loans for two 0 Ileading companies: the KOC Group and Mensucat

Santral. It also approved financing for Turkey's first °1988 1989 1990 1991 1992

large-scale private sector mining company.= Loan

In fiscal 1992 IFC was the co-lead manager in * Equity

the underwriting and placement of a $50 million S Syndicationsandunderwriting

46 EUROPE

Privatization Agency and Development Fund of

the Republic of Slovenia with a pilot privatization

- - - s program.

NM a tI l ILII II1 ±R.LL.LL!

.0 The Foreign Investment Advisory Service (FIAS)

__ ~~~~~organized a rouindtable on the impact of corporate tax

structures on foreign direct investment in Bulgaria,

Czechoslovakia, Hungary, Poland, and Romania.

The roundtable provided government officials from

these countries with the opportunity to discuss ways

of revising corporate tax systems to bring these into

line with Western Europe's and avoid unnecessary

competition over incentives.

FIAS also provided technical assistance to Russia and

Belarus under the aegis of the World Bank Technical

Assistance Trust Fund, helping their Governments toIFCSprovided loafi

IFC provided loany .- tframe laws and organize institutions for attractinganid quiasi-equiity-

finanicing totaling - foreign investment. FIAS has sent a mission to$35 rillion to Ukraine to identify possible advisory projects and

lWagyar Stizuki,,

agjoyna Sut i, t eur is carrying out general diagnostic studies in Estonia,producingpassenger Latvia, and lithuania. It expects to complete these

ca7rs int Hung7ary , curs in Hungary. studies by the end of calendar year 1992.

advice on the development of a stock exchange and

securities exchange commission, and the establish-

ment of a legal framework for a leasing industry.

In Turkcy IFC is providing assistance on securitics

market development.

In connection with privatization, in Eastern and

Central Europe IFC's aim is to help create model

privatization transactions and to provide advice on

the privatization of important enterprises and sec-

tors. IFC's involvement in the first privatizations

in certain countries has enabled it to identify prob-

lems that could hinder privatization programs and to

design solutions applicable to other transactions.

IFC designed and helped to implement the auction

of 2,000 small-scale enterprises owned by the city

of Nizhny Novgorod in Russia. It also advised the

Government of Bulgaria on the privatization of

Balkancar, one of the largest manufacturers of

forklift trucks in the world. IFC provided advice to

a number of Czechoslovakia's leading companies,

including one of the country's largest industrial

groups, Skoda Pilsen. In Poland IFC designed and

has begun to implement a restructuring and privati-

zation strategy for the 26 companies in the cement

and lime sectors, and in Yugoslavia it assisted the

47

POLISH BUSINESS ADVISORY SERVICE

The Polish Business Advisory Service (PBAS)-Miedzynarodowa Pomoc Polskimn Przedsiebiorstwom (3P) in

Polish-began operations in the fall of 1991. PBAS provides financial and technical advisory services to new

businesses in Poland. In addition to helping entrepreneurs and privately owned companies with the preparation of

business plans and investmentproposals, itprovides advice on technical issues and marketing, and helps raisefunds

for investment. PBAS also works with local business consultants wheneverpossible, with thegoal of ttansferring skills

and know-how. PBAS is based in Warsaw and plans to open a second office in 1'oznan early infisca,! 1993.

PBAS was co-sponsored by IFC and the European Bank for Reconstruction and Development (EBRD), with IFC

as the executing agency. PBAS's funding is provided by IFC, EBRD, Canada, Denmark, France, the Netherlands,

Sweden, the United Kingdom, and the United States. The Government of Poland hasprovided office spacefor PBAS.

Since it began operations, PBAS has been r etained by 23 companies of varying sizes andfrom different parts of

Poland. It has completed work on1 threeprojects and helped the sponsors raise $6.5 million infinancing. Demandfor

its services already exceeds its initial budgeted capacity.

EXAMPLES OF PROJECTS

GDANSK

Lonza, a privately owned manufacturer of plastic bottles seeking to expand its operations to produce aerated waters

and soft drinks, wvas able to raisefinancingfor a bottling line after PBASprepared a preliminary business plan. Lonza

has now requested PBAS's help in preparing a strategic marketingplan that willfocus on distribution.

SOMPOLNO

PBAS has prepared a business plan and securedfinancefor Transland, a privately owned trucking company that

is seeking to increase its market share of the growing truck transportation between Poland, TWestern Europe, and the

former Soviet Union. The cormpany, which already owns 27 truck-trailers, plans to acquire 25 tractor-trailers and

increase its working capital, for a total cost of $4 million.

lWARSAW

Mech-Go, a profitable manufacturer of millsfor textile and polygraphic machinesfor the domestic market as well

asfor export, sought PBAS's advice on its expansion program. After an initial diagnostic, PBAS concluded that

Alech-Go could expand production without new investment and that the company could double sales by developing

new markets and products. PBAS developed a stralegic marketingplan.

48 EUROPE

PRO J EC TS AP PRO V ED IN F IS CAL 1 9 9 2

(M I L L I O N S O F U . S . D O L L A R S)

P R OJ E C T D E S C R I P T I ON FIMANCINGTYPE TOTAL

Czechoslovakia Cementamy a Vapenky Mokra a.s., one of the largest cement producers in Czechoslovakia, Equity 17.8 17.8has been privatized and is being modernized. Its total annual producton capacity is 2.2 milliontons of cement. Project cost: $127.0 million.

C.S. Cabot spol, s.o., is a new joint venture tormed by the biggest coal-tar distiller Loan 18.3in Czechoslovakia, Deza Ltd, and a U.S. corporation to produce modern grades of Standby 2.0 20.3carbon black. Deza is privatizing its carbon black operations. Project cost: $87.1 million.

O.B. Heller A.S. will be a new factonng company in Czechoslovakia. Project cost: $1.1 million. Equity 0.2 0.2

O.B. Sogelease A.S. will be the second joint-venture leasing company in Czechoslovakia Equity 0.6 0.6and will provide medium-term equipment leases to domestic enterprises. Project cost:$2.9 million.

Zivnostenska Banka, the oldest bank in Czechoslovakia, is being pnvatized and Equity 6.5 6.5restructured as a merchant bank. IFC is taking an equity stake alongside a foreigntechnical partner. Project cost: $50.0 million.

Hungary IFC will invest in Euroventures Hungary B... a venture capital fund of $19 million .Equity 2.7 2.7equivalent. IFC's investment will amount to 13.8 percent of the fund. depending onthe final fund size. Project cost: $19.4 million.

The 370-room Grand Hotel Royal in Budapest will be renovated to bring it to four-star Loan 26.6standards. Additional office, shopping, and parking space will be built. Syndications 26.2Project cost: $147.6 million. Quasi-equity 10.4 63.2

IFC participated in a rights issue by Salgotarjan Glass Wool Limited*, which makes Quasi-equity 0.5 0.5insulation products. The company increased its share capital to strengthen its financialposition in a difficult market. Project cost: $2.0 million.

IFC will provide a loan to Unicbank*, ajoint-venture commercial bank in which IFC held Loan 10.0 10.0a stake until 1992. Project cost: $10.0 million.

Westel Radiotelefon KFT, a joint venture between HTC. the Hungarian Loan 15.0 15.0Telecommunications Company, and a U.S. company, will develop, instal, andoperate a nationwide cellular telephone system. Project cost: $82.0 million.

Poland Philips Lighting Poland, formed when Poland's largest maker of lighting products Loan 15.0 15.0was privatized, will improve its facilities and products. It will also invest in environmentalclean-up. Project cost: $60.0 million.

Romania Alcatel Network Systems Romania S.A. will make digital telephone switch equipment Loan 6.0for the domestic market. Its proposed capacity is 200,000 lines per year. Project cost: Quasi-equity 0.7 6.7$18.0 million.

Turkey IFC participated in a pre-emptive rights issue by Anadolu Cam Sanayil A.S.*, which Equity 0.2 02makes industrial equipment and machinery. Project cost: $0.2 million.

Cayeli Bakim, an underground copper/zinc mine in northeast Turkey, will produce Loan 28.0105,000 tons per year of copper concentrate and 67,000 tons per year of zinc concentrate. Syndications 45.0Project cost: $144.5 million. Standby 2.0 75.0

Heller Factoring A.S. will be the first joint-venture factoring company in Turkey. It will Equity 0.6 0.6provide both domestic and cross-border factoring. Project cost: $3.0 million.

IFC and Bankers Trust will underwrite and place privately a $50 million five-year floating Loan 5.0rate note issue for Interbank*, a leading Turkish bank. This will be the first such issue Underwriting 5.0 10.0for a private Turkish institution Project cost: $50.0 million.

I FC helped the KOC Group, Turkey's largest privately owned conglomerate, to raise Loan 15.0$70 million in the international capital markets through a syndicated loan. The company Syndications 55.0 70.0operates in the automotive, industrial, commercial. financial, and energy sectors.Project cost: $100.0 million.

49

P R OJ E C T S A P P R OV E D I N F I S C A L 1 9 9 2( M I L. IO T O N S O F U . S . D O L L A R S)

P R OJ E C T D E S C R I P T I O N FINANCINGTYPE TOTAL

Turkey IFC participated in a share rights issue by Koy-Tur Holding A.S.*, an agribusiness company Quasi-equity 0.8 0.8continued Project cost: $0.8 million.

Mensucat Santral, Turkey's largest producer of bed linens and home textiles, is Loan 17.0restructurng its balance sheet, upgrading its products, and relocating its f inishing facility. Syndications 25.0Project cost: $79.8 million. Equity 5.0 47.0

IFC will swap some of the Turkish Industrial Development Bank's yen liabilities into Swap 13.4t 13.4U.S. dollar- and Deutsche mark-denominated liabilities. Project cost: $13.4 million.

IFC approved for the following three Turkish banks a $60 million-$90 million facilitythat will provide each bank with a line of credit to meet its export finance needs:

Finansbank Loan 10.0Project cost: $33.3 million. Syndicatons 23.3 33.3

Korfezbank Loan 8.0Project cost: $26.7 million. Syndications 18.7 26.7

KOC American Bank Loan 6.0Project cost: $20.0 million. Syndications 14.0 20.01

Regional Pam Gas B.V. will increase the supply of liquef ied petroleum gas in Hungary, Poland. Equity 9.6 9.6and Czechoslovakia. It will operate in joint ventures with privatized distribution companies,enlarge their delivery facilities in Eastern Europe, and build a distributon facility in Poland.Project cost: $157.2 million.

- IFC has made one ormoreprevious investments inr or loans to, tnis companyt This figure represents IFCs iritial exposure in a currency swap.

As a nghts issue below $250,000, this project s not included in the total number of projects approved in FY92.

50 FOUROPE

T EC H N ICA L ASS IS TAN C E AND AD VI SO RY P ROJ EC TS

FO C US DESCRIPTION

Central and Foreign direct investment FIAS analyzed the effective corporate tax burdens in Bulgaria, Czechoslovakia, Hungary, Polanb,Eastern Europe and Romania and organized a roundtable at which officials of these countries discussed ways to revise

their corporate tax systems with tax experts.

Baltic States Foreign direct investment In Estonia, Latvia, and Lithuania, FIAS is carrying out diagnoses of the frameworks for foreign investmentand making recommendations on improvements. The studies will be used not only by the Governmentsof these countries, but also by the European Commission, which is designing technical assistanceprograms for the Baltic states.

Bulgaria Corporate finance IFC designed a corporate restructuring and pnvatization strategy for Balkancar, one of the world's largestmanufacturers of forklift trucks.

CIS Project technical IFC coordinated project identification and technical assistance in privatization in the mining and metallurgyassistance and forestry sectors. The cost of technical experts was covered by I FC's Technical Assistance Trust Funds.

Czechoslovakia Capital market IFC made recommendations on the development of a voucher system and mutual funds for privatizingdevelopment state enterprises.

Capital market With IFC's assistance, the Ministry of Finance is developing a business plan for an Export Guaranteedevelopment Agency.

Capital market IFC advised the Government on the development of a stock exchange and helped draft laws anddevelopment regulations for securities and companies.

Corporate finance CKD Kompresory. a leading manufacturer of large-scale compressors, has set up a joint venture with aforeign partner with IFC's assistance.

Corporate f inance IFC advised Elitex Usti and Elitex Chrastava, textile machinery manufacturers, on pnvatization,identfying potental investors and assistng in negotations.

Corporate finance First Bmo, a manufacturing group, retained IFC to review its operations in preparation for privatization,and to assist in preparing sale documents, evaluating proposals, and negotiating with prospective jointventure partners.

Corporate finance IFC designed and implemented a privatization strategy for Grand Hotel Pupp, a histonc spa resort, andassisted in the selection of a foreign partner to invest in the refurbishment and upgrading of the hotel.

Corporate finance Kavalier Glassworks, a specialty glassware manufacturer, retained IFC to assess its strategic strengthsand weaknesses, restructuring needs, and privatization options.

Corporate finance IFC designed a privatization strategy for Skoda Pilsen, Czechoslovakia's largest industnal company,and assisted in the selection of a foreign partner for the company's electrical and locomotive-manufacturing units.

Project technical IFC provided technical assistance on information management systems and operations controlto a textile-assistance machinery manufacturer. The cost of external consultants was covered by the Technical Assistance Trust

Funds.

Greece Corporate finance IFC evaluated the business prospects of the 13 hotels forming the Astir Hotel Group and recommendeda divestiture strategy to the National Bank of Greece.

Hungary Capital market IFC is participating in an IBRD f inancial sector study. IFC's focus is venture capital and pension systems.development

Project technical Through its Technical Assistance Trust Funds. IFC supported a feasibility study of the forestry and woodassistance supply sector. The study could lead to an investment in a pulp mill.

Project technical IFC helped to f inance, through its Technical Assistance Trust Funds, market and feasibility studies forassistance a cellular telephone project for which IFC later approved an investment.

Project technical Through its Technical Assistance Trust Funds, IFC secured support for a technology transfer/promotionalassistance initiative to use waste oil products as fuel in cement kilns.

Poland Corporate finance IFC completedthe arrangementsforthe listing of afumiture manufacturer, Swarzedzkie Fabryki Mebli S.A.,on the Warsaw Stock Exchange. IFO managed a public offering for the company in fiscal 1991.

51

T EC H N ICA L AsS IS TAN C E AND AD VI SO RY PRO J EC TS

F O C U S DESCRIPTION

Poland Corporate f inance IFC has prepared a Polish cement company, Warta, S.A., for sale and is advising the Government oncontinueo' negotiations with potential investors.

Corporate finance As the Government's adviser on the restructuring and pnvatization of the Polish cement industry, IFChas carried out a strategic review of the sector and of each of the 19 companies in the industry. IFC hasdesigned a privatization plan for the sector and has been asked to implement the sale of six companies,in addtion to Warta, S.A.

Corporate f inance IFC is advising the Government on the restructuring and privatization of the lime sector, induding preparingthe sale of OPOLWAP S.A., a producer of quicklime and limestone products.

Technical advice IFC carried out a study of the export marketability of clinker/cement that would be produced by a proposedcement plant.

Portugal Corporate finance The Government, which is privatizing the cement industry, sought IFC's advice on the valuation of twocement plants and the privatization of a cement company.

Romania Capital market IFC is helping to draft laws and regulations for securities and companies, and to develop a securitiesdevelopment exchange commission and a stock exchange in Bucharest

Capital market The Government has sought IFC's advice on a law for the establishment of a leasing industry.development

Russia Foreign direct FIAS is finishing studies covering the legal environment and screening and approval of foreign directinvestment investment, corporate taxation and incentives, foreign exchange controls and rules, and the role of foreign

direct investment in the development of the financial sector.

Project technical IFC designed and helped to implement a program to auction 2,000 small enterpnses being prvatizedassistance by the city of Nizhny Novgorod. The services of privatization and legal experts were financed by IFC's

Technical Assistance Trust Funds.

Turkey Capital market I FC is advising the Government on the development of an automated stock exchange, monitoringdevelopment of capital market activity, and enforcement of capital market regulations.

Capital market IFC is participating in an IBRD financial sector mission covering the secunties markets and non-bankdevelopment financial intermediaries.

Yugoslavia Corporate finance The Privatization Agency and Development Fund of the Republic of Slovenia is preparing severalcompanies for privatization with IFC's assistance.

52 EUROPE

R E G I O N A L R E P O R T S L. A T I N A M E R I C A

AN D T 11 E C A R I B B E A N

IFC has approved aS15 million lean forits owvn acucceyvl cis

wvelol as a $15 rzaexiotesyndicated lean for

* Proen,iiga5S. A tohelp In the

extensionofe ga

pipeline inColombia.

INVESTMENT CLIMATE currency devaluations were unlikely, and the

Living staedacds ie Latin Amierica are showing esigs strong perforIances of some of thoe stock markets

of improvement as a result of economic liberaliza- in the region. IeF's index for emerging equity

lion. In 1991, for the first time in several years, markets showed that total returns (in U.S. dollars)

GDP growth in the region, at approximately 2.8 per- increased by 397 percent in Argentina, 192 percentcent, exceeded populationi growthi. The extenisive in Colomnbia, 173 percenlt in Brazil, 107 percentI in

fiscal adjustment by countries throughout the Mexico, 99 percent in Chile, and 48 percent in

region reduced the public sector's financing needs Venezuela. IFC's comnposite index for equity market

and improved the macroeconomic balance. A shift returns in Latin America increased by 134 percent

in economiic activity fromi the governmeint to the dutring 1991.

private sector has led to greater reliance on exports,

the liberalization of trade and investment, and In fact, during 1991 the inflow of foreign portfolio

reduced state intervention in private sector activity. investment in equity may have been large enough to

Most countries in the region have adopted policies offset the negative net transfer of resources on debt

promoting free trade as a way of increasing the and foreign direct investment. On another positive

competitiveness of domestic enterprises and note, the external debt burden lessened. It is estimat-

developing export markets. The governments of the ed that debt-servicing payments as a percentage

Andean Pact countries (Bolivia, Colombia, Ecuador, of exports of goods and services decreased from

Peru, and Venezuela) and the Mercosur countries 40 percent in 1984 to 26 percent in 1991.

(Argentina, Brazil, Uruguay, and Paraguay) are

promoting free trade areas. Mexico has continued to pursue policies of fiscal

stringency and economic liberalization. The overall

Private capital flows to Latin America reached fiscal deficit fell to 1.5 percent of GDP in 1991,

roughly $40 billion in 1991, compared with $15 from 3.5 percent in 1990 (cxcluding income from

billion in 1990 and $5 billion in 1989. Mexico and the sale of state enterprises). The rate of inflation in

Venezuela received the greatest volume of inflows, 1991 was 19 percent, compared with 30 percent in

followed by Argentina, Brazil, and Chile. The dra- 1990. The outlook for the private sector is positive

matic increase reflects growing investor confidence -private investment increased by 14 percent in real

in the region and is due, in part, to the privatization terms, and foreign direct investment is estimated to

of large state enterprises, the perception that major have doubled during the year, to roughly $5 billion.

53

Additional reforms put forward by the Government deregulation of the economy, and privatization of

included the promulgation of a law strengthening public sector cnterprises. Brazil has opened its stock

industrial and intellectual property rights and the markets to foreign investors. GDP growth in 1991

adoption of a new Agrarian Law governing the was 1.2 percent, a positive change after years of

"ejidos" (communal lands). stalled growth. However, the Government has not

yet succeeded in controlling inflation. The annual

Venezuela's economy grew by 9.1 percent in 1991, rate of inflationi was 438 percent in 1991; although

compared with 4.4 perccnt in 1990. Despite rapid high, it was significantly lower than in 1990, when

economic expansion, inflation declined to 31 percent, it climbed to 1,500 percent.

from 36.5 percent in 1990. The Government has con-

tinued its policy of fiscal restraint, and economic In 1991 Chile continued to pursue conservative fiscal

liberalization undertaken during the year included policies and a free-market philosophy; the country's

further trade liberalization, income tax reform, and macroeconiomiiic situationi remained stable. Total

privatizations. Forty percent of the Venezuelan tele- investment was high, accounting for approximately

phone company was sold to a consortium of foreign 19 percent of GDP in 1991. GC)P grew at a rate of

and local private companies for $1.9 billion. 5.6 percent in 1991, and inflation declined to 18.7

during the year, compared with 27.3 percent in 1990.

In Colombia the Governmeilt accelerated the pace

of trade reform by advancing its schedule of tariff Peru, which is also pursuing an economic adjust-

reductions for imports by three years. Investment ment program, has succeeded in reducing inflation

regulations adopted during the year were more from 7,639 percent in 1990 to 139 percent in 1991.

liberal. Inflation dropped to 27 percent in 1991, GDP grew by 2.5 percent. Bolivia ach. eved GDP

from 32 percent in 1990. GDP growth declined to growth of 4.1 percent and reduced the rate of

2.2 percent, in part because of an effort to reduce inflation to 14 percent. Trade liberalization

inflation by tightening monetary policy. continued in Uruguay, where real GDP increased

by 3 percent.

The Central American economies achieved only

modest growtl in 1991, in part because ofa drought IFC'S OPERATIONS IN THE REG [ON

that had a negative impact on both harvests and IFC has begun to work with the IBRD on private

electricity generation. Pcr capita income in the sector assessments for Brazil and Mexico, and there

region remained roughly constant. Economic are pLans to carry out private sector assessments

growth in the Caribbean was low; GDP in Haiti, for Colombia and Uruguay. These assessments

Barbados, and Saint Lucia declined. are intended to deepen the W\Torld Bank Group's

understanding of private sector developnment in

Argentina's stabilization and deregulation program these countries.

has resulted in a dramatic decline in the rate of

inflation, from 1,902 percent in 1990 to 139 percent IFC's goal of furthering economic growth in its

in 1991, and an increase in GDP growth to 5 percent. member countries by supporting private sector

GDP had declined steadily from 1987 through 1990. development is particularly appropriate in the

Trade reform continued during the year. Tariffs were context of the market-oriented policy changes being

reduced to an average of 12 percent. All surcharges adopted in Latin America. In one country after

and quantitative restrictions on imports, except another, the macroeconomic situation is becoming

those on automobiles, were eliminated. After declin- more stable, and impediments to private sector

ing for three vears, private investment increased by growth are being removed. However, countries in

1O percent in 1991, reflecting growing confidence the region are at different stages in the economic

that the liberalization of Argentina's economy will liberalization process, and, within each country,

be permanent. private companies are also at different stages of

adjustment, depending on SuChI factors as companiy

The structural adjustment process has continued size, access to capital, and the degree of domestic or

in Brazil, with the liberalization and further foreign competition. To accommodate -he diverse

54 LATIN AMERICA AND THE CARIBBEAN

of financial intermrediaries, such as securities firms

LOAN AND INVESTMENT APPROVALS, and investment-management companies. TheFY88-FY92 Corporation also supported the establishment of

(millions of US. dollars)

1,500 institutions such as venture capital companies andcredit-rating agencies. In countries with less devel-

1,250 oped financial sectors, IFC focused on finatncinig thecreation of basic financial institutions such as

1 000 | commercial banks and Icasing companies. It has1,000 provided advice on the privatization of commercial

750 ~~~~~~~~~~~~banks in several countries, or invested in newly750 ^ _ ^ |nprivatized banks.

500 The Business Advisory Service for the Caribbean

and Central America (BAS) helps entrepreneurs

250 X g al g structure projects and raise financing. The Service's

activities in 1991 are described on p. 59.

1988 1989 1990 1991 1992 PROJECT FINANCING AND RESOURCE

- Loan MOBILIZATION* Equity In fiscal 1992 IFC approved 45 projects in 13

* Syndications and underwriting countries in Latin America and the Caribbean,

compared with 45 projects in 11 countries in fiscal

1991. At June 30, 1992, the Corporation's committed

needs of its member countries in the region, IFC has portfolio included loans and investments for 231

broadened the range of services it offers in Latin companies in 22 countries, compared with 163

America. companiies in 23 counltries at June 30, 1991.

IFC's program in Latin America, particularly in

countries with larger economies, is focused on help- y92 FY91

ing sound companies gain access to the international (nuillions of U.S. dollars)

financial markets, through loan syndications withFinancing approved for IFC's account 607 502

leading international banks and international securi- Fianc approvees a n 7 52

ties issues. IFC is also introducing Latin American Loans and guarante 130 352Equity and quasi-equitv 130 150

companies to a broader range of financial productsand services, to allow them to diversify their fundinig Loa ications

Eoan syndcations 569 361sources and to take advantage of sophisticated risk-

Underwriting 77 23management techniques. An equally important fea- Underwriting a d 23

ture of IFC's program in the region is the provision

of advice and funding in connection with the priva-

tization of state enterprises, as a number of countries Committed portlfFsa 2,569 2,287Loans and guarantees 169 1,980

have undertaklen ambitious privatization programs. Equity and quasi-cquity 400 307

IFC is also assisting heavily indebted but otherwise

sound companies with financial restructuring. Comt portfolio hlfoote(loan participations) 837 521

Projects approved during fiscal 1992 spanned Total committed portfolio 3,406 2,808

a broad range of sectors. Many projects were in

natural resource-based industries; there were also

a large nurmber of capital markets projects. In In fiscal 1992 IFC achieved its goal of introducillg

larger countries with relatively well-developed more medium-sized Mexican companies to the

financial sectors, IFC emphasized the development international markets through loan syndications.

55

Also, the number of international commercial banks approved for three companies-Huantraico, Astra

willing to lend to Mexican companies through an Capsa, and Bridas S.A.P.I.C.-which are developing

IFC loan syndication has increased in recent years. oil fieLds acquired from YPF, the state owned oil and

A medium-sized company for which IFC approved a gas company.

syndicated loan in fiscal 1992 is Grupo Posadas, S.A.

de C.V., a hotel services company. IFC approved projects witlh important environi-

mental bencfits in both Argentina and Ecuador. A

In addition, IFC mobilized funds in the international $40 million syndicated credit line to E,anco Rio de la

markets for several Mexican companies by under- Plata in Argentina will help finance thie installation

writing and placing securities issues: a $72 million of compressed-natural-gas stations for private bus

equity offering by Grupo Posadas and a $100 million fleets and the conversion of buses in Argentina. In

Eurobond offering by Apasco, Mexico's second Ecuador IFC has approved financing of $5 million

largest cement producer. IFC has also approved a for a 5,000-hectare reforestation project undertaken

project in which it would co-lead manage a $208 mil- by Endesa and Botrosa, two leading wood-processing

lion international revenue bond offering for the companies, as described on p. 58.

Mexico Citv-Toluca Toll Road; this would be the

first international offering of this type by an issuer In Colombia IFC emphasized projects in natural

in Latin America since the onset of the debt crisis. resource-based industries, approving loans for a

natural gas pipeline and an oil pipeline. IFC also

The development of new financial instruments approved a currency-hedging facility that will enable

for Mexican companies was an important element Uniban, a banana trading company, tc manage cur-

of the Corporation's strategy. A $40 million risk- rency mismatches between its future transportation

managernent line extended to Banco Nacional de costs and its revenues while giving it the flexibility

Mcxico, S.A. (Banamex), Mexico's largest commer- to benefit from a potential improvement in foreign

cial bank, will allow the bank to provide its clients exchange rates.

with collars, currency and interest rate swaps, and

swaptions, hedging instruments for which demand In Venezuela IFC supported large greenfield

in Mexico is growing as substantial foreign exchange ventujres that take advantage of the country's low-

inflows resume. IFC is helping to support Mexico's cost natural gas, and abundant hydroel.ectricity and

financial sector reforms, which include the re-priva- minerals. For a $340 million project undertaken

tization of commercial banks and development of by Metor S.A. to build a methanol plant, the Corpo-

universal banking, with an equity investmenit of ration approved an equity investment of $7 mnillion

$7.3 million in Grupo Financiero Probursa, the and a loan of $134 million, including a syndication

country's first financial conglomerate. A $20 million of $100 million. It was also joint-lead rmanager in

agency credit line provided to Banco Mercantil del the underwriting and placement of a $33 million

Norte, S.A. (Banorte), a Monterrey-based regional international equity offering by Corinion, a

bank, will provide small and medium-sized enter- diversified industrial company.

prises with an array of financial products, including

long-term U.S. dollar loans, income-participating In fiscal 1992 IFC broadened the range of financial

loans, and convertible loans, services available to Brazilian companies. It helped

Companhia Petroquimica Camacari (CPC), a

In Argentina, which has embarked on a wide- polyvinyl chloride producer, to complete a $235 mil-

ranging privatization program, IFC helped to lion financial restructuring by providing a counter-

finance the privatization of a railroacd company, guLarantee of up to $75 milliorl on CPC's five-year

Ferroexpreso Pampeano S.A. IFC also approved international floating rate note issue. IFC also invest-

approximately $233 million in financing, including ed in and helped place a $43 million country fund for

loan syndications of $138 million, for oil and gas Brazil.

projects in Argentina, and helped domestic compa-

nies raise funds to acquirc state operations being In Peru IFC approved an equity investment and

privatized. Loans and equity investments were credit line for Sogewiese Leasing, which is expanding

56 LATIN AMERICAANDTHECARIBBEAN

its operations to provide lease financing to small and programs, the Corporation seeks opportunities to

medium-sized private companies. help private companies design successful bidding

packages for enterprises being privatized, particular-

TECHNICAL ASSISTANCE AND ADVISORY ly in industries where IFC has substantial investment

SFRVTCES experience, such as chemicals and petrochemicals,

I;C offered a full array of technical assistance and iron and steel. It has completed a valuation

and advisory services in Latin America and the of two of Brazil's leading producers of petrochemi-

Caribbean during the year. It advised small and cals. In other countries-for example, Argentina,

medium-sized enterprises and assisted governments Colombia, and Peru-IFC advises governments on

with capital market development. It provided advice developing and implementing privatization strate-

Onl corporate restructuring and privatization and on gies tailored to specific enterprises in key industiies,

foreign direct investment. such as cement, iron and steel, mining, industrial

services (powver generation and distribution, natural

In fiscal 1992 the Corporation advised the Govern- gas distribution), and telecommunications, where

ment of Peru on the privatization of a state-owned IFC has built up an extensive network of contacts

commercial bank and made recommendations on through its investment operations. IFC acted as

the further development of Mexico's securities financial adviser tn Argentina's Ministry of

market. It also provided technical assistance in Defense in the sale of Altos Hornos Zapla, a steel

capital market devclopmcnt in Chile, Jamaica, manufacturer.

and Venezuela.

During the year IFC also provided considerable

IFC has a two-pronged strategy in Latin America technical and financial advice to companies in Brazil,

with respect to privatizatiorl. In countries such Ecuacdor, Mexico, and VeTezuela, helping with

as Brazil, where the government is relying on its feasibility studies, business plans, modernization

own resources and expertise for implcmenting its and restructuring plans, and financial strategies.

It also advised the Government of Bolivia on the

feasibility of constructing a private sector gas

pipeline.

4, fThe Foreign Investment Advisory Service (FIAS)

!4 , became active in more countries in Latin Americaand the Caribbean in fiscal 1992, completing projects

in three countries and developing projects in four

others. In the Bahamas it advised the Government

on institutional arrangements for screening and

processing foreign investment. It also designedmeasures for simplifying the investment process

and creating an institutional framework to facilitate

foreign investment. In Honduras FIAS assessed

investment policies and practices, and assisted with

the design of an improved legal framework for

foreign direct investment. In Venezuela it continuedIFC and the Global to advise the investment promotion agency on

EnvironmentFacility will developing strategies for attracting more foreign

provide-funding for investment.an,mioactarn'

reforestation projectin Ernudarlo

undertakent by twvowood-processing

corr,panies, Fndesaand Botrosa.

57

A REFORESTATION PROJECT IN ECUADOR

In June 1992 FC's Board of Directors approved a $5 millioni loan for a reforestation project in Ecuador as part of IFC's

strategy to support projects with a positive environmental impact. T he project, consisting of land preparation

and the planting of 5,000 hectares of indigenous tropical hardwood tree species, will eventually allow Enchapes

Decorativos S.A. (Endesa) and Bosques Tropicales S.A. (Botrosa) to be self-sufficient in tropical timber raw materials.

The companies are owned by the Durini Group, Ecuador's largest wood-processinggroup, which has made a strategic

decision to ensure its long-term raw material supplyfrom forests it owns and manages.

This is the first projectjointlyfinanced by IFC and the Global Environmenit Facility (GEF), which is providing $2.5

million in project and research grants. GEF, which is implemented by UNDP, UNEP, and the IBRD, provides grants

for environmentally oriented investment projects in developing countries as part of an effort to help these countries to

address selected environmental problems that are global in scope.

The project will help increase forest cover levels in the project area and contribute to the reduction of greenhouse gas

emissions through carbon sequestration. It will help to preserve and rehabilitate the regional ecosystem and to

conserve biodiversity; 610 hectares consistingprimarily of intact native tropical moist forest will be naintained as

ecological reserves, withformalstatus asprivateforest reserves. The reserves will also serveas a seedsourceforfuture

reforestation.

In an effort to involve the local community, Endesa and Botrosa will provide seedlings to localfarms and nurseries.

It is hoped that this will establish the basis for a viableforestry-based local economy while providing the companies

and other commercial purchasers with additional sources of wood in thefuture.

This project, one of thefirst of its kind, will demonstrate the commercial viability of sustainable tropical forestplan-

tations based largely ot indigenous hardwood treespecies andserve as a modelforsimilarprojects woyl,dwide. Nearly

allplantationforestry in tropical countries currently involves the use ofexotic species-such aspine and eucalyptus-

in monotypic plantations.

A GEF-funded research program will enhance the project's environmental impact by monitoring ancl documenting

thefollowing aspects: commercialforestry andforest ecology, biological diversity, carbon sequestration levels,

and socioeconomic conditions in the project area. Currently there is virtually no informationt available on tropical

plantations that use indigenous hardwood species. The research program will be implemented by the Durini Group's

private non-profitforestry research center, Fundaci6n Forestal J.M. Durini, with the assistance of local and

international research organizations. Itsfindings will be disseminated in Ecuador and internationally.

58 IATIN AMFRICA AND THE CARIBBEAN

BUSINESS ADVISORY SERVICE

TheBBusinessAdvisoryService (BAS) acts as a bridge betweenprojectsponsors in the Caribbean and CentralAmerica

wishing to start new businesses or expand, modernize, or diversify existing onies, and sources of long-term finance,

both within the region and worldwide. Itprovides advice and technical assistance on such matters asfinancial struc-

turing, sources offunding, partnership arrangements, and marketing.

During 1991 BAS arranged$20 million in loan and equityfinancingfor 8projects andprepared 13projectproposals.

Since it wasfounded, it has assisted in raisingfinancingfor over 60projects, which have resulted in the creation

of 9,000 new, jobs. Total investment in these projects comes to $227 million.

BAS's Barbados office, which serves the eastern Caribbean, comnpleted its second fill year of operations in 1991.

BAS plans to open additional offices shortly in CentralAAmerica and the southern Caribbean.

Fundingfor BAS is provided by IEC, the Inter-Americatn Developmnent Bank, UNDP, and the Governments of

Canada, Germany, Japan, the Netherlands, and the United States. IFC is the executing agency. In 1991 BAS

continued to improve itsfinancial self-reliance, defraying almost 20percent of the total cost of its services throughfees

collectedfrom clients.

EXAMPLES OF PROJECTS

ANGUILLA

BAS prepared the business plan and helped secure $360,000 infinancingfronm a local cotnmercial bankfor Green

Cuisine, a producer of hydroponically grown lettuce and herbs.

BARBADOS

The Barbados Wildlife Reserve has helped broaden awareness of ecological issues in Barbados since 1985. BAS raised

$250,000from a commercial bank to help the Reserve acquire an additional 5.5 acres and increase its services.

JAMAICA

BAS was retained to help structure the rehabilitation and increase the capacity of Jamaica Citrus Growers,

a cooperative thatproduces concentratedfrozen citrus juice and relatedproducts. BAS helped raise $1.5 rtmillion

infinancingfor theproject, which willprovide employmentfor about50 additional staff, andfor manyfarmers

and their families.

59

P R OJ E C T S A P P R OV ED T N F I S C A L 1 9 9 2

( M I L L I O N S O F U . S . D O L L A R S)

P R OJ E C T D E S C R I P T I O N FLMtNCINGTYPE TOTAL

Argentina IFC participated in the equity of Astra - Compania Argentina del Petrdleo S.A.*, Syndicatons 23.0an energy and petrochemicals company. Project cost: $26.1 million. Equity 3.1 26.1

IFC will provide an eight-year syndicated loan to Banco Rio de la Plata S.A.' in the form Loan 20.0of a credit line for relending in U.S. dollars, mainly to prvately owned bus companies for Syndications 20.0 40.0converting diesel-powered buses to compressed natural gas. Project cost: $120.0 million.

Bridas S.A.PI.C. , a private oil company, will develop a production field in a joint venture. Loan 35.0buy privatized oil and gas reserves, and develop its own production fields. Project cost: Syndications 80.0$238.0 million. Quasi-equity 15.0 130.0

Ferroexpreso Pampeano S.A. will rehabilitate and modernize a recently privatized Loan 11.0railway network connecting grain-producing areas with two of Argentna's main grain- Syndications 16.0exporting ports. Project cost: $54.8 million. Quasi-equity 2.0 29.0

Frigordfico Rioplatense S.A. will modernize a privatized meat- processing plant and Loan 12.0expand its existing plant. Project cost: $34.8 million. Syndications 6.0

Equity 1.0 19.0

In two separate projects, IFC approved financing for oil field development and further Loan 15.0exploration of the Huantraico block in the Neuquen basin. The block is owned and Syndications 35.0operated by a joint venture between Petrolera Argentina San Jorge (85 percent) and Equity 27.0 77.0IFC (15 percent). Project cost: $240.4 million.

IFC subscribed to two rights issues by Industrias Petroquimicas Argentinas S.A. (Ipako)*, Equity 0.9 0.9a chemicals and petrochemicals company. Project cost: $0.9 million.

Malteria Pampa S.A. will double capacity at its malt plant to 160,000 tons per year. Almost Loan 12.0all of the output will be exported to Brazil. Project cost: $38.6 million. Syndications 6.0 18.0

MBA Bolsa S.A. will be one of the f irst stockbroking companies operating on the Argentine Equity 0.2 0.2stock exchange. Project cost: $0.9 million.

Oleaginosa Oeste S.A. will establish a second sunflower oil extracting plant with a crushing Loan 15.0capacity of 2,000 metnc tons per day. It will produce sunflower meal and edible sunf lower Syndications 15.0oil for export. Project cost: $51.0 million. Quasi-equity 5.0 35.0

Bolivia IFC arranged a swap for Compania Minera del Sur*, a mining company that produces Swap 2.31 2.3zinc, lead, and silver, to reduce foreign exchange nsk on the company's borrowings.Project cost: $6.0 million.

Empresa Minera Inti Raymi S.A. (IRSA) will expand its Kori Kollo open pit gold and Loan 35.0silver mine, and build a new carbon-in-pulp mill. Project cost: $163.9 million. Quasi-equity 5.0 40.0

Brazil IFC arranged a syndicated loan for Bahia Sul Celulose, S.A.*, a timber, pulp, and paper Syndications 60.0 60.0company Project cost: $229.0 million.

IFC will structure and participate in the placement of the Brazilian Investment Fund Inc., Equity 3.0 3.0a new semi-closed-end investment fund. Project cost: $43.2 million.

IFC assisted Companhia Petroquimica Camacari (CPC) in issuing floating rate notes in Guarantee 75.0the international capital markets. Project cost: $235.0 million. Standby 15.0 90.0

IFC will make an equity investment in CRP-CADERI Capital de Risco S.A., a new venture Equity 2.0 2.0capital fund. IFC will also take equity in CR Management Company, the company set upto manage the fund. Project cost: $15.0 million.

IFC is restructuring its investment in, and providing additional investment to, Dende Loan 0.5do Para S.A. (Denpasa),* Brazil's second largest producer of palm oil. Project cost: Quasi-equity 0.1 0.6$15.3 million.

Minera,c6es Brasileiras Reunidas S.A.* will expand facilities at its Pico iron ore mine. Loan 25.0It will also extend a railway line and improve a manne terminal. Project cost: $266.1 million. Syndications 25.0

Quasi-equity 10.0 60.0

60 LATIN AMERICA AND THE CARIBBEAN

P R O j E C r s A P P R O V E D I N F I S C A L 1 9 9 2

( M I L L ItO N S O F U . S . D O L L A R S)

P R OJ E C T D E S C R I P T I ON FINANCINGTYPE TOTAL

Brazil IFC wil co-lead manage and underwrite a $150 million international public offering by Underwriting 30.0 30.0con6nued Riocell S.A. of preferred shares in the form of American Depositary Receipts. The company

is expanding its partially integrated pulp and paper plant. Project cost: $825.2 million.

Chile IFC arranged an additional syndication for Companlia de Telefonos de Chile S.A. (CTC)*, Syndications 63.0 63.0a telecommunications company. Project cost: $260.0 million.

Colombia Apex S.A. will establish a new secunties broking company, Casa de Bolsa S.A., together Equity 1.0 1.0with an associated fund management company, Fiduciaria del Valle S.A. (FDV). Projectcost: $5.5 million.

IFC participated in a rights issue by Leasing Bolivar S.A.*, a leasing company. Quasi-equityProject cost: $20,000.

IFC will provide additional financing for Oleoducto de Colombia S.A.*, which has been Loan 20.0formed to build and operate an export oil pipeline. Project cost: $100 million. Syndications 40.0 60.0

Promotora de la Interconexi6n de los Gasoductos de la Costa Atlantica S.A. Loan 15.0(Promigas S.A.)* will add capacity to its gas transportation operations by building a loop Syndications 15.0 30.0to its main pipeline and adding compressors. Project cost: S51.2 million.

Uniban, a banana trading company, will lease two refrigerated ships for its U.S. subsidiary, Swap 5.Ot 5.0Turbana. By intermediafing a currency swap, IFC will help the company to reduce itsexposure to higher lease charges caused by currency fluctuations. Project cost: $5.0 million.

Costa Rica Millicom Costa Rica S.A. will expand its cellular telephone network. Project cost: Loan 1.5$0.6 million. Syndications 3.5

Quasi-equity 2.0 7.0

Ecuador Botrosa and Endesa, two wood-processing companies. will plant indigenous tropical Loan 4.0hardwood species on 5,000 hectares of partially degraded and reforested land. This is Quasi-equity 1.0 5.0IFC's first project to receive grant financing from the Global Environment Facility.Project cost: $12.8 million.

Jamaica IFC will provide Telecommunications of Jamaica Ltd. with a facility to swap the Swap 12.1 t 12.1company's debt service payments into U.S. dollar payments. Project cost: S12.1 million.

Mexico Aislantes Le6n, S.A. de C.V.. the only vertically integrated battery maker in Mexico, Loan 5.0will be restructured to strengthen its f inancial position. exploit its market advantages, and Quasi-equity 9.5 14.5attract a foreign partner. Project cost: $40.7 million.

Apasco, S.A. de C.V.*, Mexico's second largest cement producer, will build a greenfield Loan 10.0cement plant with a capacity of 1.25 million tons per year. It will also invest in terminals, Underwriting 15.0 25.0transport, ready-mix, and updating of existing plants. Project cost: $100.0 millon.

IFC will provide a multiproduct agency line to Banco Mercantil del Norte, S.A. (Banorte). Loan 17.0This will allow IFC to provide, in a cost-effective manner, scarce long-term financing to small Quasi-equity 3.0 20.0and medium-sized enterprises in Mexico. Project cost: $45.0 million.

IFC will provide a risk-management facility to Banco Nacional de Mexico, S.A. (Banamex)', Hedging 40.0 40.0one of Mexico's leading commercial banks. The facility comprises interest rate and currencyswaps, collars, and swaptions to manage interest rate and currency exchange risks.Project cost: $120.0 million.

IFC participated in the equity of Grupo Financiero Probursa, a new financial group Equity 7.5 7.5consisting of a commercial bank, a brokerage house, and insurance, leasing, factoring,bonding, warehousing, and foreign exchange companies. Project cost: $97.5 million.

Grupo Posadas, S.A. de C.V., which operates 37 hotels with a total of more than Loan 20.011,000 rooms, pnmarily in Mexico, will build more than 1,700 new rooms and refinance Syndications 50.0$28 million of expensive medium-maturity debt. Project cost: $142.0 million. Underwriting 3.8 73.8

IFC will provide additional financing to Indelpro, S.A. de C.V.*, to help meet cost increases. Loan 2.0The company was established to design, construct, and operate a greenfield polypropylene Syndications 6.0plant in Altamira. Project cost: $30.0 million. Quasi-equity 2.0 10.0

61

PRO J EC TS AP PRO V ED IN F IS CAL 1 9 9 2

( MI L LI ON S OF U. S. DO L LA RS)

PR OJ E C T DES CR IP TIO N FIANANCI.NGI YPE 1ODAL

Mexico IFC will co-lead manage a $208 million international revenue bond offering for the Loan 10.0continued Mexico City-Toluca Toll Road. Project cost: $312.7 million. Underwriting 10.0 20.0

IFC will provide a new deferrable loan for Polimar, S.A. de C.V.*, a chemicals and Quasi-equity 4.6 4.6petrochemicals company, to help cover changes in the scope of the project and costincreases for the ABS resins plant it is building. Project cost: $23.4 million.

IFC participated in the underwriting and placement of a S200 million intemational Underwriting 8.2 8.2share issue by Vitro, S.A.*, a major Mexican manufacturing company. Vitro, a long-standing IFC client, is one of the f irst Mexican companies listed on the New York StockExchange. Project cost: $228.4 million.

Peru IFC will provide a leasing credit line and arrange syndicated financing for Sogewiese Loan 5.0Leasing* to provide critcal foreign exchange medium-term financing to the Peruvian Syndications 5.0industrial and service sectors. Project cost: $11.5 million. Equity 1.5 11.5

Trinidad IFC will subscribe to a capital increase rights issue by Development Finance Limited*r Equity 0.1 0 01,and Tobago Project cost: $0.1 million.

Uruguay IFC is restructurng its investment in, and will provide up to $2.2 million in additional Quasi-equity 2.2 2.2investment to, Azucitrus S.A.*: which grows and exports fresh citrus fruits and juices.Project cost: $16.3 million.

Venezuela IFC helped structure, underwrite, and place the $37 million international tranche of a Equity 1.0$53.3 million common share offering by Corimon', a diversified industnal company. Underwriting 10.1 11.1The proceeds will prepare the company for expansion in the petrochemicals sector.Project cost: $53.3 million.

IFC invested in the equity of MAVESA S.A., a Venezuelan food-processing company Equity 9.0 9.0that produces fats and oils. Project cost: $60.0 million.

Metor S.A. will design, build, and operate an export-oriented greenf ield methanol plant Loan 34.0with a capacity of 740,000 metric tons per year at the Jose Petrochemical Complex on Syndications 100.0Venezuela's coast. Project cost: $340.0 million. Equity 6.8

Standby 3.5 144.3

Regional IFC will act as a best efforts co-placement agent for the Latin America Capital Fund Equity 5.0 5.0Limited, a closed-end fund for portfolio investment in Latin American securities. Thefund will specif ically target equity securities of smaller companies in Argentina, Brazil,Chile, Mexico, and Venezuela. Project cost: $52.0 million.

tFC has made one ormore previous investments in, orloans te this companyt This figure represents IFC' initial exposure In a currency swap.t Currency swap andl collar the figure represents IFCs Intial exposure.* As a rights issue below $250000, this proLect is not included in the total number of projects approved in FY92

62 LATIN AMERICA AND THE CARIBBEAN

T EC H N ICA L ASS IS T AN CE AND AD VI SO R Y PR O J EC TS

F O C U S DESCRIPTION

Argentina Corporate finance IFC is advising the Ministry of Defense on the privatization of Altos Homos Zapla. a specialty steelproducer, arranging a tender process, and assisting in the negotiation of the sales documentation.

Corporate finance The Ministry of Defense has awarded a follow-up mandate to IFC for advice on the sale of ECA, a cableand wire manufacturer.

Project technical Through its Technical Assistance Trust Funds, IFC supported a feasibility study and secured support forassistance managerial and promotional expertise in setting up a credit line to f inance the conversion of buses from

diesel fuel to compressed natural gas.

Project technical Through its Technical Assistance Trust Funds, IFC secured support for preparatory work on a satelliteassistance telecommunications project.

Bahamas Foreign direct investment FIAS provided advice on the insttutional arrangements for screening and processing foreign investmentand designed measures for simplifying the process.

Bolivia Technical advice The Government requested IFC's assistance in evaluating the feasibility of a private sector gas pipeline-

Brazil Corporate finance IFC completed avaluation of the core businesses of Oxiteno S.A. and Ultraquimica Participapoes S.A.,two leading Brazilian petrochemical companies-

Financial and Ceval Alimentos, S.A., a diversified food producer, requested advice on financial and operationaloperational advice restructuring.

Technical advice IFC provided technical assistance to S/A Industria e Comercio (Chapeco), an agro-industrial group. inand project technical formulating a modernization and rehabilitation plan. The cost of sectoral experts was covered by IFC'sassistance Technical Assistance Trust Funds.

Chile Capital market IFC advised the Govemment on the strengthening of domestic capital markets.development

Project technical In connection with a proposed hydroelectric project, IFC conducted a study, financed by its Technicalassistance Assistance Trust Funds, of alternative energy sources and the environmental impact of the proposed

project.

Colombia Capital market The Govemment retained IFC to do a valuation of Banco del Comercio in preparation for pnvatization.development

Ecuador Technical advice IFC helped Tripetrol to assess the technical and f inancial viability of an oil exploration and developmentproject and prepare a feasibility study.

El Salvador Foreign direct investment FIAS is assisting the Government in identifying weaknesses in the country's commercial code and makingrecommendations on strengthening the code to attract more foreign investment.

Honduras Foreign direct investment FIAS identf ied problems in the country's policies and practices with respect to foreign direct investmentand helped to design an improved legal framework.

Jamaica Capital market IFC participated in an IBRD financial sector development project. IFC's focus was the securities market.development

Mexico Capital market IFC made recommendations on the development of the securities market.development

Financial advice IFC is helping Mexico Desarollo Industrial Minero, S.A. de C.V., a mining company, to develop abusiness plan, including a capital investment program.

Project technical Through its Technical Assistance Trust Funds, IFC helped to finance feasibility and market studies for aassistance cellular telecommunications project.

Technical advice IFC assisted Rh6ne-Poulenc Quimica de Mexico in carrying out atechnical auditof some fertilizer plantsbeing privatized.

Nicaragua Project technical Through its Technical Assistance Trust Funds. IFC supported a feasibility study for an export-orientedassistance shrimp-farming operation.

63

T EC H N ICA L ASS I ST AN C E AND AD VI SO RY PR O J EC TS

FO C US DESCRIPTION

Peru Capital market IFF advised the Government on the restructuring and privatization of Banco Popular, a state-owneddevelopment commercial bank.

Projecttechnical Through its Technical Assistance Trust Funds, IFC supported a pre-feasibility study for the rehabiliationassistance and privatization of an iron mine.

Venezuela Capital market IFC participated in an IBRD project on capital market development.development

Foreign direct FIAS continues to advise CONAPRI, the new private investment promotion insbtution, with a focus oninvestment internal structuring and promotion strategies.

Project technical Through its Technical Assistance Trust Funds, IFC supported a feasibility study of a proposal to convertassistance pulp mill waste liquor into useful products.

Technicaltfinancial advice Complejo Siderurgico de Guayana S.A., an iron ore processing company, requested IFC's help withproject structuring and development of financial strategies.

Technical advice IFC helped Corporacion Proinvest C.A., a petrochemicals company, to formulate a strategic businessplan and prepare a feasibility study.

64 LATIN AMIERICA AND THE CARIBBEAN

REG IO NA L REPO RT S M I D D L E E A S T

A N D N O R T H A F R I C A

for continued GDP growth and steadily increasing

investments are good.

Iran began liberalizing its economy in 1989, after the

war with Iraq came to an end, as part of its recon-

struction program. A strong economic recovery is

now under way. Various price distortions, including

the exchange rate and financial imbalances of the war

<Nj -' E years, are gradually being reversed. Development of

8Al,^ ,. Ay Wi. i ' * Iran's private sector has resumed with the activation

of the domestic capital market and divestitures of

public enterprises.

¾ _ Jordan's economy proved resilient in 1991; GDP

growth was positive despite the negative conditions

- 't. s - - ~created by the Gulf crisis. Construction, transitThe Alexandria W '4 trade, and good agricultural output provided the

National Iron andSteel Company impetus for growth,

(ANSDK) in Egypt

hlas ivenl IFC i'f/7 In Lebanon GDP is estiimiaLed to have grown bya mandate to

provide advice on. about 30 percent in 1991, a strong recovery fromrestructurinigand its depressed levels of 1989-90. However, macro-

privatization.IFC has also economic imbalances remain a cause for concern.arratnged two Private investments are beginning to take place in

currency swaps services and small businesses, but a strong revivalfor the company.

will require further improvement in the region's

political situation.

lNVESTMENT CLIMATEA clear economic turnaround is taking place in The Republic of Yemen, where the economy is

the countries of the Middle East and North Africa. heavily dependent on the normalization of intra-

Among the goals of economic reform programs regional relationships, continued to suffer from

under way in the region are realistic and competitive lower levels of exports of goods and labor to its

exchange rates and interest rates; decontrol of prices, traditional regional markets, as well as from de-

trade, and investments; and anti-inflationary financ- creased aid from its creditors in the region. Although

ing of public deficits. significant oil reserves are being discovered in

Yemen, it will be some time before benefits from the

A comprehensive restructuring of the Egyptian oil sector have an impact on the rest of the economy.

economy is taking place. Many prices, including

interest rates and exchange rates, have been Morocco's economy has been growing steadily since

liberalized. By November 1991 the various ex- the mid-1980s. With inflation below 6 percent, price

change rates had been unified into a market- stability has been impressive. Over the past five years,

based rate, thus ending a multiple exchange-rate private inveslment has accounted for, on average,

system that had endured for more thani two decades. 60 percent of total investment, and foreign direct

The institutional and legal frameworks for pri- investment has nearly quadrupled. These positive

vatization, another major aspect of Egypt's reform developments reflect sound macroeconomic policies:

program, are now in place. In 1991, after years of demand management, exchange rate realignments,

deficits, Egypt's overall balance of payments and sweeping reforms of incentives.

showed a surplus. GDP grew by about 2 percent

during the year because of a strong rebound in Tunisia registered an equally solid macroeconomic

tourism and other service activities. Prospects performance as a result of continiued strict fiscal and

65

monetary policies. Since 1985 CDP growth, led in pipeline of projects in Egypt, in tourism as well as in

part by an increase in non-oil exports, has averaged other sectors. During the year IFC sent operational

about 4 percent yearly. T'he lunisian Government is missions to Iran and Lebanon, the first such missions

continuing to liberalize the economy by gradually in many years.

removing restrictions on trade; as a result, there is

growing pressure on the private sector to diversify Economic reforms in Morocco, Tunisia, and Algeria

the country's export base. are leading to an increase in private sector activity in

these countries. IFC broadened the scope of its oper-

Algeria's economic reforms continued in 1991. ations in Morocco and Tunisia, as foreign investment

The governmenl is committed to its reform pro- flows to the former increased and the latter opened

gram , which shoLuld permit the private sector to play its mining sector to private investment. The Corpo-

ani increasirngly importanit role in the economy. ration is working with the IBRD on an assessment

of the private sector in Morocco, with particular

l1F;S OPERATIONS IN THE REGION focus on identifying constraints to the development

As part of the Corporation's reorganization, which of Morocco's capital markets. In fiscal 1992 IFC

took effect on July 1, 1992, the Middle East and North approved its first project in Algeria, which has

Africa Department has been expanded. Beginning in opened up its economy.

fiscal 1993, it will cover Pakistan as well as the former

Soviet republics in Central Asia-Kazakhstan, PROJECT FINANCING AND RESOURCE

Kyrghiyzstan, Tadjikistan, Turkmenistan, and MOBILIZATION

Uzbekistan-xvhich had applied for membership In fiscal 1992 TFC approved 15 projects in 4 countries

in IFC by the close of the fiscal year. in the Middle East and North Africa, compared with

8 projects in 4 countries in fiscal 1991. At Junc 30,

The volume of financing approved by IFC for 1992, the Corporation's committed portfolio

projects in the region in fiscal 1992 was more than included loans and investments for 46 companies

double that of the previous year, reflecting the in 7 countries in the region, comparecl with 40

improving economic environment. The Corpora- companies in 7 countries at June 30, 1991.

tion's strategy in the region is tailored to the specific

economic situation of individual member countries.

In countries such as Jordan and Yemen, which suffcr

from a shortage of foreign exchange, IFC's focus is on LOAN AND INVESTMENT APPROVALS,FY88-FY92

projects generating foreign exchange; in countries (mibons of US. dollars)

with small domestic markets, such as Tunisia, on 300

export-oriented manufacturing projects; and, in the

larger economies, on both export-oriented projects 250

and projects producing goods for domestic markets.

200Throughout the region the Corporation is increas-

ing financing and advisory activities in connection 150

with financial sector development, which has

been hampered in some countries bv excessive _

governiment intervention in the form of controls 100

on interest rates, directed and subsidized credits,

distortionary tax regimes, and weak legal and 500I lregulatory frameworks.

Following the deregulation of E,gypt's tourism 1988 1989 1990 1991 1992

industry, opportunities for private investment and U Loan

demanid for IFC financinlg increased significantly. v Equity* Syndications and undeowriting

In fiscal 1992 the Corporation developed a strong

66 MIDDLE EAST AND NORTH AFRICA

FY92 FY91 investors that will produce liquid helium for export(milionS of U.S. dollars) to Europe.

Financing approved for IRE's account 173 64The Corporation played a strong catalytic role in

Loans and guarantees 131 55the Middle East and North Africa in fiscal 1992; for

Equitv and quasi-equity 22 9every $1 rFC approved for projects, other investorsand lenders are providing $7. This rcflects IFC's

Loan syndications 8Tstrong syndications effort and its emphasis on the

Total financing approved 254 64 development of small and medium-scale projectsthrough the use of credit lines.

Committed portfolio for IFC's account 332 222 TECHNICAL ASSISTANCE AND ADVISORY

Loans and guarantees 273 169 SERVICFS

Equity anld quasi-equity 59 53Committead portfolioheldi for9othersIn fiscal 1992 IFC offered a full array of technical

assistance and advisory services in the region,(loan participations) 149 73T lot npalrcommittdportfion) 148 23 including advice to governments on capital market

development, privatization, and foreign direct

investmcnt.

In Egypt IFC agreed to arrange a second currency In association with the IBRD, tihe Corporation

swap for the Alexandria National Iron and Steel provided advice to the Egyptian Government and

Company (ANSDK), a successful rebar producer, specialized financial institutions on such matters

enabling the company to hedge a substantial portion as professional investment management, pooled

of its currency exposure resulting from mismatches investment vehicles, and use of the securities

in its revenues and obligations. IFC worked with market to facilitate privatization. IFC also provided

Sumitomo Bank Capital Markets Ltd (SBCM) technical assistance for securities market develop-

to structure a transaction whereby SBCM took ment in Iran, Lebanon, and Oman, and identified

ANSl)K's credit directly while IFC provided a constraints to capital market development in

partial credit enhancement. Mlorocco.

IFC approved S9 million in financing for a new In connection with privatization in the region,

resort hotel on the Red Sea. It also approved loan the Corporation's strategy is to help governments

and equity financing for the first company in the identify enterprises that can be prepared for

Middle East to produce tropicalized refrigerator privatization in a relatively short period of time and

compressors; this project benefits from Egypt's to help enhance the value of these enterprises before

competitive wages and sources a significant share privatization. In Egypt IFC submitted proposals for

of its input requirements locally. In the energy sector, assisting with the privatization of two enterprises,

the Corporation approved an additional equity and the Government of Egypt has requested advisory

investment of $13 million in the development of and financial services from IFC in connection with

an oil field in the Westerni Desert. IFC's first invest- the privatization and expansion ofANSDK, the steel

ment in this project was in 1986. complex in Alexandria. IFC also drafted a funding

proposal for the Moroccan Government's privatiza-

IFC supported Morocco's financial sector reforms tion program. The Government used the proposal

by arranging syndicated credit lines with ten inter- to mobilize financing for its privatization program

national banks for four Moroccan commercial from foreign donors.

banks, as described on p. 68. It also helped finance

a lead and zinc mine in Tunisia, the country's first In fiscal 1992 the Foreign Investment Advisory

private-sector mining venture, and approved a Service (FIAS) completed projects in Tunisia and

$10 million loan for its first project in Algeria, Yemen and held discussions about new projects

a joint venture between Algerian and foreign requested by several conuitries. FIAS conducted a

67

project identification mission in Algeria; in fiscal

1993 it will carry out a diagnostic study of the

investment environmenet. In Tun-isia it identified

the impediments to foreign investment and provided

advice on promotional efforts and institutional

arrangements for attracting foreign direct

investment.

In Yemen FIAS provided assistance in establishing

a new investment promotion agency, which will

function as a one-stop shop for assisting investors.

FIAS is preparing advisory projects in lunisia and

Morocco for restructuring investment promotion

agencies and helping to develop promotion strategies

in both countries.

SYNDICATED CREDIT LINES FOR FOUR MOROCCAN BANKS

IFC led a syndicate of ten international banks in providing credit lines totaling $110 million to four .Moroccanbanks. IFC is providing $40 million for its own account and syndicating the remaining $70 million. The borrowing

banks, Banque Cornmerciale du Maroc, Banque Marocaine du Cornmrnerce Exterieur, Credit du MVaroc, and

Wafabank, will use the credit lines to make loans offive to ten years to small and medium-sized privately owned

Moroccan companies.

The lFC-led syndication marks thefirst time these four Moroccan banks have been able to borrow term funds in

the international financial markets without a government guarantee. The participants in IFC's syndicated loan areleading international banks from France, Germany, Luxembourg, the Netherlands, Spain, and Switzerland. This wasthefirst time a Spanish bank participated in an IFC syndication.

This project is part of a program developed by IFC and the IBRD to assist Mforocco with financial sector reformsdesigned to make the country's banking system more market-oriented. The IBRD is providing a policy-based loan

to the Government of Morocco and a line of credit to eightfinancial intermediaries.

68 MIDDLEFASI AND NORTH AFRICA

P R OJ E C T S A P P R O V E D I N F I S C A L 1 9 9 2

( Mi I 1 L L O N S O F U .S. D O L L A R S)

P R O J E C T D E S C R I P T I o N FINANCINGTYPE TOTAL

Algeria Helios S.P.A., a new joint venture between an Algerian company and a French company, Loan 10.0 10.0will build, commission, and operate a plant to extract and liquefy helium. The feedstock willcome from an adjacent liquef ied natural gas facility. Project cost: $96.2 million.

Egypt Alexandria Carbon Black Company, the first carbon black manufactunng plant in Egypt, Loan 7.0will have an annual capacity of 20,000 tons and use locally available feedstocks. Equity 1.5 8.5Project cost: $40.0 million.

IFC helped the Alexandria National Iron and Steel Company (ANSDK)* to swap its Swap 24.7t 24.7long-term yen-denominated obligations. The company, an internationally competitive steelproducer, is being privatized. Project cost: $24.7 million.

IFC increased its investments in the Meleiha* and Aghar oil and gas concessions in the Equity 13.0 13.0Western Desert to develop the gas reserves in both concessions. Project cost: $36.4 million.

Misr Compressor Manufacturing Company will be the first refrigerator compressor Loan 13.8manufacturer in Egypt, with an estimated capacity of 1.4 million units per year. Project cost: Equity 3.0 16.8$79.0 million.

Pioneer Edible Oil Company will set up the first plant in Egypt for extracting: refining, and Equity 1.2 1.2packaging edible sunflower oil. It will produce 21,000 tons per year. Project cost: $17.0 million.

Serena Beach Hotel Company will build and operate the 250-room four-star Al Guseir Hotel Loan 6.0and the 180-room three-star Serena Beach Hotel at Quseir. Project cost: $23.5 million. Equity 1.2

Standby 1.5 8.7

Morocco IFC arranged a syndication of $110 million for the following four Moroccan banks, providingeach bank with a line of credit to f inance economically viable projects oy small and medium-sized companies:

Banque Commerciale du Maroc Loan 12.0Project cost: $200.0 million. Syndications 21.0 33.0

Banque Marocaine du Commerce Ext6rieur Loan 12.0Project cost: $200.0 million. Syndications 21.0 33.0

Credit du Maroc Loan 8.0Project cost: $200.0 million. Syndications 14.0 22.0

Wafabank Loan 8.0Project cost: $200.0 million. Syndications 14.0 22.0

CIMASFI is building a new plant with the capacity to produce 660,000 tons of cement Loan 15.7annually, as well as a 160,000-ton bulk port terminal. Project cost: $99.4 million. Syndications 5.2 20.9

IFC participated in an expansion project by Cimenterie Nouvelle de Casablanca', Loan 13.5which will increase production capacity from 1.2 million tons to 1 9 million tons per year. Syndications 5.8 19.3Project cost: $88.9 million.

Tunisia IFC made a second loan to Societe Industrielle des Textiles*, a textile company, to finance Loan 5.0 5.0a modernization and expansion program. Project cost. $24.0 million.

Societe Miniere de Bougrine S.A., Tunisia's first privately managed mining company. Loan 14.0will develop a zinc.ead mine in northwestern Tunisia. It will produce about 38,000 tons Equity 2.3 16.3of zinc and 8.000 tons of lead per year for 15 years. Project cost: $74.2 million.

IFC has made one or more previous investments in, or loans to. this companyt Tmm figurerepresents IFC iniialexposure in caurrenyswap.

69

T EC H N IC AL ASS IS TAN C E AND A DVI SO RY PRO J EC TS

F O C U S DESCRIPTION

Egypt Capital market In the context of an IBRD project on secunties market reform, IFC provided advice on dtevelopmentdevelopment and regulation of pooled investment vehicles and professional investment managemeIt.

Technical and IFC has been given a mandate to assist in the privafization of the Alexandria National Iron and Steelfinancial advice Company, and to help restructure the company's balance sheet, raise funds for its expansion, and provide

advice on the technical configuration of the expansion.

Iran Capital market IFC prepared a technical analysis of the computerization needs of the Teheran stock exchange.development

Lebanon Capital market IFC is considering securties market development as part of an IBRD review of the country's economy.development

Morocco Capital market IFC is carrying out a review of the country's capital market as part of an IBRD private sector assessment.development

Project technical Through its Technical Assistance Trust Funds, IFC supported a study to evaluate alternative technologiesassistance forthe production of aluminum fluonde.

Oman Capital market IFC prepared a studyfor the Ministry of Finance and Economy on the impact of development bond issuesdevelopment on the country's financial markets.

Tunisia Foreign direct investment FIAS identified the impediments to foreign direct investment and advised the Government on apromotional strategy and institutional arrangements.

Yemen Foreign direct investment FIAS helped to establish a new investment promotion agency, the General Authority for Investment.

70 MIDDLE EAST AND NORTH AFRICA

M A N A G E M\1 E N T A N D 0 R G A N I Z A T 1 0 T\

IFC Executrise

Vice President,

certc!;ut lEG VicePresidents: standing,7

frosmn left-tn - =gtRichard Frank,

Wilfried Kaffeniberger,andDaniel Adams;

sected, fromleft to right,

fose Camachto,

Judhi:irParmar,JImal-ud-din Kassum,

Makarand Dehejia.

MANAGEMENT operations in each region, most regional capital

IFC's programs and activities are guided by its t47 markets activities will be handled by specialist

memlber counltries through its Board of Goveroors groups within each Regional Department. Specialist

and Board of Directors. Each country appoints a Departments will be responsible for a large part of

Governor, generally the Minister of Finance or IFC project financing, coordinating their activities

equivalent position, and an Alternate. IFC's with the Regional Departments.

corporate powers are vested in its Board of

Governors, who delegate most of these powers ludhvir Parmar, Vice President for Investment

to the Board of Directors. The 22 Directors, who Operations, rctired from IFC at the end of the fiscal

approve IFC's project financing operations, meet year after many years of distinguished service. Twoat World Bank Group headquarters in Washington, Vice Presidenits for Operations, eacih bearing re-

D.C. During the fiscal year, Barber Conable sponsibility for a group of Regional and Specialist

retired as President of the W9brld Bank and IlC, Departments, were appointed: WVilfried Kaffenberger,

and was succeeded by Lewis Preston. Sir 'William formerly Vice President for Portfolio and Advisory

Ryrie, IFC's Executive Vice President, is responsible Operations, and Jemal-ud-din Kassum. Daniel

for overall management of IFC and day-to-day Adams was appointed to the new position of Vice

operations. President for Capital Markets. In addition to super-

vising the financial sector activities of the Regional

ORGANIZATION Departments, he will be responsible fur a Central

IFC is headquartered in Washington, D.C., and Capital Markets Department (see below). Richard

has offices in London, Paris, and 'lokyo as well as Frank continues as Vice President for Finance and

regional and resident missions in 19 countries. Planning and will supervise a new Corporate Plan-

ning Department. Jose Camacho remains Vice

As the year came to a close, the Corpor-ation's Presidenit and General Counsel, and Makarand

management structure was reorganized. The new Dchejia was named Vice President of Corporate

organization, which took effect on July 1, 1992, Business Development.

reflects the need to combine in-depth country

knowledge and stronger regional strategies, on the REGIONAL DEPARTMENTS

one hand, with increased sectoral specialization and lFC's five Regional Investment Departments will be

expertise on the other. The number of Regional responsible for the development and implementation

Departments was reduced to five, and four new of strategies for the countries they cover, business

Specialist Departments were established. To improve promotion, relationships with member governments,

coordination and strategic management of [FC's and coordination with the IBRD, and will process all

71

projects not handled by the Specialist Departments. New Product Development, will develop new

Within each Regional Department a Capital Markets lines of business in the capital markets area and

Division will be responsible for developing invest- handle projects that are global or cross-regional

ments in financial institutions and for designing in scope.

credit lines for financial intermediaries.

Corporate Finance Services (CFS), whose focus

Of the former Soviet republics, 14 had applied for is on advisory projects, will continue to assist state

memiiberslh ip in IFC by the end of fiscal 1992. The enterprises and governments with Privatizahion,

Baltic states and the European republics will be and private companies with corporate and financial

covered by thc Europc Departmcnt, the Central restructuring.

Asian republics by the Investment Department for

Central Asia, the Middle East, and North Africa, TECHNICAL AND ENVIRONMENT

which will also handle projects in Pakistan. DEPARTMENT

The new Technical and Environment Department

The operations of the advisory facilitics cstablished by (TED), which rcplaces the Enginecring Department,

IFC to help small-scale entrepreneurs in the different will continue to provide technical support to the

regions will be supervised by the appropriate Regional operational departments, and its Director will exer-

Department. cise professionial supervisioni over tech-inical staff

in the Specialist Departments.

SPECIALIST DEPARTiMENTS

Four new Specialist Departments have been created IFC's Environment Unit, now part of TED, has been

to handle projects in areas where demand for IFC's strengthened to reflect IFC's growing emphasis on

services is growing and where IFC can make a strong environmental matters. Its activities ar e described

developmental contribution: Agribusiness; Chemi- on p. 75.

cals, Petrochemicals, and Fertilizers; Infrastruc-

ture; and Oil, Gas, and Mining. These Departments, The new Tourism and Textile units will centralize

which are staffed by both financial and technical techlnical, financial, and marketing expertise in

staff, will be responsible for developing in-depth these important sectors and provide support to the

knowledge of the industries they cover, building Regional Departments in connection with invest-

contacts with companies involved in the industry ment decisions,

around the world, and implementing a program of

investments in all developing regions. The Technical Advisory Service (TAS), which

was established in fiscal 1991, makes IFC's technical

The Central Capital Markets Department (CCMD) and industry expertise available to com panies and

will cooperate with the Regional Departments to governments. TAS provides fee-based assistance in a

develop strategies for capital market development. A variety of areas, including operational restructuring,

new Relations, Advisory, Technical Assistance, and market assessments, feasibility studies, and strategic

Specialists Unit will coordinate IFC advice to industry assessments.

member governments on capital market develop-

ment and provide specialized assistance to the CORPORATE BIUSINESS DEVELOPMENT

Regional Departments. The new Vice President for Corporate BusinessDevelopment is responsible for initiating ideas

CCMD's International Securities Division will for IFC operations in all areas except capital markets.

continue to haindtle the structurinig, underwritilng, IFC's Representatives in l ondon, Paris, and

and placement of international securities issues by Tokyo report to this Vice Presidency, which will

companies in developing countries and of investment also handle promotional activities in North America.

funds. CCMD will continue to be responsible for the Corporate Business Development, which is responsi-

Emerging Markets Data Base, wihicih tracks 20 stock ble for fund-raisinig from donor governments, will

markets in developing countries and is commercially manage IFC's Technical Assistance Trust Funds

available to subscribers. A new division, Global and program.

72 MANAGEMENT AND ORGANIZATION

OPERATIONAL SUPPORT PERSONNEL AND ADMINISTRATION

The Economics Department reviews t(he ecoiofiic The fiunctionis of the Personnel and Administration

merit of investment proposals, prepares country Department have expanded considerably over the

risk assessments and studies of particular industries past two years. Its Director acts as the Executive

in support of IFC operations, and performs the Vice President's adviser on management and

Corporation's economic intelligence functions. The organizational matters. As of July 1, 1992, the

Economics Department includes IFC's Operations Corporate Relations Unit reports to Personnel and

Evaluations Unit, which carries out anialyses of past Adnminlistration.

IfC investments.

Personnel and Administration is responsible for

The Legal Department provides legal advice in devising and implementing a proactive career devel-

connection with IFC's activities, assists in negotiat- opment program for IFC staff, who will be rotated

ing investment contracts, drafts investment agree- periodically to different positions in the Corporation

ments, and prepares documentation for IFC's project so that they can broaden their experience. The

finance, securities, and syndications activities. Department's recruitment function is being

strengthened. IFC seeks highly skilled, international-

The Special Operations Unit, which has expertise ly diverse staff with broad-based experience,

in asset valuation and workouts, is responsible for primarily from the private sector. To keep pace

helping companies in TFC's portfolio that are with1 the growth of IFC's operations, the Personnel

experiencing difficulties. The Unit reports to the and Administration Department conducts cam-

two Vice Presidents for Operations. paigns worldwide to identify and recruit experienced

professionals in a range of disciplines, including

FINANCE AND PLANNING DEPARTMENTS finance, economics, law, and engineering.

IFC's Treasury and Financial Policy Department is

responsible for financial policy, IFC's borrowings IFC's staff come from 91 countries. At June 30,

in the international markets, liquidity policies, and 1992, there were 732 regular staff on IFC's payroll,

asset and liability management techniques. It also compared with 656 on June 30, 1991. A total of 966

works on financial instruments for client companies, staff were emploved by IFC at the end of the fiscal

such as swap internmediations. As of July 1, 1992, year, incltuding long-term consuL]tants and temporary

IFC's Syndications Division reports to the Director staff; staff in IFC's overseas missions, who are

of this Department. generally nationals of the host countries; and other

specialized staff.

The new Corporate Planning Department will pre-

pare the annual corporate business plan and monitor

its implementation. It will also be responsible for the

coordination of private sector development activities

with the IBRD, including the preparation of private

sector assessments in individual member countries,

and for formulating assistance strategies based on

these assessments.

The Controller's and Budgeting Department is

responsible for preparing and managing the Corpo-

ration's budget, monitoring the financial and operat-

ing performance of the Corporation, preparing IFC's

financial statements, and handling information tech-

nology in IFC. Additionally, the Portfolio Operations

Support Division, which monitors ITC's portfolio,

now reports to the Department.

73

THE FOREIGN INVESTMENT ADVISORY SERVICE

In response to the strong interest of developing member countries in attractingforeign direct irivestment, IFC created

the Foreign InvestinentAdvisory Service (FAS) in 1986. After 1988, FIAS was operated jointly by lFC and

the Multilateral Investment Guarantee Agency (MIGA), and in fiscal 1992 it was decided that FIAS should be

supervised by a committee chaired bylFC's Executive VicePresidentand consistingof representatives of IFC, MIGA,

and the IBRD.

Thisfiscal year, the Boards of IFC, MIGA, and the IBRD approved a proposal to provide thefunding necessary to

support FIAS's growing program, as well as to give greater flexibility to FIAS management. Under the new

arrangement, the IBRD will become a co-sponsor of FIAS. The General Manager of FIAS will be responsible for

day-to-day operations and for relations with governments on operational matters. Beginning infiscal 1993, the World

Bank Group will providefunds to cover approximately 50 percent of FIAS's costs, with IFC providing half of this

amount, and MIGA and IBRD each providing one-fourth. The remaining50percent will be covered by contributions

to the FIAS Trust Fund, fundingfrom bilateral and multilateral agencies, and clientfees.

To date, FIAS has worked in over 45 developing countries, advisinggovernments on the laws, policies, regulations,

and procedures needed to create an attractive investment climate and increase inflows of foreign direct investment.

In addition, FIAS helps governments to build effective institutional frameworks for interacting with investors, and

to develop investment promotion strategies. FIAS's primary objective is to help governments fill long-term develop-

mZent needs by getting the greatestpossible benefitfromforeign investment-not only capital, but also technology and

managerial expertise.

Duringfiscal 1992, FIAS completed 24projects in 21 countries, as well as one regionalproiect in Eastern and Central

Eturope. Twelve of theseprojects were in the poorest developing countries with annualper capita incornes of less than

$600. FIAS has been particularly active in sub-Saharan Africa. Details on FIAS's activities in specific countries can

be putnd in the regional chapters.

74 MANAGEMENI AND ORGANILAIION

TIHL ENVIRONMENT UNIT

The Environtnenit Unitplays an important role in IFC's operations. In addition to reviewingJFCprojectsfor

compliance with World Bank and international guidelines and with regulations in the host countries, the Environ-

ment Unit develops IFC's environmental policies and programs, and promotes private investment in environmental

projects in developing countries.

IFC projects are classified according to their potential environmental impact. Projects in category A have been

identified as having the potentialfor diverse and significant environmental impacts and require comprehensive

environmental assessments. Projects in category B may result in a specific environmental impact and must comply

with certain predetermined performance standards, guidelines, or design criteria to mitigate this impact. These

projects require an environmental analysis, rather than a comprehensive environmental assessment. Projects that

would not normally have an environmental impact (for example, certain types of capital markets projects) are

classified in Category C and do not require a detailed environmental review. During the year IFC continued to

strengthen proceduresfor reviewingprojects to ensure that environmental concerns are adequately addressed in all

IFC's operations.

The Environment Unit also promotes private sector involvement in environmental industries, which offer interesting

investment opportunities, particularlyfor companies providing clean technologies thatpreventpollution and waste

at thie source. To increase awvareness of these opportunities, IFC published a report on the market for environmental

goods and services in nine developing countries (Chile, Hungary, Indonesia, Malaysia, iMexico, Pakistan, Poland,

Thailand, and Turkey). The report, Investing in the Environment: Business Opportunities in Developing

Countries, was released in May 1992, in anticipation of the United Nations Conference on1 Environment and

Development (UNCED) in Rio de Taneiro in June 1992. The marketfor environmental goods and services is still in

its infancy in developitng countries, but is poisedfor rapid growth during the next decade. In fiscal 1992 the number

of inquiries and project proposals in this area increased substantially, particularly in connection with water supply

and waste water treattnent services, hiazardous waste disposal, and solid waste disposaL

In fiscal 1992 the Corporation received itsfirstgrantfrom the Global Environment Facility (GEF), a joint World

Bank-UNDP operation, for a reforestation project described on p. 58.

75

THE BANKING ADVISORY PANEL THE BUSINESS ADVISORY COUNCIL

IFC's Banking Advisory Panel, which is composed

of eight executives fromn leading iiiternlationial

financial institutions, meets regularly with IFC

management to discuss the Corporation's activities IFC's Business Advisory Council is composed of

and policies. eminent industrialists, bankers, and statesmen from

around the world. At the Council's Annual Meeting

Abdlalif Y. Al-Harnad, Director General in May 1992, Council Tnembers shared their exper-Arab Fund for Economic and Social Development tise and views on business issues relevant to theKuwait Corporation's activities with IFC management.

Jan Ekmi-tani, Vice Chairmnan The Council wvas saddened by the death this yearSvenska Handeisbanken of Daniel Parker, a member whose experience andStockholm, Sweden wisdom will be missed.

Wilfried Guth, .Memhber- of the Supervisory Board 5. Babar AMi, AdviserDeutsche Bank A.G. Packages LimitedFrankfurt, Germany Lahore, Pakistan

Jean-Yves Haberer, President Thomas J. Bata, Chairman of the BoardCredit Lyonnais Bata LimitedParis, France Don Mills, Ontario, Canada

Yusuke Kashiwagi, Chairman Sir Michael Caine, ChairmanThe Bank of Tokyo, Ltd. Booker plcTokyo, Japan London, E.nglanid

Lord Roll of Ipsdeu, President Sir Roderick Carnegie, ChairmanS.G. Warburg Group p.l.c. Hudson Conway LimitedLondon, England Malverin Victoria, Australia

Anthoniy Solomon, Chairman of the Econottmic Ariston M. Chambati, Chairman and C'hiefExecutiveProgram T.A. Holdings Limited

Institute for East-West Studies Harare, ZimbabweNcw York, NY, United States

Mustapha Faris, Chief Executive OfficerGerrit J. Tammes, Vfice Chairman of the Board Banque Nationale pour Ic D6vcloppemntNMB Postbank Group EconomiqueAmstcrdam, Nctherlands Rabat, Morocco

76 MANAGEMENT AND ORGANIZAT.ON

Jaime Garcia Parra, Ambassador Jose Pifiera, Executive ChairmanEmbassy of Colombia Asset-Chile Ltd.Washington, DC, United States Santiago, Chile

Tae Yong Hahm, Chairman of the Board Marcus V. Pratini de Moraes, ChairmanKorea Long Term Credit Bank PPH - Companhia Industrial de PolipropilenoSeoul, Korea Rio de Janeiro, Brazil

Carl H. I lahn, Chairmani, Board of Management Rong Yiren, ChairmanVolkswagen A.G. China International Trust and InvestmentWolfsburg, Germany Corporation

Beijing, ChinaKazuo Haruna, ChairmanMarubeni Corporation Erol Sabanci, Vice Chairman of the BoardTokyo, Japan Akbank, T.A.S.

Istanbul, TurkeyFouad Hashem Awad, Chairmnan

Aluminium Sulphate Company of Egypt Ibrahim A. Salamah, Vice Chairman and ChiefCairo, Egypt Executive Officer

Saudi Basic Industries CorporationOlorogun Michael C.O. Ibru, O.ER. Chief Executive Riyadh, Saudi ArabiaIbru GroupLagos, Nigeria Janko Smole, Formerly Federal Minister of Finance

Belgrade, YugoslaviaSamuel E. Jonah, Managing DirectorAshanti Goldfields Corporation (Ghana) Limited Amadou Moctar Sow, Chief Executive OfficerAccra, Ghana Societe Industrielle de Produits Laitiers

Dakar, SenegalXV. Sidney Knox, Chairmati and ChiefExecutiveNeal & Massy Holdiings Limited Julius Tahija, ChairmanPort of Spain, Trinidad P.T. Caltex Pacific Indonesia

Jakarta, IndonesiaStefan Lewandowski, ChairmanHaste International, Ltd. Joseph B. Wanjui, ChairmanWarsaw, Poland East Africa Industries Ltd.

Nairobi, KenyaKeshub Mahindra, (ChairmanMahindra & Mahindra Limited G&ard Worms, Managing DirectorBombay, India Compagnie Financiere de Suez

Paris, FranceErnesto Martens, President and Chief Executive

Officer Jaime Zobel de Ayala, President and ChairmanVitro, S.A. of the BoardMexico Avala Corporation

Makati, Metro ManilaEugenio A. Mendoza, President of the Corporate Philippines

Alanagement CommitteeMendoza Enterprises Federico J. L. Zorraquin, PresidentCaracas, Venezuela S.A. Garovaglio y Zorraquin

Buenos Aires, Argentinalarrin Nimmanahaeminda, President and Chief

Executive OfficerThe Siam Commercial Bank, Ltd.Bangkok, Thailand

77

1-HEADQUARTERS

* OVERSE-ASREPRESENTATIVES

* PROJECT DEVELOPMENTFACILITIES

HEADQUARTERS BUENOS AIRES HARARE LAGOSiMaipu 1300, piso 12 CABS Centre, 11lth Floor Plot PC 10, off Idowvo Taylor Street

tgso I Street, N.W 1001 Buenos Aires Jason Moyo Aveniue Victoria Island, P.O. Box 127W'ashington, DC 20433, U.S.A. Argentina RDO. Box 2960 Lagos, NigeriaTelephone: (1-202) 477-1234 Telephone/Fax: (54-1) 312-4399, Harare, Zimbabwe Telephone: (234-1) 616044,616196Fax: (1-202) 477-6391 312-9435 Telephone: (263-4) 794660, 794869, Fax: (234-1) 616360, 617164

OVERSEAS 794869REPRESENTATIVES CAIRO Fax: (263-4) 701659 LONDON

5 El Falah Street 4 MillbaiukABIDJAN Mobandessin ISLAMABAD London SWilP 3JACorner of Booker Washingtoni anid Giza, Egypt 26 A, Shahrah e Jamshuriat United KingdomJacques Aka Cocody Streets Telephone: (20-2) 347-3739, 347-8081, Ramna 5 (G@511) Telephone: (44-71) 222-771101 BOP. 1150 302-6533 Post Bag No. 3005 Fax: (44-71) 976-6323Abidijani-01, COte dIlvoire Far: (20-2) 347-3731 Islamabad, PakistanTelephone: (225) 44-32-44, 4l4-65-50 Telephone: (92-51) 819781/6,8924166 MANILAFax: (225) 44-16-87 CASABLANCA Fax: (92-51) 924335 Room 300, Molti-Storty Budlding

30, avenue des E.AR. Central Bank of the PhiilippinesBANGKOK Casablanca, Morocco ISTANBUL Roxast BoulevardOlympia Buildinig, 5th Floor Telephone: (212-2) 31-28-88, 31-22-78 Taksim Manila, Philippines956 Ramsa IV Road Fax: (212-2) 31-S1-Il Mete Caddesi iNo- 24/3 Telephone: (63-2) 521 -1664, 521-5507Bangkok 10500, Thailand Istanbul, Turkey Fax: (63-2) 522-0136Telephone: (66-2) 235-5311/6 DOUALA Telephone: (190-1) 243-2593, 243-2126Fax: (66-2) 236-6467 Rue Flatteurs F-ax: (90-1)j 249-2476 Moscow

B.P 4616 Hotel MetropolBUDAPESTI Douala, Cameroon JAKARTIA 1/4 Teatralny ProyezdSobs Trade Center Telephone: (237) 42-80-33 Lippo Building, 3rd Floor RadishchevZalSuite;# 72 (7th floor) Fax: (237) 42-80- 14 J1. H.R. Rasona Said Kav. B-tIO Moscow 103012, RussiaNagymezo utca 44 R.O Box 1324/JKTf Telephone: (7-095) 927-6129, (7-501)11- 1065 Budapest VI Kuningan, Jakcarta, Indonesia 927-6709Hungary Telephone: (62-21) 516152, 516099 Fsx: (7-095) 975-2355, (7-501) 927-] 010

78 Fax: (62-21) 5299439, 516156

NAIROBI SAO PAULO PROJECT DEVELOPMENT BUSINESS ADVISORY SERVICENVicv Park Towers, 17th Floor Rua Guararapes, 2064 - cj. 104 FACILITIES FOR THE CARIBBEAN ANDMonrovia Street Sao Paulo - SP CENTRAL AMERICA (BAS)P.O. Box 30577 04561-004 AFRICA PROJECT DEVELOPMENT 1850i 1 Street, N.W.Nairobi, Kenva Brazil FACILITY (APDF) Washington, DC 20433, U.S.A.Telephone: f254-2) 224726, 228477 Telephone: (55-11) 531-1629,241-4049 18501 Street, NW Telephone: (1-202) 473-0900Fax: (254-2) 213925, 213926, 213927 Fax: (55-11) 241-3073 Washinigtoni, DC 20433 Fax: (1-202) 334-8855

U.S.A.

NEW DELHI TOKYO Telephonc: (1-202) 473-0508 Eastern Caribbean Regional OfficeNo. 1, Panchsheel Marg Kokusai Buildilg, Room 913 Fax: (1-202) 334-8632 Musson Building, 2nd FloorChanakyapuri 1-1, Marunouchi 3-chome Hincks Street, P.O. Box 259New Delhi 110 003, India Chiyoda-ku Inimeuble CCIA, 17th Floor Bridgetown, BarbadosTelephone: (91-I1) 301-1306 Tokyo t00, Japan 01 BP. 8669 Telephone: (1-809) 429-6298Fax (91-11) 301-1278, 301-1281 Telephone: (81-3) 3201-2310 Abidjan-o0, Cote d'lvoire Fax: (1-809) 429-5809

Fax: (81-3) 3211-2216 Telephone: (225) 21-96-97, 21-23-03PARIS Fax: (225) 21-61-51 POLISH BUSINESS ADVISORY66, avenue d'1ena VIENNA SERVICE (PBASI75116 Paris, France Bosendorferstrasse 2111 Southampton House, 5th Floor Al. Niepodleglosci 186Telephone: (33-1) 40-69-30-60 1010 Vienna, Austria Box UA 400, UTnion Avenue 00-608 Warsaw, PolandFax: (33-1) 47-20-77-71 Telephone: (43-222) 505-7306, 505-2853 Harare, Zimrbabwe Telephone: (48-22) 259781, 259784,

Fax: (43-222, 505-1226 Telephone: (263-4) 730967 259788PRAGUE Fax: (263-4) 730959 Fax: (48-22) 259880Siroki 5 WARSAW110 00 PraIa I LIM Center, 9th Floor International House, 6th Floor SOUTH PACIFIC PROJECT FACILITYCzechoslovakia Aleje leiozoLimskie 65/79 Mama Ngina Street (SPPF)'Telephone: (42-2) 232-5430, 232-5472, 00-697 Warsaw, Poland P.O. Box 46534 Level 18, 15 Castlereagh Street232-5494 Telephone: (48-22) 300758, 300949 Nairobi, Kenya GPO Box 1612Fax: (42-2) 232-5533 Fax: (48-22) 300759 Telephone: (254-2) 217370 Sydney, NSW 2001, Australia

Fax/Telephone: (48-39) 120162, 120169 Fax: (254-2) 339121 Telephone: (61-2) 221-8544Fax: (61-2i 221-7375

79

O RG AN I ZAT IO NA L S TRUC TU RE

as of July 1, 1992

V President d

Executive Vice Piresident

Economics a _Vice President anldGeneral Counsel

| Personnel and diitaon r, r;,.r.g. rr

' . ~~~~~~~~~~~~~~~~~~~Vice PresidentCorporate Relations Corporate Business Devclopment

I Vice President Vice President l Vice President V ice Presidenit i_TOperations Capital MarketsOl rl Operations TFinace and Planning

W - T r' _ W:t w t 1,~~~~~~~-. o ~

Financ MEnvi armnt Fnancat Purs

80~~'. MAAEIIN AN DRGANIZATIDN=

O til, Gas, and Minn Euop 0 r=;;-t-,r- -=

Agribusm ess L.' dLti A,Xetica and t Mddetno,id t llugru; tdbe ~ C-b- BudgltVIning

| Technical and 1t{Special Operations t| Tesr n

80 MANAGEMIENIT AND ORGANIZATION

F I NAN C I AL REV I EW

IFC registered a strong financial performance in SOURCES OF INCOME, FY92 AND FY91

fiscal 1992. Net income was $180 million, the (niillions of US. dollars)

second highest in its history, representing a 7.5 per-

cent return on net worth. IFC successfully borrowed FY92 FY91

$664 million in the international financial markeis Interest and financial fees 343.3 348.1

during the year, a significanit increase over previous Dividends and profit particpations 35.4 31.6

years. A $1 billion capital increase was approved by Realized gains on equity sales 113.3 112.9

the Corporation's Board of Governors.Service fees 32.2 25.4

INCONIE From deposits and securities 156.4 181.4

Because of the low interest rate environment Other (losses) income 0.8 (4.1)

prevailing during the year, gross income was slightly

lowver than in fiscal 1991, although lending margins 681.4 695.3

were maintained. Income from the equity portfolio

and advisory services rose. Loan portfolio income

was $343 million in fiscal 1992, compared with equities reached $35 million, an increase of 12 per-

$348 million in fiscal year 1991. The collection cent over fiscal 1991.

rate of interest payments declined somewhat,reflecting a small increase in the dollar volume IFC's liquid asset portfolio income of 5 156 million

of the non-performing portfolio. from deposits and securities was lower thaan in fiscal

1991, and the gross return on the total liquid asset

Income from the equity portfolio was $149 million, portfolio during fiscal 1992 was 6.2 percent, com-

up from $145 miltion in fiscal 1991. IFC continued pared with 8.2 percent for the previous year. The

to take advantage of favorable market conditions lower return was due to the decline in the level of

in several countries and sold its investments in interest rates in the marlkets during the year. The

a number of companies, realizing capital gains carrying gain on the portfolio of borrowed funds in

of $113 million. In fiscal 1992 dividends from liquidity narrowed slightlyto 38 basis points during

fiscal 1992, from 44 basis points in fiscal 1991.Nonetheless, as a result of the return on the overall

portfolio arid the cairyinzg gain on the borrowedNET INCOME funds, income from the liquid asset portfolio once

(in million, of us. dollars)

again contributed significantly to the Corporation's

200 profits.

175 Service fee income came to $32 million in fiscal1992, up from $25 million in fiscal 1991. The in-

150 crease was due primarily to fees generated by privati-

125 zation and corporate finance advisory work andmobilization activities.

100EXPENSES

75 In fiscal 1992 total expenses decreased to $501 mil-

lion, from $529 million in fiscal 1991. Administrative

50 C * expenses for the year came to $140 million, and

25 covered a broad array of investment and advisoryactivities, as well as field offices and regional and

0 resident missions. As a result of the rapid growth in1988 1989 1990 1991 1992 inew iinvestmiienit business during the five-year period

1988-92, administrative costs devoted to investment

operations dropped from 3.3 percent to 2.6 percent

81

of the average disbursed portfolio. Reflecting the $1.3 billion at June 30, 1992, and retained earnings

worldwide decrease in interest rates, IFC's borrow- were $ 1.1 billion. Total net -worth reached $2.4 bil-

ing costs of $258 million in fiscal 1992 were signifi- lion at year-end, compared with $2.1 billion at the

cantly less than the borrowing costs of $305 million end of fiscal 1991.

in fiscal 1991, if new borrowings are considered.

The Corporation's contributions to special programs Regularly scheduled payments under the 1985

-the Africa Project Development Facility, the Busi- capital increase were completed in fiscal 1992.

ness Advisory Service for the Caribbean and Central Payment was received for 93 percent of the shares

America, the South Pacific Project Facility, the Polish allocated to IFC's members, and payment for 2 per-

Business Advisory Service, and the Foreign Invest- cent has been deferred until August 1, 1993, for

ment Advisory Service-came to $2.3 million, the reasons of economic hardship. The remaining 5 per-

same as in fiscal 1991. cent have been added to IFC's pool of unallocated

shares, which are available to both new and current

The $101 million provision for losses brought total member countries.

loss reserves to $477 million at June 30, 1992-

9.6 percent of the disbursed loan and equity The Corporation's debt-to-equity ratio-outstand-

portfolio, which reached $5 billion at the close ing borrowings and guarantees against subscribed

of the fiscal year. At the end of fiscal 1991, loss capital and retained earnings-was 2.15:1 at year-

reserves represented 9.3 percent of the year-end end, compared with 1.95:1 at the encd of fiscal 1991.

disbursed portfolio.

FUNDING MANAGEMENT

CAPITAL AND RETAINED EARNINGS In fiscal 1992 IFC continued to pursue its two-

During the year IFC's Board of Governors approved pronged funding strategy, maintaining a benchmark

a $1 billion increase in the Corporation's capital, yield curve through its highly visible public bond

as explained on p. 84. In addition, IFC's Board of issues in the Eurodollar market, while achieving cost

Directors approved a resolution on June 18, 1992, savings and market diversification through low-cost

recommending approval of a $150 million capital borrowings in other markets. This strategy has en-

increase to accommodate memberships of the abled the Corporation to gain broad market accep-

former Soviet republics and the Marshall Islands; tance in a relatively short time and to borrow on very

$132 million of this amount will be allocated to the favorable terms.

new members, and the balance will be available to

accommodate future requests for shares. In fiscal 1992 IFC established a $500 million

Medium-Term Note (MTN) program consisting

During fiscal 1992 member countries paid in capital of two $250 million tranches, one for the European

of $107 million, increasing total paid-in capital to market and one for the U.S. market. The program

ADMINISTRATIVE EXPENSES BY CATEGORY, FY88-FY92(millions of U.S. dollars)

EXPENSE CATE G OR Y 1 9 8 8 1 9 8 9 1 9 9 0 1 9 9 1 1 9 92

Staff costs 41.8 45.4 63.0 64.8 78.6

Consultants 2.8 3.9 4.4 6.5 8.5

Operational travel and representation 7.2 8.7 10.5 12.7 15.8

Payments to IBRD for office space and services 8.5 8.7 15.0 17.7 17.7

Overheadsandother 11.3 10.1 13.0 18.0 19.1

TOTAL 71.6 76.8 105.9 119.7 139.7

82 FINANCIAL REVIEW

enables IFC to carry out, over an extended period -- t

of time, a number of smaller structtured transactions 1(that can result in attractive sub-LIBOR funding

costs. It is thus intended to complement discrete

issues of publicly traded bonds. In fiscal 1992 IFC

launched two issues totaling $107 million under

the U.S. domestic MTN program. Both issues were gIF(so-called PERLS (Principal Exchange Rate Linked

Securities) notes arranged by Morgan Stanley & Co. DEWS W. ]lw,§i_CO@tD

Incorporated. ,'

IFC's total borrowing program for fiscal 1992 came _ (to $724 million, compared with $702 million in fiscal

1991. IFC borrowed $664 million in the internation-

al markets, compared with $598 million in fiscal

1991. The remaining $60 million was borrowed from

the IBRD, with which IFC has maintained a Master

Loan Agreement.

IFC's largest borrowing in fiscal 1992, as in previous

years, was a Eurodollar bond issue. The $300 million

benchmark issue, launched in November 1991, was

lead managed by Deutsche Bank Capital Markets

Ltd., with Credit Suisse First Boston Ltd. as joint-

lead manager. Other market borrowings in fiscal

1992 included the Corporation's second offerings in

both the Portuguese escudo bond market (Esc 11 bil-

lion-$76 million equivalent) and Swedish kronor

bond market (SKr 500 million-$86 million equiva-

lent), as well as a Spanish pesetas 10 billion ($95 mil-

lion equivalent) issue.

All market borrowings in fiscal 1992 were swapped

into variable-rate U.S. dollars to fund new loans

approved by IFC during the fiscal year. The sub-

LIBOR cost achieved through these swaps contrib-

uted significantly to the lowering of IFC's overall

funding costs.

IFC plans to access a wider range of public bond

markets in fiscal 1993, while limiting borrowings

from the IBRD to a modest percentage of total

borrowings. The Corporation will continue to

pursue its dual strategy of establishing liquid, well-

traded issues in the public markets while seeking to

achieve low-cost funding in the arbitrage markets,

for example, through issues under the recently

established MTN program.

83

CAPITAL INCREASE

In 1990 IFC's Board ofDirectors began to discuss thepotential long-term demandfor the Corporaton'sfinancing and

services, and the level of capital that would be required to meet that demand. After the very stronggrowth experienced

in the 1980s-an average of nearly20percentperyearin new investmentapprovals-it was clear thatIFC's existing

capital base was inadequate to meet the growing demand for assistance with private sector development.

As these discussions progressed, the private sector was being called upon to play an increasingly important role in the

economies of many developing countries. Tn Eastern Europe, centrally planned economies were being abandoned in

favor offi-ee tnarkets. In Latin Amer-ica and Asia, countries overburdened with debt began to privatize state-owned

industries, and large infrastructure proiects were entrusted to the private sector. In Africa, small-scale entrepreneurs

were being encouraged, as another means of reducing poverty on that continent.

Mindful of these challenges, IFC's Board of Directors encouraged the Corporation to maintain and increase its

support of the private sector in the 1990s. The Board concluded that special emphasis should be given to a number Jareas, including the mobilization of capital; privatization and restructuring; equity investments; domestic capital

markets; large projects in sectors in which governments are encouraging greater private sector involvement; and

support for small and mediumn-sized enterprises, especially in Africa and Eastern Europe. In addition, as described

in last year's report, steps were taken to strengthen the development impact of IFC's proiect activities and to improve

coordination forprivate sector support within the World Bank Group.

To helpfinance these activities, IFC's Board of Directors recommended tro the Board of Governors at the close of 1991

that IFC's capital be increased f-om $1.3 billion to $2.3 billion. The Governors approved the $1 billion capital increase

onl May 4, 1992, demonstrating strong membership support. Payments are scheduled to be made in annual tranches

from August 1992 to August 1996, enabling FC to expand its operations throughout the rest of the decade.

84 HNANCIAL RFiV[Pi'

International Finance Corporation

B A L A N C E S H E E T

June 30, 1992, and Jtne 30, 1991Expressed in tholosands of Uniited States dollars

1 992 1 991

ASSETS

Cash, deposits and securities-Note B $ 2,801,114 $ 2,365,467

Cash collateral invested and purchased securities not settled-Note B 364,195 173,317

Receivables and other assets-Note C 224,164 160,952

Loan and equity investments disbursed and outstanding-Note D

Loan investments 4,183,954 3,622,092

Equity investments 811,603 672,308

Total investments 4,995,557 4,294,400

Iess: Reserve against ]osses (476,904) (400,000)

4,518,653 3,894,400

Net receivables from currcncy swaps-Note C 224,538 54,106

TOIAL ASSETS $ 8,132,664 $ 6,648,242

LIABILITIES AND CAPITAL

Liabilities:

Payables and other liabilities-Note F $ 221,955 $ 152,973

Payable for cash collateral atnd purchased securities not settled 364,195 173,317

Borrowings withdrawn and outstanding-Note G

From market sources 4,123,530 3,203,176

From International Bank for Reconstruction and Development 990,017 926,507

Total borrowvings 5,113,547 4,129,683

Net payables for currency swaps-Note G 9,515 57,041

Deferred income 34,192 31,252

Total Liabilities 5,743,404 4,544,266

CAPITAL:

Capital stock, authorizcd 2,300,000 sharcs (1,300,000 shares-1991)

of $1,000 par value each-Note H

Subscribed 1,582,192 1,177,138

Less: Portion not yet paid (330,699) (32,508)

1,251,493 1,144,630

Payment on account of pendinig subscriptioni - 1,789

Retained earnings _1,137,767 957,557

Total Capital 2,389,260 2,103,976

TOTAL LIABILITIES AND CAPITAL $ 8,132,664 $ 6,648,242

See Notes to Financial Statetmienits.

85

International Finance Corporation

S T AT E M E N T O F I N C O M E

For the years ended June 30, 1992, and June 30, 1991Expressed in thousands of United States dollars

1 992 1 991

INCOME

Income from loan and equity investments:

Interest and financial fees-Note I $ 343,330 $ 348,122

Dividends and profit participations 35,455 31,623

Capital gains on equity sales 113,266 112,909

Service fees 32,192 25,389

Income from deposits and securities 156,371 181,374

Translation losses net (1,229) (3,539)

Other income (losses) 2,035 (603)

TOTAL INCOME 681,420 695,275

EXPENSES

Charges on borrowings 258,145 305,361

Administrative expenses 139,712 119,658

Provision for losses-Note D 101,043 102,097

Contributions to special programs-Note J 2,310 2,300

TOTAL EXPENSES 501,210 529,416

NET INCOME $ 180,210 $ 165,859

See NMotes to Financial Statements.

86 FINANCIAL STATEMENTS

International Finance Corporation

S TAT E M E N T O F C AS H F LO W S

For the years ended June 30, 1992, and June 30, 1991Expressed in thousands of United States dollars

1 992 1 991

CASH FLOWS FROM LOAN AND EQUITY ACTIVITIES:

Loan and equity disbursements $(1,114,144) $(1,248,753)

Loan repayments and equity redemptions 434,828 412,503

Sales of investments at cost 90,067 46,507

NET CASH USED IN INVESTING ACTIVITIES (589,249) (789,743)

CASH FLOWS FROM FINANCING ACTIVITIES:Draw down of borrowings 725,000 750,768

Repayment of borrowings (109,425) (95,289)

Capital subscriptions 106,863 72,303

NET CASH PROVIDED BY FINANCING ACTIVITIES 722,438 727,782

CASH FLOWS FROM OPERATING ACTlVILTlES:

Net income 180,210 165,859

Adjustments to reconcile net income to

net cash provided by operating activities:

Provision for losses 101,043 102,097

Translation losses 1,229 3,539

Change in accrued income on loans, deposits and securities 16,767 (18,146)

Change in payables and other liabilities 149,515 43,092

Change in receivables and otber assets (173,040) (15,141)

NET CASH PROVIDED BY OPERATING ACTIVITIES 275,724 281,300

Change in cash, deposits and securities 408,913 219,339

Effect of exchange rate changes on cash, deposits and securities 26,734 (16,770)

Net change in cash, deposits and securities 435,647 202,569

Cash, deposits and securities at beginning of year 2,365,467 2,162,898

Cash, deposits and securities at end of year $2,801,114 $2,365,467

See Notes to Financial Statements.

87

international Finance Corporation

S T AT E MENT O F CA PI T AL S TOC K A ND VO0T I NG PO0WE R

Junze 30, 1992Expressed in thousands of United States dollars

Capital St~ok t45 ,0 g Po-e Ca,Pita. steak Vieui ,,.,,o

Percent N.bc a er Percent Percet Atlee PaecotrsA-,tt t of 0 f Aeta-ttt tof Or Of

M-Srebe Paid To,n ta roet Total Member Paid Teal listra Toedl

Afhalnistan ....... 111 .01 361 .03 Leb~anon ........ . $ S 38 300 .02Albania ..... .... 736 .06 966 .06 Lesotho...... ..... 40 290 .02Algeeia ..... ..... 3,17 .25 3,427 .27 Liberia......... .031 01 533 .09Angola ..... ...... 837 .07 1,687 .08 Libya.......... . 53 303 .02Atatigna and Barbuda. _ 13 263 .02 Luxemnbourg.... .... 1,209 .10 1,459 .11

.Argentina . .... 21,55~ 1S~i?? 21,061 1.69 Madagascar .... .111.II .01 361 .033

.Australia .26,751 2.14 27.001 2.10 Mlalawi..... ...... 1,030 .08 1,280 .10Austria......... . 11,'3 .8 89 11,408 .89 Malaysia..... .0... ,604 .69 8,854 .69Bahamas, The ~.... . 142 .01 392 .03 M',aldives...... .... 9 259 .02

Bangladesab _.. ... _ 5,106 .41 5,356 .42 Mlali...... ...... 116 .61 366 .03Barbados. ... ..... 204 .02 454 .04 Mauritania..... .... 55 305 .02Belgion......... . 23,456 2.19 27,696 2.15 Maur,iu"s. ........ 941 .09 1,191 .09Belize...... . .... a 307 .02 Mexico..... ...... 13,175 1.83 15,423 1.04Benn ... ..... 67 0] 317 .82 Mongolia ... . 144 .81 394 .03Bolivia.... .... 1,075 .00 1.325 .10 Morocco..... .0... ,108 .41 5,358 .42Bulsweaea .. .. .... 64 .01 314 .02 Mozambique .... .... 182 .01 432 .03Brazil . ... ...... 22,314 1.28 22.564 1.75 Myanmar..... ..... 666 .03 916 .0.7BclgaTia. ......... 1,790 .14 2,059 .16 Natmibia ........ . 484 .03 654 .05Burkina Faso ...... . 432 .03 683 .05 Nepal ..... ...... 306 .02 336 .04Buorundi ..... ..... 100 .01 330 .03 Netherlands....... . 3 1,726 2.54 31,976 3.48Camnrotno........ . 985 .07 1,135 .09 Nsew Zealand.... .... 2,025 .16 2,27-5 .18Carada .... .... _. 45,976 3.67 46,226 3.59 Nicaragua..... .3... 39 .02 499 .64Cape rerde..... .... I 261 .02 Niger...... ...... 147 .01 397 .03CeitLral Akfrican Republic. . 67 .01 317 .02 Nigeria..... ...... 12,233 .98 12,483 .97Chile ..... .3.... ,106 .41 3,358 .42 Nos..ays......... . 9.947 .79 10,197 .79China ..... .... 1... 9 .73 9,365 .73 Omnan..... ...... 671 .05 921 .07Colombia .... .7,175. .57 7,373 .37I Pakistan..... .9,69.77 9,29.7CoDog...... .131.. 'l .01 381 .03 Panama ..... ..... 426 .03 676 .03Costa llicc .... .036.5; .04 768 .06 Papna Now Guinea.... 490 .04 740 .06C6te dh'ioine.... .... 2,003 .16 2,253 .17 Pataguay..... ..... 270 .02 520 .04Cyprus ..... ..... 1,200 .10 1,450 .11 Peru.......... . 2,301 .16 2,431 .19Czechoslovakia..... . 7,357 .60 7,967 .61 Philippines .... ..... 3,247, .26 3,497 .27Deinmark........ . 10,407 .84 10,737 .63 Poland..... ...... 4,090 .33 4,340 .34Djibouti ..... ..... 21 271 .02 Portugal..... ..... 4,700 .38 4,055 .36Dronaiica..... .... 24 3174 .02 Rumania ........ . 1,SOo .12 1,754 .14Dominicani Republic ... 671 .03 921 .07, Rsvanda..... ..... 306 .02 056 .04Ecuadtor..... ..... 1,479 .12 1,720 .13 St. Lucia ..... .4... 22 292 .62Egypt, Arab Republic oft 6,966 .56 720 .36 Saudi Arabia ... ..... 14,447 1.15 14,697- 1.14Ol Salvador.... .. it 2611 .62 Senegal..... .. l..l.lt16 .09 1,356 C

Eqoatorial Guinea .... 43 * 293 .02 Seychelles ..... ..... I3 265 .02Etbinpia ..... ..... 33 283 .02 Sierra Leone .... .... 83 .01 333 .03Piji ......... . 163 .01 412 .03 Singapore........ . 172 .01 422 .03Finland ........ . 9,072 .71 9,122 .71 Solomon Islandsa.... 19 269 .02Prance......... . 63,400 5.47 66,650 3.33 Sornalia...... ..... 83 .01 333 .03Gabon ..... ..... 931 .07 1,101 .06 Sooth Africa.... ..... 9,014 .72 9,264 .7Gambia, The ....... . 35 265 .02 Spain ..... ...... 20,926 1,67 21,176 1.64Geratany .... ..... 72,061 3.82 .73,111 3.66 Sri Lankt..... ..... 4,033 .32 4.263 .33Glhana..... ...... 2,2421 .19 2,442 .19 Sudan...... .. 1... 1I .01 361 .03

Greece......... . 3,699 .31 4,149 .2 Swazilanid..... ..... 404 .03 654 .05Grenada ..... ..... 46 296 062 Sweden..... ...... 15,191 1.21 15,441 1.20Guatemala..... .. 8. 71 .05 021 .07 Sswi-.erland ... ..... 23,502 1.86 23,752 1.0421Guiicea ..... ..... 294 .32 344 .04 Syrian Arab Republic 72 .01 322 .03Duinea-Bissau~ . 16 268 .03 Taneania....... .6892 .07 1, 147 .09Guyana ..... ..... 406 .03 056 .05 Thailand..... ..... 6,164 .49 6,434 .50Haiti...... ...... 306 .02 536 .84 Tu6u........... . 888 .06 1,038 .08Flond-tas ........ 184 .01 434 .03 Toniga......... . 19 3 69 .02Hungary 0....... 6179 .49 6,429 .50 Trinidad and Tobago. . 2,324 .19 2,574 .20Iceland...... ..... 24 274 .62 Tuttisia..... ...... 2,014 .16 2,264 .16tindia .~~- ... ... 43,976 3.57 46,226 3.59 Tuirkey..... ...... 8,221 .66 8,471 .66Indonesia .... ..... 16,131 1.29 16,30~91 1.27 Uganda ..... ..... 733 .06 965 .08lean, Islamnic Republic of. 816 .071 1,066 .06 Unttied Arab Entiirates ... 2,569 .21 2,819 .22Iraq...... ...... 147 .31 397 .03 Tndted Kingdom... .... 68,400 8.42 66,650 3.33lnelaud ..... ..... 729 .2 97-9 .08 United States ... ..... 327,703 26.19 326,033 28.47Israel ..... ...... 1.207 .10 1,437 .11 LUruguayv.... .. . 2.017 .16 3,267 .18Italy ..... ...... 45,976 3.67 46,226 3.59 Vanuatu...n ..... . 33 305 .82latnaica..... ..... 2,420 .1 ,60 21 V~~eneacla. .~. ...... 15,593 1.9 15,843 1.23Japan .... ...... 79.794 6.38 80,044 8.21 Miel Haitii.... .... 166 .01 416 .03Jordan ..... ..... 941 D8 19 .09 Western Samoa ...... 28 3 70 .82Kenra ..... .. ... 2,264 16 2,534 .20 Yemen, Republic of. . .. 404 .03 654 .05Kitibati ........ . 7 257 .2 Yugaslavia.... .. _ 4,947 .42 3,197 .40Korea, Republic of .... 9,013 a72 9,2o

3.72 Zaire ............. 2,100 .17 2,409 .19

Kuwait....... . . 4533 36 473 .37 Zambia..... ...... 1,286 .10 156 .12I no People's Dem. Rep .. 137 .147 .83 Zimbahue ....... . 1.198 .111 _ 1,446 .11

Total Jutie 30, 1992 01,201,493 100.03+ 1.287,993 100.08)+

See Notes to Financial Statements. lbtaliJune 30, 1991 91,144,620 100.03+ 1.17-9,880 100.80+

'Lcss thant.O05petrcent.

88 FIN.ANCIAL STATEMENTS + Mqsaydiffer from the sum of the individualpecrentagmesoiaotsmbecausc of roundin~g.

International Finance Corporation

N O T E S T O F I N A N C I A L S TAT E M E N T S

NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING AND RELATED POLICIESThe accounting and reporting policies of the Corporation are in conformity with generally accepted accounting

principles in the United States and with International Accounting Standards- The Corporation's assets and

liabilities are recorded principally on the historical cost basis, and the accrual method of accounting is followed,

except where otherwise noted.

Financial Statement Presentationi-Certain amounts in the pr-ior year have been reclassified to conform to the

current year's presentation.

Translation of Currencies-Assets and liabilities not denominated in United States dollars, with the exception of

disbursed equity investments, are expressed in United States dollars at the approximate exchange rates prevailing

at June 30, 1992, and June 30, 1991. Translation gains and losses are credited or charged to income. Disbursed

equitv investmcnts are expressed in United States dollars at the exchange rates which applied at the time of dis-

bursement.

Investmnents-Investment commitments are recorded when agreements are signed by the Corporation and are re-

flected as assets wvhen disbursed. Loan investments are generally carried at the principal amounts outstanding.

Equity investments are carried at cost. It is the Corporation's practice to obtain collateral security such as, but

not limited to, mortgages and third party guarantees.

Reserve against Losses-The reserve against losses represents managenment's judgment 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 a

provision for losscs 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 con-

vertible currencies. Gains on the sale 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 management anticipates that collection of inter-

est will occur in the near future. Any interest accrued on a loan placed in nonaccrual status is reversed out of cur-

rent income and is thereafter recognized as income only when actual payment is received. Interest not previously

recognized, but capitalized as part of a debt restructuring, 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 Securlities-The Corporation's liquid assets are segregated into two pools wvhich are valued at either

cost or market. Both pools comprise instruments issued by government agencies and financial institutions and

are recorded on a trade date basis. Investments valued at cost arc usually hcld to maturity. lnvestments valued at

market are invested according to the Corporation's credit risk and duration policies. Gains and losses on sales of

securities valued at cost, as measured by the difference between cost on a last-in, first-out basis and proceeds of

the sales, are recorded as an element of income from deposits and securities. The Corporation classifies the cash,

deposits and securities portfolio as an element of liquidity in the Statement of Cash Flows, due to their nature

and the Corporation's policies governing the level and use of such investments.

QJT Balantce Sheet Financial Instrumenits-In the normal course of business, the Corporation is a party to off-

balance shcet financial instruments including currency and interest rate swap obligations on its own behalf and

89

for clients, guarantees for third parties, futures contracts, short sales and forward rate agreements. The Corpo-

ration follows the same credit policies in considering conditional obligations as it does for balance sheet instru-

ments. Associated income or expenses on swaps and forward agreements are recognized over the life of the

instrument. Gains and losses on futures contracts and short sales are recognized as an element of income from

deposits and securities.

Where it acts as a swap intermediary, the Corporation minimizes its exposure to credit risk by performing credit

reviews on the swap clients and minimizes its exposure to currency and interest rate risks by entering into off-

setting swap positions with market counterparties. Forward rate agreements may be executed as part of the Cor-

poration's overall management strategy for its securities portfolio.

NOTE B-CASH, DEPOSITS AND OTHER SECURITIES

Cash, deposits and securities comprise the following:

($ thousands)

Z992 199P

Cash $ 15,444 $ 26,369

Time deposits and other obligations

of banks and financial institutions 1,949,360 1,748,093

Government securities 836,310 591,005

Total cash, deposits and securities $ 2,801,114 $ 2,365,467

At June 30, 1992, 50% (44.0%-1991) of the deposit and securities portfolio was valued at market. The remain-

der of the portfolio, which is usually held to maturity, comprises mostly time deposit instruments and govern-

ment securities having a duration of less than one year and is valued at cost which approximates market. T he

deposits and securities portfolio is denominated primarily in United States dollars with instruments in nondollar

currencies representing 7.6% of the portfolio at June 30, 1992 (7.1%-1991). At June 30, 1992 and 1991, cash

collateral invested and purchased securities not settled were valued at market, which approximates cost, and were

denominated in United States dollars.

At June 30, 1992, the Corporation had gross receivables from covered forward agreements at a book value of $664

million ($452 million-199 1) and gross payables from covered forward agreements at a book value of $704 mil-

lion ($446 million-1991). The Corporation's exposure to credit loss in the event of nonperformance by its

counterparties was $1.0 million at June 30, 1992 ($8.2 million-1991). At June 30,1992, the Corporation also

had futures contracts with a total contract value of $186 million (nil-1991) with minimal exposure to credit

loss. The Corporation is highly selective in its choice of counterparties and does not consider nonperformance

to represent a significant risk.

The Corporation has entered into short sales of securities not held in the Corporation's portfolio at the time of

the sale with a total contractvalue of $55.7 million at June 30, 1992 (nil-1991). The Corporation bears the risk

that the market value of the securities will move adversely between the time of the sale and the time the securities

must be delivered.

The Corporation also has entered into interest rate swap agreements on liquid assets with respect to notional

principal amounts of $82 million at June 30,1992 (nil-1991) under which it is obligated to make interest pay-

ments on a fixed rate basis in exchange for receiving variable rate payments. The differential to be paid or re-

ceived as interest rates change is recognized over the life of the agreement. Exposure to loss in the event of

nonperformance by countcrparties to these swap agreements is considered insignificant.

90 NOTFS TO FINANCIAL STATEMENTS

NOTE C-RECEIVABLES AND OTHER ASSETS

Receivables and other assets of the Corporation are summarized below:

($ thousan2ds)

1 992 1 991

Receivable from securities $ 56,693 $ 2,203

Accrued income on deposits and securities 19,183 25,814

Receivable from purchasers of loan and equity investments 19,232 15,757

Accrued income on loans 71,584 72,722

Deferred charges 19,953 17,886

Other assets 37,519 26,570

Total receivables and other assets $224,164 $160,952

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 yet signed as investment

commitments, and commitments signed but on which disbursements have not yet commenced are summarized

as follows:

($ thousands)

1992 1991

Investments approved but not committed

Loans $ 869,700 $ 735,830

Equities 176,590 146,180

1,046,290 882,010

Investments committed but not disbursed

Loans 1,239,727 1,042,738

Equities 187,385 157,226

1,427,112 1,199,964

Total approved but not disbursed $2,473,402 $2,081,974

The Corporation has also issued guarantees on behalf of clients totaling $120 million at June 30, 1992 ($40 mil-

lion-1991) of which $25 million ($30 million-1991) is outstanding.

At June 30, 1992, 46% of the disbursed loan portfolio consisted of fixed rate loans, while the remaining loans

were at variable rates. The currency composition of loans disbursed and outstanding at June 30, 1992, is sum-

marized below ($ thousands):

U.S. dollars S3,140,138 European Currency Unit $22,944

Deutsche mark 627,316 Netherlands guilders 11,961

Swiss francs 195,857 Pounds sterling 6,598

Japanese yen 89,871 Other currencies 1,065

French francs 88,204

91

Loans disbursed and outstanding in all currencies are repayable during the years ending June 30, 1993, through

June 30, 1997, and thereafter as follows:

(S millions)

1993 1994 1995 1996 1997 Thereafter

Loans disbursed and outstanding $693.8 $623.3 $628.0 $579.0 $541.7 $1,118.2

Loans on which the accrual of interest has been discontinued amounted to $282 million at June 30, 1992 ($207

million-1991). Interest income not recognized during the year ended June 30, 1992, on nonaccruing loans to-

talled $29.7 million ($19.3 million-1991). During the year ended June 30, 1992, S 12.6 million ($9.8 million-

1991) of interest on loans in nonaccrual status related to current and prior years was collected.

Changes in the reserve against losses are summarized below:

(S thousands)

1992 1991

Balance at beginning of year $400,000 $319,300

Investments written off (26,764) (22,892)

Investments recovered 2,625 1,495

Provision for losses 101,043 102,097

Balance at end of year $476,904 $400,000

At June 30, 1992, the Corporation was acting as an intermediary for clients in currency swap transactions having

a face value of $148 million ($134 million-1991). Exposure to credit loss in the event of nonpcrformance by

counterparties to these swap agreements is considered insignificant.

NOTE E-PARTICIPATIONS

The Corporation mobilizes funds from commercial banks and other financial institutions through loan partici-

pations, which are sold without recourse to the Corporation, but are administered and serviced on behalf of the

participants. DLurinig Lhe year ended June 30, 1992, the Corporation called and disbursed $710 million ($428 mil-

lion-1991) of participants' funds. At June 30, 1992, the undisbursed participants' commitments were $672 mil-

lion ($502 million-1991). In addition, at June 30, 1992, the Corporation has arranged to place with participants

$1,342 million ($1,054 million-1991) of investments approved by the Board of Directors but not yet signed as,

commitments.

NOTE F-PAYABLES AND OTHER LIABILITIES

Payables and other liabilities of the Corporation are summarized below:

($ tho asands)

1992 1991

Accounts payable and accrued expenses $ 39,792 $ 35,547

Accrued charges on borrowings 79,466 84,171

Securities obligation 56,525

Other liabilities 46,172 33,255Total payables and other liabilities $221,955 S152,973

92 NOTES TO FINANCIAL STATEMENTS

NOTE G-BORROWINGS

The Corporation's borrowings outstanding from market sources and currency swaps (at June 30, 1992) are sum-

marized below:

Market Borrowings Currency Swaps Net Currency

Principal amoutnrt Weighted average Payable (Receivable) Obligations($ millions) cost ($ millionls) ($ millions)

1992 1991 1992 1991 1992 1991 1992 1991

U.S. dollars $1,870 $1,455 8.58% S.700% $1,711 $1,468 $3,581 $2,923

Deutsche mark 185 162 6.52% 6.52% 38 42 223 204

Japanese yen 687 623 5.83% 6.25% (687) (623) - -

Pounds sterling 76 65 9.130/a 9.13% (76) (65) - -

Swiss francs 72 64 4.75% 4.75% 15 1 87 65

European Currency Unit 73 63 6.63% 6.63% (73) (63) -

Australian dollars 45 46 12.50% 12 .50% (45) (46) -

Netherlands guilders 30 26 6.64% 6.64% (12) (12) 18 14

Spanish pesetas 682 499 12.15% 12.46% (682) (499) - -

Finniish markkaa 60 59 9.63% 9.63% (60) (59) - -

Swedish kronor 180 77 10.38% 10.50% (180) (77) - -

Portuguese escudos 164 64 13.79% 15.75% (164) (64) - -

$4,124 $3,203 $ (215) $ 3 $3,909 $3,206

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 in-

terests) without extendinig equivalent security to the holders of suclh borrowinigs.

'the $215 million net receivable on currency swaps at June 30, 1992, shown in the above table, consists of

swap transactions in net receivable positions of S225 million ($54 million-1991) and swap transactions in net

payable positions of $10 million ($57 million-1991); these amounts result from exchange rate movements

occurring subsequent to the date of the swap transactions. At June 30, 1992, the Corporation had gross receiv-

ables from borrowing-related currency swaps at a book value of$2,139 million ($1,549 millioni-1991) and gross

payables from borrowing-related currency swaps at a book value of $1,924 million ($1,552 million-1991). As

a result of the currency and interest rate swap transactions, the weighted average cost of market borrowings may

differ from the weighted average rates reflected in the table.

At June 30, 1992, the Corporation had gross receivables from asset/liability management currency swaps at a

book value of $100 million ($60 million-1991) and gross payables from asset/liability management currency

swaps at a book value of $113 million ($59 million-1991).

93

Borrowings outstanding from the International Bank for Reconstruction and Development (IBRD) are summa-

rized below:

IBRD Borrowings

Principal amount Weighted average

($ millions) cost

1992 1991 1992 1991

U.S. dollars $131 $151 8.61% 8.42%

Deutsche mark 469 438 7.42% 7.52%

Swiss francs 176 154 5.84% 5.92%

Japanese yen 98 96 6.17% 6.18%

Other currencies 116 88 9.35% 9.34%

$990 $927

In addition, undrawn balances on committed borrowings from the IBRD were $246 million ($248 million-

199 1). A commitment fee is payable on the undrawn balanccs of borrowings at 3/4 of 1% per annum. For the

year ended June 30, 1992, such commitment fees aggregated $1.9 million ($1.7 million-1991) and are included

in the wveighted average cost of borrowings.

The Corporation has also entered into interest rate swap agreements with respect to notional principal amounts

of$ 1,705 million ($1,374 million-1991) under which it is obligated to make interest payments on a variable rate

basis, averaging 4.27% at June 30,1992, (6.46%-]991) in exchange for receiving fixed rate payments, averaging

8.39% at June 30, 1992, (8.67%-1991). The differential to be paid or received as interest rates change is recog-

nized over the life of the agreement.

The Corporation could be exposed to credit loss in the event of nonperformance by its counterparties in the

aggregate amount of $274 million at June 30, 1992, ($52 million-1991) for outstanding currency swaps, and

$102 million ($29 million-1991) for outstanding interest rate swaps. These amounts represent the maximum

estimated replacement cost, at market rates, of those outstanding swaps in a gain position. However, the Corpo-

ration is highly selective in its choice of counterparties and does not consider nonperformance to represent a

significant risk.

The principal amounts repayable on borrowings outstanding in all currencies during the years ending June 30,

1993, through June 30, 1997, and thereafter are as follows:

($ millions)

1993 1994 1995 1996 1997 Thereafter

Borrowings from market sources $471.7 $47L.0 $739.2 $549.8 $1,429.5 $462.3

Borrowings from IBRD 129.9 177.7 142.5 133.3 127.4 279.2

$601.6 $648.7 $881.7 $683.1 $1,556.9 $741.5

NOTE H-CAPITAL STOCK

On May 4, 1992, the Board of Governors approved a resolution increasing the authorized capital of the Corpo-ration from $1,300,000,000 to $2,300,000,000. The resolution allocated $964,914,000 for subscriptions by mem-

ber countries during the subscription period ending February 1, 1993. Members may elect to pay subscriptions

in full or in installments payable from August 1, 1992, to August 1, 1996.

94 NOTES TO EINANCIAL STAIEMENTS

NOTE I-INTEREST AND FINANCIAL FEES

Interest and financial fees comprise the following:

($ thousands)

1 992 1 991

Interest income $322,202 $331,922

Commitment fees 7,405 6,817

Other financial fees 13,723 9,383

Total interest and financial fees 5343,330 $348,122

NOTE J-CONTRIBUTIONS TO SPECIAL PROGRAMS

From time to time, the Board of Directors approves recommendations under which the Corporation contributes

to special programs, which presently comprise the Foreign Investment Advisory Service (FIAS), the Africa

Project Development Facility (APDF), the South Pacific Project Facility (SPPF), and the Polish Business Adviso-

ry Service (PBAS). During the year ended June 30, 1992, the Corporation contributed $410,000 to FIAS

($400,000-1991), $1.2 million to APDF ($1.2 million-1991), $200,000 to SPPF ($200,000-1991), and

$500,000 to PBAS ($500,000-1991).

NOTE K-OTHER MATTERS

StaffRetirement Plan-The International Bank for Reconstruction and Development (IBRD) has a defined

benefit retirement Plan covering substantially 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 com-

pensation, with the staff contributing a fixed percentage of pensionable remuneration and the Corporation, the

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 Cor-

poration, the IBRD, and MIGA and can be used only for the benefit of the participants in the Plan and their ben-

eficiaries, until all liabilities to them have been paid or provided for. The total expense allocated to the

Corporation for the year ended June 30, 1992, was $12.0 million ($8.3 million-1991).

Other Post-EmploymentBenefits-The IBRD also provides certain life insurance and medical benefits to substan-

tially all retired staff of the Corporation, the IBRD, and MIGA and their spouses through contributions to a Re-

tired Staff Benefits Plan (RSBP). Commencing in 1990, the Corporation, the IBRD, and MIGA began accruing

and funding, on an actuarially determined basis, the expected future cost of providing such benefits for future

retirees. All contributions to the RSBP and all other assets and income held for purposes of the RSBP are held

separately from the other assets and income of the Corporation, the IBRD, and MIGA and can be used only for

the benefit of the participants in the RSBP and their beneficiaries, until all liabilities to them have been paid or

provided for. The total expense allocated to the Corporation for the year ended June 30, 1992, was $1.6 million

($0.5 million-1991).

Land Acquisition and Building Construction-On July 22, 1992, the Corporation purchased land for $82 million

to construct a building for its own use.

Service and Support Payments-The Corporation obtains some administrative and overhead services from the

IBRD in those areas where common services can be efficiently provided by the 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 the IBRD

based on negotiated fees, direct chargeback, and allocated charges where chargeback is not feasible. Expenses

allocated to the Corporation for the year ended June 30, 1992, totalled $21.0 million ($20.0 million-1991).

95

International Finance Corporation

R E P O R T O F I N D E P F AN D E N T A C C O U N TA N T S

Price Waterhouse The Hague Tokyo(International Firm) London Washilngton

New York

Price Waterhouse 0

July30, 1992

President and Board of Governors

International Finance Corporation

In our opinion, the financial statements appearing on pages 85 through 95 of this Report present fairly, in all

material respects, in terms of UInited States dollars, the financial position oftthe Internatioinal Finance Corpora-

tion at June 30, 1992 and 1991, and the results of its operations and its cash flows for the years then ended in

conformiiity with generally accepted accounting principles in the United States and with Internationial Account-

ing Standards. These financial statements are the responsibility of management of the International Finance

Corporation; our responsibility is to express an opinion oni these financial statements based on our audits. Wve

conducted our audits of these statements in accordance with generally accepted auditing stanctards, including

International Auditing Guidelines, which require that we plan and perform the audit to obtain reasonable assLur-

ance 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 account-

ing principles used and significant estimates made by management, and evaluating the overall financial state-

ment presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.

96 REPORT OF INDEPFNDENT ACCOUNTANTS

T fS E P O R T F 0 L I 0

IFC's committed portfolio at the end of fiscal 1992 disbursements $185 million. The disbursed loan

totaled $6.4 billion and was composed of loans and portfolio grew by 16 percent to $4.2 billion, and the

equity investments for 703 companies, compared disbursed equity portfolio grew by 21 percent to

with 618 companies at the end of the previous fiscal $812 million. IFC also made disbursements totaling

year. Of the companies currently in IFC's portfolio, $710 million on behalf of financial institutions

692 are located in 82 countries, 8 are financial insti- participating in IFC's syndicated loans, which are

tutions whose operations are regional, and 3 are administered by IFC. At the end of the fiscal vear,

financial institutions or investment finds whose loans managed by IFC for participants totaled

scope is global. The breakdown of IFC's portfolio $2.3 billion.

at June 30, 1992, is showni in the following table:

PORTFOLIO MANAGEMENT(millions of U.S. dollars) The quality of IFC's portfolio at year-end reflects

the increased attention given to supervision over the

Total committed portfolio for 1FC's account 6,423 past eight years. Some of the improvement is due to

Loans 5,424 specific procedural changes approved by the Board

Equity 999 of Directors in recent years, such as streamlined

Committed portfolio held for others 2,295 approval for equity sales and the establishment of

Total committed portfolio 8,718 the Special Operations Unit to handle particularly

Total disbursed portfolio 4,996 difficult restructurings. Portfolio supervision has

Total undisbursed portfolio 1,427 been improved through the implementation of im-

proved management information systems.

COMMITMENTS

The total committed portfolio increased by 17 per- The key indicators of portfolio performance, such as

cent to $6.4 billion in fiscal 1992, from $5.5 billion the percentage of loans no longer accruing interest,

at the close of fiscal 1991. New commitments for remain satisfactory overall. There are certain regions

the year totaled $1.3 billion, the same as in fiscal and sectors where performance is below average.

1991. After taking into account new commitments, These areas will continue to receive increased super-

repayments, sales, cancellations, and write-offs, vision until problems are satisfactorily resolved.

the net increase in the committed portfolio was

$1 billion. Loans and guarantces increased by

$759 million, and equity by $169 million. Loan

repayments during the year came to $435 million,

and equity investments amounting to $58 million

were sold. During fiscal 1992, 26 companies were

removed from the portfolio because they had paid

off their loans or IFC had sold its equities or written

off its loans or investments.

New commitments were concentrated in Latin

America (41 percent). The sectors with the greatest

concentration of new investments were manufac-

turing, with 38 percent, and capital markets, with

23 perccnt. Commitmcnts were madc in two coun-

tries where IFC had not previously invested, Benin

and Czechoslovakia.

DISBURSEMENTS

Total disbursements in fiscal 1992 came to $1.1 bil-

lion, a decrease of It percent from fiscal 1991.

Loan disbursements totaled $930 million, equity

97

PORTFOLIO COMMITTED PORTFOLIO BY SECTOR(in millions of U.S. dollars) AT JUNE 30, 1992

9,000 "Mnillions of U.S. dollars)Capital markets, Cement anddevelopmentfinance, construction materials

8,000 financial servi'ces $7

$1,416 Eeg

7,000 Eeg7,000 Tourism, _$325other services

6,000 $94Food andagiusiness

D _ - 5~~~~~~~~~~~~~~~~~~3395,000 _339

4,000 pulp,andpaper

3,000 $439

_ _ _ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Textiles2,000 $482

1,00 b _Mining, nonferrous1,000 _ _ _ metals, iron, steel

General $563

0 manufacturing,automotive industry, industrial Chemicals,

1988 1989 1990 1991 1992 equipment petrochemicals, fertilizers$874 $765

i IFC * Held for others Total $6,423

98 1HEEPORTFOLIO

International Finance Corporation

INV E ST M E N T PO RT F O LI O SUM MARY

June 30, 1992Expressed in millions of United States dollars

Tune 30, 1992 Juine 30, 1991

Equity Total Loans Equity TotalLoansLoans (at cost) andEquity Loans (atrost) andEquity

IFC PORTFOLIO

Total 5,423.7 999.0 6,422.7 4,664.8 829.5 5,494.4

Undisbursed balances 1,239.7 187.4 1,427.1 1,042.7 157.2 1,200.0

Disbursed balances 4,184.0 811.6 4,995.6 3,622.1 672.3 4,294.4

LOANS AND EQUITY

HELD BY IFC FOR PARTICIPANTS

Total 2,294.3 0.4 2,294.6 1,513.3 0.4 1,513.7

Undisbursed balances 672.4 - 672.4 501.9 - 501.9

Disbursed balances 1,621.9 0.4 1,622.2 1,011.4 0.4 1,011.8

TOTAI. IFC PORTFOLIO

AND LOANS AND EQUITY

HELD FOR PARTICIPANTS

Total 7,718.0 999.3 8,717.3 6,178.2 829.9 7,008.1

Undisbursedbalances 1,912.1 187.4 2,099.5 1,544.7 157.2 1,701.9

Disbursed balances 5,805.8 812.0 6,617.8 4,633.5 672.7 5,306.2

99

International Finance Corporation

I N V E S T M E N T P O R T F O L I1O

June 30, 1992Expressed in millions of United States dollars Orngin[al ItnsRldf theCrporation

Fiscayears cozmitrnnnns (incldingu.zdssbus dbalxsas)in vhikhcommitmenrs Total Tora oquiy Torolloars

ssountrlreonorotheretrela,noblzgor Sectr were macL 1FC syndiations lwns (atcost) anuleqwty

SUB-SAHARAN AFRICA

Benin

Societe Beninoise de P&ehe Food and agribusiness FY92 0.3 - 0.2 0.1 0.3

0.2 0.1 0.3

Botswana

Botswana Development Corporation Limited Development financing FY79, 85 0.6 - - 0.2 0.2

Northern Textile Mills (Botswana) (PTY) Limited Textiles FY91 0.4 - 0.4 - 0.4

ULC (Proprietary) Limited Capital markets FY90 0.4 - - 0.4 0.4

0.4 0.7 1.0

Burundi

Verreries du Burundi, S.A.R.L. General manufacturing FY81, 87 5.7 - - 0.5 0.5

0.5 0.5

Cameroon

Alucam - Compagnie Camerounaise

de l'Aluminium Pechincy-Ugine Nonferrous metals FY79 7.9 - - 0.9 0.9

Cotonniere Industrielle du Cameroun (CICAM) Textiles FY86 2.9 - 3.9 - 3.9

Pecten Cameroon Company Energy FY92 30.0 30.0 30.0 - 30.0

Prestige Bottding Company General manufacturing FY88 3.0 - 3.2 0.3 3.5

Societe Camerounaise de Minoteries Food and agribusiness FY81 1.3 - 0.1 - 0.1

Societe des Palmeraies de la Ferme Suisse, S.A. Food and agribusiness FY85 1.6 - 0.6 0.6 1.1

Societe des Plantations Nouvlles du Penja Food and agribusiness FY88 2.3 -- 2.0 0.3 2.3

39.7 2.2 41.9

Congo

Congolaise des Bois Impregnes, S.A. Timber, pulp, and paper FY87 2.1 - 2.2 - 2.2

Congolaise lndustrielle des Bois (C.I.B.), S.A. Timber, pulp, and paper FY85, 86 2.1 - 0.2 0.5 0.72.3 0.5 2.9

Cote d'lvoireEtablissements R. Gonfreville, S.A. Textiles FY77, 87 9.2 - 7.5 0.9 8.4Industrial Promotion Services (Cote d'Ivoire) S.A. Capital markets FY88 0.8 - - 0.8 0.8Omnium Chimique et Cosmetique (COSMIVOIRE) Food and agribusiness FY87 2.1 - 1.0 - 1.0Omnium de Transformations Alimentaires S.A. Food and agribusiness FY90 0.8 - 0.7 0.2 0.9

Pechazur, S.A.R.L. Food auid agribusisess FY90 0.5 - 0.3 - 0.3Plantivoire Food and agribusiness FY92 1.1 - 1.1 - 1.1

Societe des Industries Alimentaires et Laitieres

(SIALIM) Food and agribusiness FY88, 90 5.9 - 4.7 0.9 5.5

Transformation Industrielle deBois (Tribois S.A.) Timber, pulp, and paper FY91 0.6 - 0.4 0.2 0.6

15.8 3.0 18.8

Ethiopia

Red Sea Petroleum Exploration Program Energy FY89 7.8 - - 7.8 7.8

- 7.8 7.8

GabonComspagnie Mini&re de l'Ogoouc Mining FY89, 92 36.0 - 30.2 - 30.2

Elf Gabon Energy FY90 10.0 - 6.0 - 6.0

Shell Gabon S.A. Energy FY89 50.0 110.0 30.0 - 30.0

66.2 - 66.2

Gambia, The

Kousibo Beacl Hotel Limllited Tourism FY84, 90 2.8 - 4.7 1.9 6.6

Makumbaya Farms Limited Food and agribusiness FY91 0.9 - 0.6 0.4 0.9

Pelican Seafood (Gambia) Limited Food and agribusiness FY91 1.1 - 1.1 1.1

6.3 2.2 8.6

100 INVESTMENT PORTFOLIO

International Finance Corporation

I NV E ST M EN T P O RT F O L I O

June30, 1992Expressed in nlillion1s of United States dollars Oragtia Invac/saidfoar dicpora

Fiscalyars coninento (incudsigundisbucrsedbalances)

commitments Toed Total Eqwtv Toas learsCountrys region oreth/erasea,andobhgar Sector et made IFC S addtsons e Foans (atzrost) andequi'

Ghana

Alugan Company, Limited Nonferrous metals FY90 0.3 - 0.3 - 0.3Appiah Menka Complex Limited Chemicals and

petrochemicals FY91 0.9 - 0.9 - 0.9

Ashanti Goldfields Corporation (Ghana) Limited 1Mining FY85, 90 57.5 62.5 51.9 - 51.9Billiton Bogosu Gold Limited Mining FY88, 90, 91 21.2 29.0 19.4 1.9 21.2Continental Acceptances Limited Capital markets FY90, 91 3.9 - 3.0 0.9 3.9Dimples Inn Limited Tourism FY91 0.2 - 0.2 - 0.2Ghana Aluminium Products Limited Nonferrous metals FY92 0.4 - - 0.4 0.4Ghanaian-Australian Goldfields Limited Mining FY90,92 21.0 18.5 18.0 3.0 21.0Hotel Investments (Ghana) Limited Tourism FY91 4.2 - 4.2 - 4.2Packrite Cartons and Packaging Industries Ltd. Timber, pulp, and paper FY92 0.6 - 0.6 - 0.6Plastic Laminates (GH) Limited Industrial equipment

and machinery FY91 0.6 - 0.6 - 0.6

Securities Discount Company Capital markets FY91 0.2 - - 0.2 0.2Wahome Steel Limited Iron and steel FY90 3.2 - 3.2 - 3.2

102.2 6.4 108.7

GuineaBanque Internationale pour le Commerce

et l'Industrie de la Guinee Capital markets FY87 1.0 - - 1.0 1.0Societ6 Aurifere de Guinee S.A. Mining FY88 7.5 - 6.8 - 6.8

6.8 1.0 7.8

Guinea-BissauAnetibene Petroleum Exploration Program Energy FY90 5.9 - - 4.0 4.0

Bissau Pesca Limited Food and agribusiness FY92 0.2 - - 0.2 0.2

- 4.2 4.2

Kenya

AUlpack Industries Limited** Timber, pulp, and paper FY92 - - - 0.3 0.3

Development Finance Company of Kenya Limited Development financing FY80, 84 6.4 - 0.7 1.3 2.1

Diamond Trust of Kenya Limited Capital markets FY82 0.8 - - 0.8 0.8Equatorial Beach Properties Linmited Tourism FY86 3.7 - 6.1 - 6.1Frigoken Ltd.'* Food and agribusiness FY90 - - - 0.1 0.1

Industrial Promotion Services (Kenya) Limited Capital markets FY82 0.5 - - 0.5 0.5Industrial Promotion Serviccs (Kenya) Limited, Development financing FY87 1.2 - - 0.7 0.7Integrated Wood Complex Limited Timber, pulp, and paper FY92 0.4 - 0.4 - 0.4Leather Industries of Kenya Limited General manufacturing FY84, 92 1.9 - 0.2 0.6 0.8Malaa Industries Limited Food and agribusiness FY91 0.7 - 0.5 0.2 0.7Novaskins Tannery Ltd."s General manufacturing FY91 - - - 0.1 0.1Panafrican Paper Mills (E.A.) Ltd. Timber, pulp, anid paper FY70, 74,77,79,

81,88,90 35.7 - 15.7 4.5 20.2

Premier Foods Industries Ltd.** Food and agribusiness FY89 - - - 0.1 0.1

Premier Refrigeration and Engineering Ltd.> Industrial services FY89 - - - 0.1 0.1

Rift Valley Tetiles Limited Textiles FY76 8.1 1.0 2.8 - 2.8

Tourism Promotion Services (Kenya) LLd. Tourism FY72 1.7 0.8 - t t

Ukulima Tools Ltd.** Industrial equipment

and machinery FY88, 92 - - - 0.1 0.1

26.5 9.5 36.0

Lesotho

Upper Qeme Block & Concrete Cement and

Products Pty Limited construction materials FY91 0.1 - 0.1 - 0.1

0.1 - 0.1

101

International Finance Corporation

I N V E S T M E N T P O RT F O L I O

June 30, 1992Expressed in millions of United States dollars o0gal Immnesneselfr tie CoQporadon

FL vlys cmln enY (ladungndtsburi d balances)in 6which

acmnes Total Total Equiv Total lownsCoumntr.s region orotherareA and obligor Setor were nade IFC nd&lawns Loams (atcost) andeiwUp

LiberiaLiberian Bank for Devclopment and Investment Development financing FY66,77,84 0.1 - - 0.1 0.1Liberian Timber and Plywood Operation Company Timber, pulp, and paper FY88 8.5 - 7.2 - 7.2

7.2 0.1 7.3

MadagascarBNE-Credit Lyonnais Madagascar, S.A. Capital markets FY92 2.6 - - 2.6 2.6Financiere d'Investissement ARO Capital markets FY90, 91 0.5 - - 0.5 0.5La Cotonniere d'Antsirabe (COTONA) S.A. Textiles FY86, 90 11.1 - 10.4 0.2 10.6

Les Pecheries de Nossi Be, S.A. Food and agribusiness FY84, 90 6.3 - 4.9 0.2 5.1Socidte Textile de Majunga S.A. Textiles FY77, 87 15.0 - 3.3 0.3 3.7

18.6 3.8 22.4

MalawiDwangwa Sugar Corporation Limited Food and agribusiness FY77 11.3 - 3.4 - 3.4Ethanol Company Limited Chemicals and

petrochemicals FY81, 82 2.5 - - 0.2 0.2Investment and Development Bank (of Malawi Limited Development financing FY79 0.6 - - 0.6 0.6The Leasing and Finance Company of Malawi, Limnited Capital markets FY86, 90 0.2 - - 0.2 0.2Viphya Plywoods and Allied Industries Limited Timber, pulp, and paper FY87 4.4 - 4.2 0.5 4.7

7.6 1.5 9.1

MaliLabo-Mali Industrial services FY92 0.1 - 0.1 - 0.1

0.1 - 0.1

MauritiusBig Game Fishing Company Ltd. Tourism FY92 0.2 - 0.2 - 0.2Consolidated Steel Ltd. Iron and steel FY92 0.7 - 0.5 0.2 0.7Dinarobin Inns and Motels Ltd. Tourism FY71, 92 6.0 0.1 6.0 - 6.0General Haulage Limited Industrial services FY91 0.1 - 0.1 t 0.1Mauritius Commercial Bank Limited' Capital markets FY92 10.0 - 10.0 - 10.0Saxon Management Limited and Saxon

Properties Limited Tourism FY90 3.1 - 2.3 1.0 3.3Socota Textile MiBls Ltd. Textiles FY87 6.0 - 3.9 1.0 4.9Textile Industries Limited Textiles FY90 3.1 - 2.9 - 2.9

25.9 2.2 28.1

MozambiqueCompanhia Agro-Industrial Lonrho-Mocambique

Limnitada Food and agribusiness FY87 2.5 - 1.0 - 1.01.0 - 1.0

NigeriaAfcott Nigeria Limited Food and agribusiness FY90 4.5 - 4.5 - 4.5Agro-Technical Services Nigeria Limited Food and agribusiness FY91 1.0 - 1.0 - 1.0Arewa Textiles Limited Textiles FY64, 67, 92 6.5 - 5.9 0.6 6.4Dunlop Nigeria PLC Automotive/accessories FY88 12.5 - 8.8 - 8.8IkejaHotel PLC Tourism FY81,85,88 11.0 - 2.0 1.5 3,4Mobil Producing Nigeria Unlimited Energy FY91 75.0 95.0 75.0 - 75.0Nigerian Textile Mills PLC Textiles FY80, 87 6.9 - 0.6 - 0.6Nigerian-American Merchant Bank limited Capital markets FY91 10.0 - 9.3 - 9.3Stark Industries Limited Timber, pulp, and paper FY91 0.3 - 0.3 - 0.3Tiger Battery Company (Nigeria) Limited General manufacturing FY85, 90 4.4 2.6 2.0 - 2.0Vicoda Limited Textiles FY91 0.1 - 0.1 - 0.1Vincent Standard Steel Industries, Nigeria Limited Iron and steel FY92 0.8 - 0.8 - 0.8

110.1 2.0 112.1

102 INVESTMENT PORTFOLIO

International Finance Corporation

I N V E S T M E N T P O R T F O L I O

June 30, 1992Expressed in millions of United States dollars Ojginal Imrmrshelforthe Gpoawn

Fio vars connitrnit (Itnciung unisbrsed balancs)inswhcharmntmosns Total Totl &7uit tatllans

Co inity, reffim or o&ra aren, and obligor Satlor tvere made ITC syndicaons LomS (atrosr) and equay

RwandaSocite Rwandaise des Allumettes (SORWAL) S.A.R.L. Timber, pulp, and paper FY88 0.2 - - 0.2 0.2

- 0.2 0.2

SenegalAfricamer S.A. Food and agribusiness FY90 3.5 - 3.9 - 3.9African Seafood S.A. Food and agribusiness FY86 4.3 - 3.2 0.6 3.8Banque de l'Habitat du Senegal S.A. Capital markets FY80 0.5 - - 0.5 0.5Industries Chimiques du Senegal, S.A. Fertilizers FY82, 88 14.8 - 10.8 - 10.8

17.9 1.1 19.0

Sierra LeoneSierra Cement Manufacturing Company, Limited Cement and

construction materials FY80 2.1 - 2.1 - 2.1Sierra Rutile Limited Mining FY92 15.0 - 15.0 - 15.0

17.1 - 17.1

SomaliaSomali Bag Company Limited General manufiacturing FY85 1.1 - 0.1 - 0.1

0.1 - 0.1

SwazilandNatex Swaziland Limited Textiles FY88 6.3 - 5.0 1.8 6.8Spintex Holdings Swaziland Textiles FY90 3.7 - - 3.7 3.7Swaziland Industrial Development Company Limited Development financing FY87 3.0 - 2.3 0.7 3.0The National Textile Corporation of Swaziland Limited Textiles FY85 1.5 - 1.2 - 1.2The Roval Swaziland Sugar Corporation Limited Food and agribusiness FY78, 86 10.0 - - 0.5 0.5

8.5 6.7 15.1

TanzaniaAmboni Limited Food and agribusiness FY85 2.3 0.7 2.4 - 2.4Highland Soap and Allied Products Limited General manufacturing FY78 1.7 - 0.3 - 0.3Mufindi Tea Company Limited Fond and agribusiness FY91 2.8 - 2.8 - 2.8Tanganyika Sisal Spinning Company Limited Food and agribusiness FY90 2.0 2.0 - 2.0

7.5 - 7.5

TogoDucros - Togo, S.A. Food and agribusiness FY88 1.4 - 1.2 - 1.2Soci6et Togolaise de Produits Marins - STPM Food and agribusiness FY92 0.3 - 0.2 0.1 0.3Togotex International S.A. Textiles FY90 1.7 - - 1.7 1.7

1.5 1.8 3.2

UgandaDevelopment Finance Company of Uganda Limited Development financing FY85 0.4 - - 0.4 0.4Sugar Corporation of Uganda Limited Food and agribusiness FY84 8.0 - 6.0 - 6.0The Toro and Mityana Tea Company Limited Food and agribusiness FY84 0.3 0.5 0.5 - 0.5Uganda Tea Corporation Limited Food and agribusiness FY85 2.8 3.4 - 3.4

9.9 0.4 10.3

ZaireGranxds H6tels du Zaire, S.Z.A.RL. Tourism FY85 15.0 - 8.2 - 8.2Societe de T6lecommunications Cellulaires Industrial equipment

(TELECEL) and machinery FY92 6.0 - 6.0 - 6.0Societe Textile de Kisangani, S.Z.A.R.L Textiles FY85 8.9 - 9.4 0.4 9.8Utexafrica, S.P.R.L. and Usines Textiles Cotonnieres

de Kinshasa (Utexco), S.Z.A.R.L. Textiles FY88 13.5 - 15.3 - 15.338.9 0.4 39.3

103

International Finance Corporation

I N V E S T M F N T P O RT F 0 L I 0

June 30, 1992Expressed in millions of United States dollars asiginal InvneneshwldfortheCoiporaton

Fisalyenars comennent (inludiing w is)snedalnIes)in whichconintitnit Tota Total Eqity Total l}so

Contry, region oroehrera,and ohigor Senor scover n7ai IFC sndkicasons Loan, (a cst, a5nd eqetat

ZambiaGwembe Valley Development Company Limited Food and agribusiness FY88 4.5 - 3.7 0.8 4.5

Kafue Textile of Zambia Limited Textiles FY80, 85 10.5 - 7.9 - 7.9

Masstock (Zambia) Limited Food and agribusiness FY89 8.0 - 8.2 - 8.2

Zambia Bata Shoe Company Limited General manufacturing FY72, 73 0.2 1.1 - 0.2 0.2

Zambia Consolidated Copper Mines Limited Nonferrous metals FY80, 82 45.1 8.0 15.1 - 15.1

Zambia Hotel Properties Limited Tourism FY84, 91 7.5 14.5 6.5 - 6.5

41.4 1.0 42.5

ZimbabweBarclays Bank of Zimbabwe Limited Capital markets FY91 10.4 10.0 10.5 - 10.5

Crest Breeders Internationial (Private) Limited Food and agribusiness FY86 5.5 - 3.2 0.6 3.8First Merchant Bank ofZimbabwe Limited' Capital markets FY92 15.0 - 15.0 - 15.0

First Merchant Bank ofZimbabwe Limited Capital markets FY92 15.6 15.0 15.8 - 15.8FMB Holdings Limited Capital markets FY91, 92 2.7 - - 2.7 2.7

Mashonaland Holdings Limited General manufacturing FY90 4.7 - 4.9 - 4.9Mat-tools and Forging (Private) Limited Industrial equlipment

and machinery FY90 0.7 - 0.4 0.3 0.7Meikles Consolidated Holdings (Private) Limnited Tourism FY92 8.3 - 8.3 - 8.3

Merchant Bank of Central Africa Limited Capital markets FY91 13.0 12.5 13.2 - 13.2National Blankets Limited Textiles FY91 6.5 - 6.5 - 6.5

Petrozim Line (Private) Limited Industrial services FY92 16.7 16.0 16.7 - 16.7Retrofit (Private) Limited Industrial services FY90 0.4 - 0.2 0.1 0.3Scotfin Limrited Capital markets FY90 7.5 - 6.3 - 6.3Staidard Chartered Merchalt Bank Zimbabwe Linmited Capital markets FY91 15.4 15.0 15.8 - 15.8Syfrets Merchant Bank Limrited Capital markets FY91 12.9 12.5 13.2 - 13.2T.A. Trading Corporation Private Limited Tourism FY91 2.0 - 2.0 - 2.0

udc Limited Capital markets FY85, 87, 88 12.0 - 7.0 0.4 7.4Venture Capital Comiipany ofZinibabwe, Ltd. Capital markets FY91 1.1 - 1.1 1.1Wankie Colliery Company Limited Mining FY81 12.0 18.0 0.8 - 0.8Zimbabwe Spinners andWeavers Limited Textiles FY91 5.0 - 5.0 - 5.0

144.7 5.2 149.9

RegionalAfrican Management Services Company Industrial services FY89 1.4 - - 1 .4 1.4

SIFIDA Investment Company, S.A. Development financing FY71, 85 1.0 - - 0.6 0.62.0 2.0

Total for Sub-Saharan Africa 724.7 66.4 791.1

ASIA

BangladeshBata Shoe Company (Bangladesh) Limited General manufacturing FY85, 86 3.6 1.4 1.0 0.5 1.5Dynamic Textile Industries Limited Textiles FY92 2.5 2.0 2.5 - 2.5

Industrial Development Leasing Companyof Bangladesh Limited Capital markets FY85 3.2 - 1.5 0.1 1.7

Industrial Promotion and Development Companyof Bangladesh Limited Developmenit financing FY82 1.1 - - 1.1 1.1

5.1 1.7 6.8

ChinaChinla Bicycles Company, Limited General manufacturing FY88, 92 19.9 - 15.0 2.4 17.4Crown (China) Electronics Co. Ltd. General manufacturing FY89 15.0 - 12.5 - 12.5

Guangzhou Peugeot Automobile Company Ltd. Automotive/accessories FY85, 92 19.5 - 10.3 4.5 14.9jF China Investment Company Limited Development financing FY88 3.0 - 3.0 t 3.0Shenzhen-Chronar Solar Energy Co., Ltd. General manufacturing FY89 1.0 - - 1.0 1.0

40.8 8.0 48.8

104 INVESTMENTPORTFOLIO

International Finance Corporation

I N V E S T M E N T P O R T F O L I O

June 30, 1992Expressed in millions of United States dollars Orno lTnvestssenrs heldfor the feorain

FLsclyears comrnitments (indudingsaidisbursed balnces)in Whi hcomrmitments Foul TotA Fquitv Toti loans

Countryregonorotherarea,aledobliigor Senor werer ma ITC syndioations Loams ratcost) andequity

FijiCapos Limited Tourism FY86 8.8 - 4.9 - 4.9Fiji Forest Industries Limited Timber, pulp, and paper FY87 3.6 - - 1.6 1.6Merchant Bank of Fiji Limited Capital markets FY87 0.4 - - 0.3 0.3

4.9 2.0 6.9

IndiaAccelerated Freeze Drying Co. Food and agribusiness FY87 0.3 - 0.3 - 0.3Arvind Mills Limited Textiles FY92 18.0 - 9.0 9.0 18.0Atic Industries Limited Textiles FY87 0.3 - 0.2 - 0.2Bannari Amman Sugars Ltd. Mining FY87 0.9 - 0.7 - 0.7Bihar Sponge Iron Limited Iron and steel FY85, 91 15.9 - 15.0 0.7 15.7Block KG-OS-IV Petroleum Exploration Program Energy FY92 8.2 - - 8.2 8.2Bombay Suburban Electric Supply Limited (BSES) Tndustrial services FY91 50.0 - 50.0 - 50.0

CESCLimited Industrialservices FY91 22.1 - 22.1 - 22.1

City Mills (Private) Limited Textiles FY87 0.7 - 0.5 - 0.5Deepak Fertiisers and Petrochemicals Corporation

Limited Fertilizers FY80, 82,89 11.7 - 1.9 2.9 4.7

Fiberglass PiLldngton Limited, Bombay Industrial equipmentand machinery FY87 0.3 - 0.2 - 0.2

Gem Granites, Madras Mining FY87 1.3 - 1.0 - 1.0Gujarat Narmada Valley Fertilizers Company Limited Fertilizers FY87 38.1 - 31.0 - 31.0Gujarat State Fertilizers Chemicals and

petrochemicals FY89, 92 40.8 - 40.0 - 40.0Herdillia Oxides and Electronics Limited Chemicals and

petrochemicals FY91 0.3 - 0.3 0.3Hero Honda Mltors Limited Automotive/accessories FY87 7.7 - 4.8 - 4.8Hindustan Motors Limited Automotive/accessories FY87 30.4 - 31.0 - 31.0Housing Development Finance Corporation Limited Capital markets FY78,87,91 45.5 - 40.0 1.5 41.5IFGL Refractories Limited* Iron and steel FY92 - - - 0.6 0.6India Fquipment Leasing L.imited Capital markets FY86 0.3 - - 0.3 0.3India Lease Development Limited Capital markets FY86, 91 4.3 - 3.5 0.6 4.1Indus Venture Capital Fund I Capital markets FY92 1.2 - 1.2 1.2Infrastructure Leasing and Financial Services Limited Capital markets FY91 16.8 - 15.0 1.8 16.8Invel Transmissions Limited Automotive/accessories FY88 1.1 - - 1.1 1.1I' 1W Signode India Limited Iron and steel FY82, 86,87,91 3.4 - 0.5 0.4 0.9J.M. Share & Stock Brokers Private Limited Capital markets FY90 0.4 - - 0.4 0.4KH Shoes Limited General manufacturing FY87 0.4 - 0.1 - 0.1Kotak Mahindra Finance Lhnited Capital markets FY92 0.8 - 0.8 - 0.8Ml S Shoes East Limited General manufacturing FY87 0.4 - 0.1 - 0.1M.A. Khizar Hussain & Sonis Geoeral manufacturing FY87 0.6 - 0.1 - 0.1Mahindra & Mahindra Ltd. Automotive/accessories FY81, 90 16.4 - 10.0 5.8 15.8Mahindra Ugine Steel Company, Ltd. Iron and steel FY64, 75,

79,90 11.8 0.1 - 1.9 1.9Modi CemeTnt Limited Cement anid

construction materials FY85 13.0 - 18.8 - 18.8N B Footwear limited General manufacturing FY87 0.5 0.4 - - 0.4

Nagariuna Coated Tubes Limited Iron and steel FY82 1.7 - 1.5 0.2 1.7Nippon Denro Ispat Limited Iron and steel FY92 46.7 - 40.0 6.7 46.7

NSL Limited Iron and steel FY82 1.4 - - 0.2 0.2

Paharpur Cooling Towers Limited Industrial equipmentand machinery FY87 0.9 - 0.9 - 0.9

SKF Bearings India Limited Industrial equipmentand machinery FY92 11.5 11.5 11.5

SPIC Fine Chemicals Ltd.** General manufacturing FY91 - - - 1.0 1.0Super Tannery (India) Limited General manufacturing FY87 0.1 - 0.1 - 0.1

Switching Technologies Guenther Limited Industrial equipmentand machinery FY87 1.0 - 0.5 - 0.5

105

International Finance Corporation

I N V E S T M E N T P O RT F O L I O

June 30, 1992Expressed in millions of United States dollars Oripael Investmnentheldforthe G2porat

Fiscalyars co$nsts (induseig,ndg isbarselcnem)in which ommitents Tota Toal Fquy Tota lans

Country,regionorother a,aandobligr Sector were nzade IFC soadicnsens LS (etcost) andequity

India, continuedTan India Limited Chemicals and

petrochemicals FY87 0.5 - 0.5 - 0.5

lata Electric Coompanies Industrial services FY90, 91 110.3 - 109.7 - 109.7

Tata Keltron Ltd. lndustrial equipmentand machinery FY89, 90, 92 0.6 - 0.6 - 0.6

Technology Development and InformationCompany of India Capital markets FY91 2.2 - - 2.2 2.2

The Ahmedabad Electricity Company, Limited Industrial services FY89 20.8 - 21.5 - 21.5T'he Coromandel Engineering Company, Limited Mining FY87 0.6 - 0.3 - 0.3

The Great Eastern Shipping Company Limited Industrial services FY87 11.9 - 0.1 10.7 10.8The Gujarat Rural Housing Finance Corporation

Limited Capital markets FY87 0.2 - - 0.2 0.2

The Indian Rayon Corporation Limited Chemicals andpetrochemicals FY82, 87 8.2 - 2.9 - 2.9

The Industrial Credit and Investment CorporationofIndia Limited* Development financing FY91 23.4 - - 23.4 23.4

The Tata Iron and Steel Company Limited Imn and steel FY81, 86, 89 65.4 20.0 28.2 12.3 40.6

Titan -Watches Limited General manufacturing FY87,89,90 20.4 - 16.5 0.4 17.0Triveni Pool Intairdril Limited Industrial services FY91 0.6 - - 0.6 0.6UCAL Fuel Systems Limited Automotive/accessories FY90 0.6 - - 0.6 0.6Varun Shipping Company Limited Industrial services FY91 16.7 - 15.7 0.7 16.3

Wires & Fabriks (S.A.) Limited, Jaipur Industrial equipmentand machinery FY87 0.4 - 0.4 - 0.4

vWTI Advanced Technology General manufacturing FY89 0.2 - - 0.2 0.2547.3 96.5 643.8

IndonesiaBank Niaga* Capital markets FY90 5.0 - 5.0 - 5.0Nomura Jakarta Fund (NJF) Financial services FY90 1.5 _ - 1.5 1.5P.T. Agro Muko Food and agribusincss FY91 12.7 - 10.5 2.2 12.7P.T. Argo Pantes Textiles FY91 43.0 53.0 30.0 13.0 43.0PT. Astra International, Incorporated Automotive/accessories FY90, 91 20.4 - - 12.5 12.5P.T. Asuransi Jiwa Dharmala Manulife Capital markets FY88 0.3 - - 0.3 0.3

P.T. Bakrie Kasei Corporation Chemicals andpetrochemicals FY92 39.6 95.0 30.0 9.6 39.6

P.T. Bali Holiday Village Tourism FY88 3.5 2.0 2.2 - 2.2P.T. Bank Umum Nasional' Capital markets FY90 10.0 - 10.0 - 10.0P.T. Citra Agramasinti Nusantara** Industrial services FY90 - - 1.9 - 1.9P.T. Indo-Rama Synthetics Textiles FY90, 91 33.2 - 27.0 6.2 33.2P.T. Indonesia Asahi Chemical Industry Textiles FY92 5.8 - 4.0 1.8 5.8P.1 Jakarta International Hotel Tourism FY73, 89 1.5 7,0 - 2.7 2.7

PT. Lantai Keramik Mas Cement and

construction materials FY92 7.1 10.0 5.4 1.7 7.1

P.T. Nusantara Island Rcsortt* Tourism FY90 - 2.5 - 2.5

P.T. Papan Sejahtera Capital markets FY80 1.2 - - 1.2 1.2

PT. Priv-ate Development Finance Company

of Indonesia Development financing FY74 0.5 - - 0.4 0.4

P.T. Rimba Partikel Indonesia Timbcr, pulp, and paper FY92 10.6 10.0 10.0 0.6 10.6

PT. Saseka Gelora Leasing Capital markets FY82, 85 0.4 2.0 - 0.4 0.4

PT. Semen Andalas Indonesia Cement and

construction materials FY80, 88 20.6 28.0 20.9 - 20.9

P.T. Swadharnia Kerry Satya Tourism FY92 35.0 - 35.0 - 35.0

P.l Unitex Textiles FY71 0.8 1.8 - 0.3 0.3

Raja-Pendopo Oil Exploration Program Energy FY91 3.6 - - 3.6 3.6

194.3 58.0 252.2

106 INVESTMENT PORTFOL10

International Finance Corporation

I N VX F S T M E N T P O R T F O L I O

June 30, 1992Expressed in millions of United States dollars ongmwi Invmoenwtsheldr6ume Coiravnn

years cmitrnet (inctvdingundesulbalaces)in wiidi

o l aenls To Total erry Toallba7Ountr)regon or ogerart, andaoblgor Sector weremad IC ,y1catons bans (atcost) andequ

Korea, Republic ofAnam Industrial Company Limited Industrial equipment

and machinery FY88 15.7 - - 15.7 15.7Dae Seong Company Ltd.*' Automotive/accessories FY85 - - - 0.2 0.2Daemyung Industrial Company Limited*+ Textiles FY85 - - - 0.2 0.2Gold Star Company, Ltd. General manufacturing FY75, 76, 77, 79,

80, 84, 85, 87,88, 89, 91,92 21.9 - - 19.5 19.5

Hae Ryong Silicone Company Ltd.- General manufacturing FY85, 91 - - - 0.2 0.2Hae Un Dae Development Company, Ltd. Tourism FY75, 90 3.2 - - 1.2 1.2Hana Bank Capital markets FY71, 74, 76,

79, 80, 82,85,89,91 11.0 - - 5.0 5.0

Korea Development Investment Corporation Capital markets FY83. 91 1.7 - - 1.7 1.7Korea Development Investment Corporation' Development financing FY85 5.0 - - 2.2 2.2Korea Development Leasing Corporation Capital markets FY77, 79,

87,90 1.4 - - L2 1.2Korea Long Term Credit Bank Development financing FY68, 74, 76,

77, 78, 80, 90 22.5 - - 19.8 19.8Korea Partner Industry Company Ltd.+ General manufacturing FY85 - - - 0.3 0.3Korea Zinc Company, Ltd. Nonferrous metals FY76, 86,88 11.6 - 3.5 5.6 9.1Sam Kwang Chemical Company Ltd. "' Chemicals and

petrocheTnicals FY85 - - - 0.1 0.1Sam Kwang Moolsan Company Ltd."t Mining FY85 - - - 0.2 0.2Seoshin Electronics Company Ltd." Industrial equipment

and machinery FY85 - - - 0.3 0.3Seoul Cad Mold and Tool Company Ltd." Industrial equipment

and machinery FY85 - - - 0.1 0.1Sewon Electro-Mechanics Company Ltd." Industrial equipment

and machinery FY85 - - - 0.3 0.3Shin Chang Precision Company Ltd.*' Automotive/accessories FY85 - - - 0.2 0.2Suhyung Industry Company Ltd.- Industrial equipment

and machinery FY85 - - - 0.1 0.1Sung Kwang Lighting Company Ltd.>> Industrial equipment

and machinery FY85 - - - 0.1 0.1Taihan Bulk Terminal Co., Ltd. Industrial services FY81 6.0 - - 1.5 1.5Tong Yang Nylon Company, Limited Textiles FY75, 88,

89,91 4.2 - - 5.6 5.63.5 81.8 85.3

MalaysiaM\alaysian Ventures (Two) Sdn Bhd. Capital markets FY92 1.0 - - 1.0 1.0Malaysian Ventures Management Incorporated

Sdn. Berhad II Capital markets FY92 t - - t t

South East Asia Venture Investment Project (SEAVl) Capital markets FY85 0.8 - - 0.3 0.3Twenty First Century Oleochemicals Sdn. Bhd. Chemicals and

petrochemicals FY90 5.2 3.4 4.5 0.7 5.24.5 2.1 6.6

NepalSoaltee Hotel Limited Tourism FY75 0.4 - - 0.4 0.4

- 0.4 0.4

PakistanAttock Refinery Limited Energy FY79 6.6 - - 0.6 0.6DawoodlHercules Chemicals, Ltd. Fertilizers FY69, 89 15.2 - 4.1 - 4.1Exxon CheLm1ical Pakistan Limited Fertilizers FY91 44.7 5.0 36.2 8.5- 44.7First International Investment Bank Limited Capital markets FY90, 92 1.6 - - 1.6 1.6

107

International Finance Corporation

I N V E S T M E N T P O RT F O L I O

June 30, 1992Expressed in millions of United States dollars Orignal m Inmrtmen theildfor the Corpuratwn

Fiscalyaears co,nmitnenti (muding undg i a sedbalances,in whichconmnirnenrts Tota Told Eluit Tokdtans

Catenty,regionorother arecandobligor Sector were niade 1Fc sydiahions Loans (accost) andequity

Pakistan, continuedHala Spinning Limited Textiles FY89 3.9 - 3.5 0.7 4.1International Housing Finance Limited Capital markets FY92 5.6 - 5.5 0.1 5.6ivMari Gas CompanyLimited Energy FY86, 92 25.5 - 23.0 - 23.0Millat Tractors Limited Industrial equipment

and machinery FY88 4.9 - 4.2 - 4.2

Packages Limited Timber, pulp, and paper FY65, 81,82, 87,92 8.0 - 3.9 0.9 4.8

Pak-Suzuki Motor Company Linited Automotive/accessories FY90 18.1 - 19.1 - 19.1Pakistan Industrial Credit and Investment

Corporation Limited Development financing FY63, 69 0.6 - 0.6 - 0.6PakisLan industrial Leasing Corporation Limited Capital markets FY91 5.0 - 5.0 - 5.0Pakistan Petroleum Limited Energv FY83, 85 19.8 - 4.9 1.6 6.4Prudential Discount and Guarantee House Limited Financial services FY91 0.4 - - 0.4 0.4Tlsatta Exploration Project Energy FY87, 89 6.8 - - 1.6 1.6

109.4 16.4 125.8

Philippines

Acoje Mining Companry Inc. Mining FY77, 85 2.3 - 1.3 - 1.3All Asia Capital and Leasing Corporation (AACL) Capital markets FY80, 83,

89, 90 5.2 - 1.2 0.7 1.8Automated Microelectronics Inc. Industrial equipment

andmachinery FY91 11.8 - 9.0 2.8 11.8Avantex Mil Corporation Textiles FY91 13.6 11.3 2.3 13.6Best Chemicals and Plastics, Inc. Chemicals and

petrochemicals FY91 8.8 - 6.5 2.3 8.8BPI Agricultural Development Bank Development financing FY87 1.0 - - 1.0 1.0Davao Union Cement Corporation Cement and construction

materials FY81, 92 9.8 - 1.5 0.8 2.4General Milling Corporation Food and agribusiness FY79, 90 5.7 - - 1.7 1.7Hambrecht & Quist Venture Capital Fund Capital markets FY89 2.3 - 2.3 2.3Hopewell Energy (Philippines) Corporation Industrial senices FY91 11.1 - 8.1 1.1 9.2Makati Shanghri-La Hotel and Resorts Inc. Tourism FY91 29.5 29.5 29.5 - 29.5Manila Electric Company Industrial services FY67, 89 25.2 - 28.7 - 28.7Maria Cristina Chemical Industries, Inc. Iron and steel FY74, 79 0.4 - - 0.4 0.4NDC-Gnthrie Plantations, Inc. Food and agribusiness FY82 11.0 - 9.2 - 9.2

Philippine Associated Smelting and RefiningCorporation Nonferrous metals FY80 5.0 - - 0.5 0.5

Philippine Long Distance Telephone Companiy Industrial services FY70, 87, 88,90 84.0 40.0 80.0 - 80.0

Pure Foods Corporation Food and agribusiness FY86,91, 92 4.5 - - 4.5 4.5186.2 20.4 206.6

Sri LankaBank of Ceylon Capital markets FY78, 81 7.0 - 0.9 - 0.9C.K.N. Fund Ianagement (Private) Ltd. Financial services FY92 0.1 - - 0.1 0.1Development Finance Corporation of Ceylon Development financing FY78, 80, 83 0.5 - - 0.4 0.4Pyramid Unit Trust Financial services FY92 0.3 - - 0.3 0.3Tai Lanka Hotels Limited Tourism FY81 8.5 1.8 0.6 2.4Unioni Assurantce Limited Capital markets FY88 0.5 - - 0.5 0.5

2.7 1.9 4.5

ThailandAyndhya Development Leasing Company Limited Capital markets FY92 0.2 - - 0.2 0.2Collection Industrial Associated (Bangkok) Ltd." General manufacturing FY90 - - - 0.5 0.5HMC Polymners Company Limited Chemicals and

petrochemicals FY88 16.5 11.0 12.1 1.5 13.6Krung Thai IBJ Leasing Company, Lirmited Capital markets FY92 0.4 - - 0.4 0.4

108 1NVkSTMENTPORTFOLIO

International Finance Corporation

I N V E S t M E N T P O R T F O L I O

June30, 1992

Expressed in millions of United States dollars Oiginal Imestnents heUrlthe CorporationFcalfyear coniainraentL (indsiuligsunLsoussed balaces)im nv/Pchciratnitulents Total TOWl ETsd Totr las

Coo' try,regiornorotzerarea,aniduobigor Sector vere rnade Fc syuyndieatieso Leans (atcost) ndscioesity

Thailand, continuedLadprao General Hospital Company Ltd.*' Industrial services FY90 - - - 0.3 0.3National Petrochemical Corporation Limited Chemicals and FY84, 86,

petroclhemicals 88, 89 35.5 - 35.0 0.5 35.5Northeast Agriculture Company Limited Food and agribusiness FY87, 90 2.1 - 1.5 0.5 2.1Peroxythai Limited Chemicals and

petrochenmicals FY89 10.7 - 10.7 - 10.7

Phansrivivat Company, Ltd Food and agribusiness FY88 4.7 - 3.6 1.1 4.7Sea Minerals Limited Nonferrous metals FY83 0.6 - - 0.3 0.5SEAVIProject Capitalmarkets FY85,91 1.5 - - 1.5 1.5Seavi Thailand Venture Management Ltd. Capital markets FY9 t f - - i

Shin Ho Paper (Thalland) Company, Limited Timber, pulp, and paper FY92 28.0 30.0 22.0 6.0 28.0Siam Asahi Technoglass Co., Ltd. General manufacturing FY90 8.2 - - 8.2 8.2Siam City Cement Co., Ltd. Cement and FY79, 81,

construction materials 85, 87, 92 59.4 120.0 30.0 1.6 31.6Siam Commercial Bankc (SCB)7 Development financing FY90 15.0 - - 15.0 15.0The Bank of Asia Limited Capital markets FY92 5.6 - - 5.6 5.6The Bank of Asia Limited' Capital markets FY92 20.0 - 20.0 - 20.0The Siam Cement Co., Ltd. Cement and FY69, 76,

construction materials 73, 80, 85 4.9 - - 1.4 1.4The Thai Farmers Baiik Limited' Develupsssesst financing FY90 5.0 - - 4.0 4.0Top Easy Company Ltd." General manufacturing FY90 - - - 0.2 0.2

135.0 49.1 134.1

Other (Taiwan, China)2

Asia Cement Corporation Cement andconstruction materials FY70 1.2 - - t t

RegionalJardine Fleming Asia Select Limited Financial services FY90 11.4 - - 10.5 10.5South East Asia Venture Investment

Company N.V. (SLAVIC) Capital markets FY85 1.0 - - 0.4 0.4South East Asia Venture Investment

Management, Ltd. (SEAVIM) Capital markets FY85 0.1 - - 0.1 0.1- 10.9 10.9

Total for Asia 1,233.6 349.2 1,582.7

EUROPE

CyprusDome Investments Limited Tourism FY83 2.5 - - 0.3 0.3Leptos Calypso Hotels Limited Tourism FY91 8.2 - 8.2 8.2

8.2 0.3 8.5

CzechoslovakiaCementarny a Vapeniky Mokra a.s. Cement and

construction materials FY92 17.2 - - 17.2 17.2Zivnostenska Banka Capital markets FY92 6.4 - - 6.4 6.4

- 23.6 23.6

HungaryAgroferm Hungarian-Japanese Fermentation

lndustry Lrd. Food and agribusiness FY87 11.3 - 8.6 2.7 11.3Budapest Bank Limited' Capital markets FY91 25.9 - 25.9 --- 25.9Dexter Mold Making Company Limited General manufacturing FY90 4.2 - 3.2 0.9 4.2

109

International Finance Corporation

I N V E S T M E N T P O R T F O L I O

June 30, 1992Expressed in millions of United States dollars Onrpnaf InvesoentslelfforteeCorporaion

F.scalys conitents (icldingindisbursadbalances)in whor hmt s rTot TOW] Fusi Totaloans

Csuntn region or other ares, and obbgko Sector rmade IFC oans (atcost) ar qiy

Hungary, conrinued

Dunastyr Polisztirolgyarto Rt Chemicals andpetrochemicals FY89 18.0 12.6 16.6 3.8 20.4

Euroventures Hungary B.V. Capital markets FY92 2.7 - - 2.7 2.7

First Hungarian Investment Advisory Rt. Financial services FY90 t - - t tMagyar Suzuki Corporation Autormtive/accessories FY91 39.3 - 32.8 6.5 39.3Nomura Magyar Befektetesi Bank Rt. Capital markets FY91 1.5 - - 1.5 1.5

Salgotarian Glass Wool Limited Industrial equipmentand machinery FY88, 89,92 5.5 - 2.9 2.0 5.0

Tetra Pak Hungary Limited Timber, pulp, and paper FY90 10.5 - 7.5 3.1 10.6The First Hungary Fund Limited Financial services FY90 7.5 - - 7.5 7.5Unicbanik Rt. Capital markets FY87, 92 10.0 - 10.0 - 10.0Westel Radiotelefon KFT Industrial services FY92 15.0 - 15.0 - 15.0

122.5 30.7 153.2

PolandCentrala Spoldzielni Ogrodniczych i Pszcelarskich

(Hortex) Food and agribusiness FY89 17.3 - 18.8 - 18.8

Chemagev, Limited Industrial services FY92 4.1 7.6 3.0 1.1 4.1Export Development Bank' Capital markets FY90 30.7 - 28.2 - 28.2International Bank in Poland (IBP) Capital markets FY91 3.2 - - 3.2 3.2ITAL-POL Company Ltd." General manufacturing FY90 - - 0.3 - 0.3Mariusz Malkiewicz** Food and agribusiness FY90 - - 0.1 - 0.1Philips Lightiig Poland S.A. General manufacturing FY92 15.0 - 15.0 - 15.0Piotr Ostrowski Partnership in Wetdina** Tourism FY90 - - 0.2 - 0.2Rotter Clothing Enterprises- Industrial services FY90 - - 0.1 - 0.1

Rybka Ironwork-' Iron and steel FY90 - - 0.4 - 0.4Saar Papier International Limited5 5 Industrial services FY90 - - 0.2 - 0.2Sawena-

5Textiles FY90 - - 0.8 - 0.8

Spolka Eurocamion5 5

Industrial services FY90 - - 0.1 - 0.1

Spolka Grasi-* Industrial services FY90 - - 0.1 - 0.1

Tadeuze Manczak*1 General manufacturing FY90 - - 0.1 - 0.1

TiHF Hotel Orbis Bristol Limited Liability Company Tourism FY91 11.0 - 11.0 - 11.0Tworczosc** Textiles FY90 - - 0.6 - 0.6

Waldeman M4achelewski" Food and agribusiness FY90 - - 0.4 - 0.4Zaldad Produkgji Metalowej (DECMET)- Industrial services FY90 - - 0.1 - 0.1

79.4 43 83.7

PortugalAl Hikma Farmaceutica (Portugal), Limitada General manufacturing FY91 2.0 - 2.0 - 2.0Banco Portulgubs de Investimento Developmenit financinig FY82, 85, 87,

88,90,91 22.7 2.0 5.5 0.6 6.1

Finantia - Sociedade de Investimentos, S.A. Capital markets FY88, 91 3.8 - - 3.8 3.8Finantia Capital - Sociedade de Capital de Risco S.A. Financial services FY90 4.0 - - 4.0 4.0Inter-Risco - Sociedade de Capital de Risco S.A. Capital markets FY89, 90 0.3 - - 0.3 0.3Uniao Industrial Textil e Quimica, SiA. Chemicals and

petrochemicals FY90 6.6 - 6.7 - 6.7

14.2 8.7 22.9

TurkeyAnadolu Cam Sanayii A.S. Industrial equipment FY70, 86, 87,

and machinery 90,92 11.6 - 6.2 2.3 8.4Cam Elyaf Sanayii A.S. Industrial equipment

and machinery FY86 7.9 - 4.3 - 4.3

Coats (Turkiye) Iplik Sanayii A.S. Textiles FY89 7.7 - 8.2 - 8.2Dusa Endustriyel Iplik Sanayi Textiles FY89 17.0 8.0 13.6 - 13.6Eczacibasi Ilac Sanayi ve Ticaret A.S." Industrial services FY90 - - 3.0 - 3.0

110 INVESIAMENT PORTFOLIO

International Finance Corporation

I N V E S T M E N T P O RT F O L I O

June 30, 1992Expressed in millions of United States dollars Oinal ne t efar G'theCa n

FiA nyears cosneenns' (rncluh disbussbles)in which

inmmb,ms a oad Total Equiv Tot4al klwns

Counto rogion odwrarea, wid oblWr Sector werew nde IFC sptls Loans (atr cos) andequity

Turkey, continiued

Elbo Gaz Mamulleri ve Kontrol CihazlariSanayi ve Ticaret A.S. General manufacturing FY92 19.3 5.9 19.3 - 19.3

Elginkan Holding A.S. General manufacturing FY88 16.5 - 15.0 - 15.0Eska Turism ve Ticaret A.S. Tourism FY86, 89 9.1 - 10.7 - 10.7Finansbank, A.S. Financial services FY92 10.0 20.6 10.0 - 10.0GuneySanayi veTicaretlsletmeleriA.S. Textiles FY87 16.5 - 12.6 - 12.6Heller Factoring, A.S. Capital markets FY92 0.5 - - 0.5 0.5Is Genel Finansal Kiralama A.S. Capital markets FY88, 90 0.7 - - 0.7 0.7Isko Testil Sanavi ve Ticaret A.S. Textiles FY89 33.2 - 35.3 - 35.3Kamelya Turizm Isletmecilik Ticaret A.S. Tourism FY90 12.1 - 12.9 - 12.9Kepez Elektrik T.A.S. Industrial services FY91 25.0 - 25.0 - 25.0Kiris Otelcilik Ve TurizmA.S. Tourism FY89, 90 13.0 - 14.6 - 14.6Kirklareli Cam Sanayii A.S. General manufacturing FY81, 89 31.5 - 20.5 - 20.5Koy-TurHoldingA.S. Foodandagribusiness FY91,92 12.7 - 8.6 4.1 12.7KulaMensucatFabrikasiA.S. Textiles FY91 19.4 - 19.7 - 19.7Man Kamyon ve Otobus Sanayi A.S. Antomotivelaccessories FY85 6.5 - 5.2 - 5.2Mersin Enternasyonal Otelcilik, A.S. Tourism FY90 8.4 4.0 8.5 - 8.3Mis Sut Sanayii, A.S. Food and agribusiness FY92 15.0 - 10.0 5.0 15.0NASCO Nasreddin Holding AS. Textiles FY92 17.5 5.0 15.0 2.5 17.5Pinar Entegre et ve Yem Sanayii A.S. Food and agribusiness FY84 3.9 - 0.6 - 0.6Ram Dis Ticaret A.S. Capital markets FY89, 92 18.2 55.0 19.0 - 19.0Sanko Santral Konfeksiyon Sanayii ve Ticaret A.S. General manufacturing FY89 6.4 - 7.0 - 7.0Sariville Thristik Tesisler A.S. Tourism FY89 4.0 - 2.8 2.2 5.0Silkar Turizm Yatirim ve Isletmeleri A.S. Tourism FY86,90 19.3 9.5 13.1 4.9 18.0Simplot-Besikcioglu A.S. French Fries (SB) Food and agribusiness FY90 9.4 - 9.4 - 9.4Trakya Cam Sanayii A.S. Industrial equipment FY79, 83, 84,

andmachinery 89,91 65.1 20.0 40.6 7.8 48.4Turk Dis Ticaret Bankasi AS. Capital markets FY89 12.5 47.5 12.5 - 12.5Turkiye Sinai Kalkinma Bankasi, A.S. Development financing FY64, 67, 69,

72, 73, 75, 76,

80, 83,92 3.6 - - 0.7 0.7

Uluslarrasi Endustri ve Ticaret Bankasi A.S. Financial services FY88, 91, 92 25.0 60.0 12.8 - 12.8United Turkish Gulf Bank, Birlesik Turk Korfez

Bankasi, A.S. Financial services FY92 8.0 16.4 8.0 - 8.0Viking Kagit ve Seluloz, A.S. Timber, pulp, and paper FY70, 71, 82, 83 0.8 - - 0.8 0.8Yeditepe Beynelmilel Otelcilik Turizm ve Ticaret AS. Tourism FY90 25.0 24.0 21.0 4.0 25.0

425.0 35.5 460.4

YugoslaviaBelisce-Bel Tvornica Papira, Poluceluloze

i Kartonaze - Belisce Timber, pulp, and paper FY73, 81 20.0 - 1.3 - 1.3Delo Pre-Press Modernization Timber, pulp, and paper FY91 3.9 - 4.2 - 4.2hldustrija Za Avtomobilski Delovi i Traktori - `Ruen"

Kocani Automotive/accessories FY82 10.6 - 4.3 - 4.5

Institut Za Fizikalnu Medicinu I Rehabilitaciju -Dr. Simon Milosev Industrial services FY82, 88 18.9 - 11.0 - 11.0

Investiciona Banka Titograd-Udruzena Banka Tourism FY80 21.0 - 2.0 - 2.0ISKRA Industrial equipment

and machinery FY85, 89 23.5 - 18.2 - 18.2Jugobanka - Udruzena Banka Beograd Financial services FY86 25.4 10.4 18.4 - 18.4Ljubljanska Banka - ZdruzenaBanka Financial services FY83,86 71.1 29.8 31.5 - 31.5Radoje Dakic Industrial equipment

and machinery FY80 7.7 - 1.2 - 1.2

Salonit Anhovo Industrija Grad Materiala Cement andconstruction materials FY74, 90 18.0 - 8.0 - 8.0

Small-Scale Enterprise Project (Loani to Eight Banks) Fissancial services FY80 26.0 - 1.3 - 1.3

1111

International Finance Corporation

I N V E S T M E N T P O R T F O IO T O

June 30, 1992Expressed in millions of United States dollars Origi Irnootme snebld for the Corporation

yLsatlyears ommitwens r(including undissursedb8anoes)in lsvisihtsmrnmisrants To"d ToUN! Equity Toallo

CourcflV r-egion or herareaandobliger Setor weremade EFC ty tious Loans (at cost) andequtty

Yugoslavia, contiutoed

Sour Energoinvest Industrial equipmentand machinery FY85 15.2 - 9.9 - 9.9

Tovarna Avtomobilov in Motoriev Maribor Automotive/accessories FY71, 87 26.7 - 24.0 - 24.0Tovarna Avtopnevmatike "Sava-Semperit" Automotive/accessories FY72, 78, 88 20.2 - 12.9 - 12.9Tvornica Kartona I Ambalaze Cazin Timber, pulp, and paper FY77 8.3 - 4.3 - 4.3UNIAL - Tovarna Glinice in Aluminija Boris Kidric Nonferrous metals FY87 35.6 - 29.6 - 29.6Vojvodjanska Banka-Udruzena Banka Financial services FY87, 89 56.0 30.4 51.8 - 51.8

234.1 - 234.1

RegionalOsterreichische Landerbank A.G. (OLB)* Capital markets FY92 25.0 25.0 25.0 - 25.0

25.0 - 25.0

Total for Europe 908.4 103.0 1,011.4

LAI IN AVMERICA AND THE CARIBBEA N

Argentina

Algodonera Santa Fe S.A.** Textilcs FY90 - - 0.8 - 0.8

Alpargatas S.A.I.C. Textiles FY77, 84,

86, 88 39.4 - 17.8 4.1 21.8

Alpesca, S.A. Food and agribusiness FY79, 83,84 6.6 - - 1.6 1.6

Arcor S.A.I.C. General manufacturing FY88 12.0 - 7.0 - 7.0

Argeintiie Investmentt Companiy Financial services FY89 2.0 - 2.0 2.0

Astra - C.A.P.S.A. (Lindero Field) Energy FY88 12.4 - 4.4 - 4.4

Astra - Companiia Argentina de Petr6leo S.A. Energy FY89, 92 50.0 43.0 40.6 - 40.6

Banco de Crelito Argentino S.A. Financial services FY91 10.0 - 10.0 - 10.0

Batnco Frances del Rio) de la Plata S.A. Developmsent finiancin,g FY89 15.0 - 15.0 - 15.0

Banco General de Negocios S.A.' Capital markets FY88, 89 16.6 - 4.9 - 4.9

Banco Rio de la Plata, S.A. Capital markets FY88, 92 50.0 - 50.0 - 50.0

Banco Roberts S.A. Capital markets FY86,89,91 11.6 - 5.4 2.0 7.4

Benvenoto S.A.I.C.- Food an(i agribusiness FY86 - - 0.1 - 0.1

Bolland & Cia, S.A.*T Tourism FY89 - - 0.7 - 0.7

Bunge y Born S.A. General manufacturing FY88 40.0 - 24.0 - 24.0

Carboclor Industrias Quimica S.A.I.C." Chemicals and

petrochemicals FY89 - - 0.6 - 0.6

Cattorini Hnos. S.A."# General manufacturing FY86 - - 0.5 - 0.5Cencosud, S.A."* Industrial services FY89 - - 0.7 - 0.7

Cerrmica Psar S.A.C.I.- General manufacturing FY86 - - 0.5 - 0.5

Chihuidos Oil Exploration Program Energy FY89 5.0 - - 5.0 5.0

Chirete/Morillo/Olleros Oil Exploration Program Energy FY88, 92 6.6 - - 6.6 6.6

Cia Industrial Lanera S.A. (Cilsa)-" Textiles FY88 - - 0.1 - 0.1

Ciervos Argenitinos S.A."* Food and agribusiness FY89 - - 0.2 - 0.2

Clinica Oftalmol6gica Las Mercedes S.A." Industrial services FY89 - - 0.3 - 0.3

Colortex S.A." Textiles FY88 - - 0.7 - 0.7

Comesi S.A.I.C.** General manufacturing FY89 - - 1.2 - 1.2

Compafiia General de Iioversiosses Financial services FY89 0.1 - 0.1 - 0.1

Compahiia Sudamericana BTB S.A.- Industrial equipment

and machinery FY86 - - 0.6 - 0.6

Corporaci6n de Inversiones y Privatizaci6n S.A. Financial services FY90 0.1 - - 0.1 0.1

CorporaciOn General de Aliineoitos Noroeste, S.A.-" Food and agribusiness FY88 - - 0.3 - 0.3

Diario La Nueva Provincia S.R.L.-" Timber, pulp, and paper FY86 - - 0.4 - 0.4

Finca Flichman, S.A." General manufacturing FY88, 89 - - 0.6 - 0.6

Fracchia Hnos. S.A.- Industrial services FY89 - - 0.8 - 0.8

Frigorifico Rioplatense S.A.I.C.l.F Food and agribusiness FY92 13.0 6.0 12.0 1.0 13.0

Frigoriico Toba, S.A.** Food anid agribusiness FY90 - - 0.4 - 0.4

112 INVESTMENT PORTFOLIO

International Finance Corporation

I N V E S T M\4 E N T P o RT F OL I o

June30, 1992Expressed in millions of United States dollars Ongind Inves"ens heWfor the Corporadon

hsoyears COnm itU (incltdng ledsdz a sedlbat nae )iewhichasmfrumwent Tota Toad Equt Toate?is

Countn, regnn or other area nd oblior Sotor were made LFC syndicaions Loans (ascost) andeauily

Argentina, continued

Hidra Oil Developmenat Project Energy FY87, 90 68.3 30.6 16.0 - 16.0Industrias Quimicas Lauri S.A.' Chemicals and

petrochemicals FY89 - - 0.5 - 0.5

Inta S.A." Textiles FY89 - - 1.2 - 1.2

Ipako Industrias Petroquimicas Argentinas S.A. Chemicals and FY79, 82,petrochemicals 87, 92 24.8 9.0 1.0 7.0 8.0

Juan Minetti S.A. Cement and FY78, 81,construction materials 86, 87 31.0 17.5 16.2 - 16.2

Jugos del Sur, S.A." Food and agribusiness FY92 - - 0.6 - 0.6Ktaukol S.A.** Cement and

construction naterials FY86 - - 0.1 - 0.1

Labelcor S.A." Food and agribusiness FY86 - - 0.2 - 0.2

Longvie Parana, S.A.tt General manufacturing FY88 - - 0.3 - 0.3M.A. Soprano S.A.* Timber, pulp, and paper FY89 - - 0.4 - 0.4

Maleic S.A-* Chemicals andpetrochemicals FY89 - - 0.4 - 0.4

Malteria Pampa S.A." Food and agribusiness FY89 - - 0.4 - 0.4Massuh S.A. Timber, pulp, and paper FY78, 85,

86, 88, 91 28.7 - 14.2 4.2 18.4

MBA Sociedad de Bolsa S.A. Capital markets FY92 0.2 - - 0.2 0.2Oleaginosa Oeste, S.A. Food and agribusiness FY92 20.0 15.0 20.0 - 20.0Parafina del Plata, S.A." Chemicals and

petrochemicals FY89 - - 1.5 - 1.5Pastoril Santiaguena S.A."

5Food and agribusiness FY89 - - 0.7 - 0.7

Petrolera Argentina San Jorge SA. Energy FY92 17.0 - - 17.0 17.0Petroquimica Cuvo S.A.I.C. Chemicals and

petrochemicals FY84 21.6 20.5 10.6 4.0 14.6Petroquimica Ensenada S.A. (Petroken) Chemicals and

petrochemicals FY90 20.0 11.0 20.0 20.0Piedra Grande*" Mining FY86 - - 0.2 - 0.2

Productos Pulpa Moldeada, S.A.I.C.Y Timber, pulp, and paper FY88 - - 0.7 - 0.7Productos Stani, S.A.I.C.*S Food and agribusiness FY86 - - 0.4 - 0.4Quimica Estrella San Luis, S.A." General manufacturing FY89 - - 0.8 - 0.8Roberts Participaciones S.A. (Ropasa) Capital markets FY86 - - - 0.1 0.1S.A. de Inversiones de Capital de Riesgo Capital markets FY86 2.0 - - 2.0 2.0S.A. Garovaglio y Zorraquin Chemicals and

petrochemicals FY87 13.0 - 7.6 - 7.6

S.A. Genaro Garcia"' Food and agribusiness FY92 - - 1.5 - 1.5

San Sebastitn S.A.I.C.I.F. yA.** Food and agribusiness FY88 - - 0.7 - 0.7

Santa Ursula S.A.** Food and agribusiness FY86 - - 0.3 - 0.3

TBR, S.A.- Industrial equipanenitand machinery FY91 - - 0.5 - 0.5

Terminal 6 S.A. Industrial services FY87,90,91 12.5 - 8.5 - 8.5Tevycom Fapeco S.A." Industrial equipment

and machinery FY88 - - 0.2 - 0.2

Valley Evaporating Company, S.A."' Food and agribusiness FY88 - - 0.3 - 0.3

Vandenfil, S.A.I.C.I.F. yA."w Iectiles FY88 - - 0.3 - 0.3

326.5 56.9 383.4

BarbadosCaribbean Financial Services Corporation Capital markets FY84 0.3 - - 0.3 0.3Town and Commercial Properties Limited Tourism FY87 1.3 - 1.0 - 1.0

10 0.3 1.3

BelizeJourneys End Caribbean Club Limited Tourism FY91 1.0 - 1.0 - 1.0

1.0 - 1.0

113

International Finance Corporation

I NVE S TM E N T P O RTF O L I O

June 30, 1992Expressed in millions of United States dollars o(gnnal 1nvesrmennhadfortheCorprao

F alyes conmets (dung undisbaured balances)m whidnwnirmftner Tota Total EquiiTolosm

Cotin"regionorotherarea.andobhtgor Sector sit made FC syndiatkns Loans (at cost) and equity

BoliviaBanco Industrial, S.A. Development financing FY76, 88,91 10.6 - 7.9 - 7.9Bermejo Petroleium Development & Exploration Energy FY91 9.9 - 4.0 5.9 9.9

Central Aguirre Portuaria, S.A. Industrial services FY92 2.5 - 2.2 0.4 2.5

Compafnia Minera Concepci6n S.A. Mining FY88 1.2 - - 0.4 0.4

Compaflia Minera del Sur, S.A. Nonferrous metals FY90 10.0 - 7.0 3.0 10.0

Empresa Miners Inti Raymi, S.A. Mining FY92 40.0 - 40.0 - 40.0Minproc Bolivia S.A. Nonferrous metals FY92 1.0 - 0.3 0.7 l.0

Plasmar, S.A. General manufacturing FY73 0.1 - - 0.1 0.161.4 10.4 71.8

BrazilA.napa Florestal e Celulose S.A. - AMCEL Timber, pulp, and paper FY87 14.0 - 12.6 - 12.6

Bahia Sul Celulose, S.A. Timber, pulp, and paper FY90, 91 61.0 - 40.0 21.0 61.0Banco Bozano, Simonsen SA. Capital markets FY88 20.0 - 15.0 - 15.0

Banco Bradesco, S.A. Capital markets FY92 60.0 - 60.0 - 60.0Banco Itau S.A. Capital markets FY88 29.1 - 21.8 - 21.8

Brasilpar Comercio e Participaqoes S.A. Capital markets FY81 1.2 - - 0.6 0.6Brasital S.A. pars a lndustria e o Comercio Textiles FY88 0.1 - 0.1 - 0.1

Cebrace - Companhia Brasileita de Cristal Industrial equipmentand machinery FY88 45.0 - 28.0 5.0 33.0

Cimento Caue S.A. Cement andconstruction materials FY82, 87 23.0 - 6.2 3.3 9.4

CIMINAS - Cimento Nacional de Minas, S.A. Cement andcotstructioin materials FY72,81,87 49.5 110.0 6.7 - 6.7

Companhia Alcoolquimica Nacional - Alcoolquimica Chemicals andpetrochemicals FY84 15.7 - 1.7 3.7 5.4

Companhia Brasileira cle Agropecudria - COBRAPE Food and agribusiness FY81 8.0 - 3.5 0.5 4.0Companhia Vidraria Santa Marina Industrial equipment

and machinery FY91 15.0 10.0 15.0 - 15.0

COPENE - Petroquimica do Nordeste S.A. Chemicals andpetrochemicals FY89 45.0 5.0 45.0 - 45.0

Dende do Para S/A-DENPASA-Agricultura,Industria e Comercio de Oleaginosas Food and agribusiness FY80 4.5 - 0.7 1.0 1.7

Duratex, S.A. Timber, pulp, and paper FY88 7.4 - 5.4 - 5.4Eluma S.A. Industria e Comercio Nonferrous metals FY89 15.0 - 13.0 - 13.0

Empresa cde Desenvolvimento de Recursos Minerais(CODEMIN) S.A. Iron and steel FY73, 78, 83 9.3 - - 4.3 4.3

Engepol Engenharia de Polimeros General manufacturing FY91 3.5 - 3.5 - 3.5Equity Fund of Brazil Financial services FY88 18.4 - - 16.6 16.6Fxcel Indulstria e Participas6es S.A. (EXCEL) General manufacturing FY92 25.0 - 20.0 5.0 25.0

Fabrica Carioca de Catalisadores S.A. Chemicals andpetrochemicals FY88 20.5 - 12.3 - 12.3

Fabrica de Tecidos Tatuape S.A. Textiles FY74, 88 8.8 - 7.0 - 7.0Mineracoes Brasileiras Reunidas S.A. Iron and steel FY88 20.0 - 14.3 - 14.3Nitroclor Produtos Quimicos S.A. Chemicals and

petrochemicals FY86 7.5 - 0.6 5.7 6.3Papel a Celulose Catarinense, S.A. limber, pulp, and paper FY66, 69,89 15.0 - 12.7 - 12.7Perdigao S.A. Comercio a Industria Food and agribusiness FY88 20.0 - 14.3 - 14.3

Petroquimica Triunfo S,A Chemicals andpetrochemicals FY82, 88 13.7 - - 3.1 3.1

PISA -Papel de Imprensa S.A. Timber, pulp, and paper FY83, 85, 88 42.8 - 22.0 7.2 29.2Polisul Petroquimica S.A. Chemicals and

petrochemicals FY80, 87 21.0 - 28.0 6.0 6.0Politeno Linear Industria e Comercio de Produtos Chemicals and

petrochemicals FY89 25.0 - 18.5 6.5 25.0

PPH - Companhia Industrial de Poliopropileno Chemicals andpetrochemicals FY80, 88 32.6 - 14.7 1.6 16.3

114 INVESTMENT PORTFOLIO

International Finance Corporation

I NVE S T M E N T P O RT F O L I O

June 30, 1992Expressed in millions of United States dollars Original Irwesncmets leleifor the CGororation

Fiscalsvars corn mhmenrt (inludsigrundisbursodebalones)in wrhscearn omnts Total Tohd Equity Totdloans

Countyn region or otherarea, and obligor Setor wae mde IFC sjnsdsUtins loatns (atcost) andequity

Brazil, continuedQuimica da Bahia Indulstria e Comercio S.A. Chemicals and

petrochemicals FY85 2.3 - 0.1 1.8 1.9Ripasa S.A. Celulose e Papel Timber, pulp, and paper FY91 25.0 - 20.0 5.0 25.0S.A. Moiiho Santista Industrias Gerais Textiles FY88 4.0 - 3.2 - 3.2Santista Industria Textil de Sergipe S.A. Textiles FY88 4.5 - 2.6 1.3 3.9SOCOCO S/A - Agroindustrias da Amazonia Food and agribusiness FY83 5.5 - - 2.5 2.5Sotave Amazonia Quimica e Mineral S.A. Fertilizers FY81, 83 18.2 14.2 - 14.2Sao Paulo Alpargatas S.A. Textiles FY87 30.0 - 22.0 - 22.0The Brazilian Investment Fund, Inc. Finanicial services FY92 3.0 - - 3.0 3.0Toalia S.A. IndustriaTextil Textiles FY88 1.9 - 1.5 - 1.5Unibanco - Uniao de Bancos Brasileiros S.A. Capital markets FY88 24.8 - 18.6 - 18.6

496.6 104.7 601.4

ChileBosques yMaderas S.A. Timber, pulp, and paper FY92 7.5 6.0 5.5 2.0 7.5Cape Horn Methanol Ltd. Chemicals and

petrochemicals FY86, 88 52.5 - 37.9 5.0 42.9Celulosa Arauco y Constituci6n S.A. Timber, pulp, and paper FY87, 88, 89 85.0 45.5 75.5 - 75.5Celulosa del Pacifico, S.A. Timber, pulp, and paper FY90 50.0 33.0 40.0 10.0 50.0Compania de Carbones de Chile COCAR S.A. Mining FY86 11.7 - - 2.2 2.2Compania de Telefonos de Chile S.A. Industrial services FY91 89.5 113.0 80.0 - 80.0Exportadora Frutas Naturales de Chile Ltd." Food and agribusiness FY91 _ - 1.1 1.1Fibranova S.A. Timber, pulp. and paper FY92 17.5 - 16.0 1.5 17.5Hidroelectrica Aconcagua S.A. Industrial services FY92 20.0 6.0 14.0 6.0 20.0International Investment Company of Chile S.A. Financial services FY90 3.8 - - 3.8 3.8Investment Management Company Financial services FY88 0.1 - - 0.1 0.1Leasing Andino S.A. Capital markets FY91 5.0 5.0 3.5 - 3.5Minera Escondida Limitada Nonferrous metals FY89 70.5 - 43.3 15.0 58.3Nature's Farm Products (Chile) S.A.** Food and agribusiness FY91 - - 3.0 - 3.0T'he Chile Investment Company S.A. Financial services FY88 4.7 - 4.7 - 4.7

319.7 50.2 369.9

ColombiaAmericana de Curtidos Limitadar General manufacturing FY90 t - t - tCarbones del Caribe, S.A. Mining FY84, 87 12.8 - 3.2 - 3.2Cementos Rioclaro S.A. Cement and

construction materials FY84 3.4 11.0 0.6 1.4 2.0Compafifa Colombiana de Tejidos Textiles FY63, 91 22.5 - 22.5 - 22.5Corporaci6n Finandera del Valle Development financing FY69. 83, 88 2.3 - - 2.3 2.3Corporaci6n Financiera delValle* Development financing FY88 7.5 - 0.1 2.3 2.4Enka de Colombia, S.A. Textiles FY67, 70, 74,

85, 86, 87, 89 36.5 16.6 30.8 - 30.8Fdbricas Colombianas de Materioles Electricos, S.A.`0 Industrial equipment

and machinery FY88 - - 0.3 - 0.3Frigorificos Colombianos S.A. Industrial services FY83 1.4 - 0.7 - 0.7Ingenio Pichichi, S.A.** Food and agribusiness FY90 - - 0.3 - 0.3Leasing Bolivar, S.A. Capital markets FY81, 85, 87,

90,91, 92 5.4 1.0 0.2 0.2 0.4Oleoducto de Colombia S.A. Industrial services FY91, 92 55.0 75.0 55.0 - 55.0Papeles Nacionales, S.A.`4 Timber, pulp, and paper FY90 - - 0.3 - 0.3Petr61eos Colombianos Limited Energy FY81, 82 6.6 9.0 1.8 3.4 5.2Polimeros Colombianos, S.A.*, Textiles FY88 - - 0.8 - 0.8Polyban Internacional, S.A." General manufacturing FY90 - - 0.6 - 0.6Productos Derivados de la Sal, S.A. (PRODESAL) Chemicals and

petrochemicals FY87 7.2 - 3.2 1.2 4.4Promotora de la Interconexi6n de los Gasoductos

deolaCosta Atlantica S.A. Industrial sCrVices FY77, 89 10.0 - 9.7 2.0 11.7

115

International Finance Corporation

I N V E S T M E N T P O R T F O L I O

June 30, 1992Expressed in millions of United States dollars Ongnal Irnesnents ehldjfor the Corporation

ksnwynvrs commitmensl ("ihng nldisbursed balances)in whichcorinrenitsen Total Tot Fqujtv Totalksns

GunTy, Trgion or other area, and obligor Sector were made IFC vndimions Loans (a cosm) and eqiity

Colombia, continuedProteinas del Pacifico, S.A." Food and agribusiness FY88 - - 0.2 0.2Salpa de Colombia, S.A.0* General manufacturing FY90 - - 0.3 - 0.3

t29.6 13.8 143.4

Costa RicaCorporacion Banex, S.A. and

Banex Internacional, S.A. Capital markets FY91 5.9 - 5.0 0.9 5.9

5.0 0.9 5.9

DominicaFort Young (1986) Ltd. Tourism FY89 0.7 - - 0.7 0.7

- 0.7 0.7

Dominican Republic

Compantia Dominicana de Leasing, S.A. Capital markets FY84 0.5 - - 0.1 0.1

Desarrollos Turisticos del Caribc, S.A. Tourism FY92 10.0 - 10.0 - 10.0

ProductoraNacional deAlgod6n, C. por A. Food and agribusiness FY83 1.8 - 1.4 0.7 2.1

Sociedad Comnercializadora S.A. Cement and

construction materials FY90 0.1 - - 0.1 0.1

lransamerican Hoteles, Dechiaro, Siskind,

Vincent & Co. S. en C. por A. Tourism FY87 6.0 - 3.7 - 3.7

Zona Franca San Isidro S.A. Industrial services FY90 6.0 - 5.9 - 5.9

21.0 0.9 21.8

Ecuador

Compafria Financiera Ecuatoriana de Desarrollo, S.A. Development financing FY69, 73. 77,

81, 82, 88 4.6 - 4.0 0.4 4.4

4.0 0.4 4.4

Grenada

Issa Nicholas (Grenada) Limited Tourism FY86 4.5 - 3.4 - 3.4

3.4 - 3.4

Honduras

Granjas Marinas San Bernardo S.A. de C.V. Food and agribusiness FY87 0.6 - - 0.6 0.6

Textiles Rio Lindo, S.A. de C.V Textiles FY78 4.0 - 2.1 1.0 3.1

2.1 1.6 3.6

Jamaica

Jamaica Citizens Bank Limited Capital markets FY89 5.0 - 3.0 - 3.0

Mutual Security Bank Limited Capital markets FY89 3.3 - 2.3 - 2.3

St. Mary Banana Estates Limited Food and agribusiness FY87, 92 4.9 - 3.4 1.2 4.6

The Falcon Fund (1985) Limited Financial services FY86 1.4 - 0.3 - 0.3

9.0 1.2 10.1

MexicoAislawites de Ledn, S.A. de C.V (ALSA) Autotnotive/accessories FY92 17.0 - 10.0 0.9 10.9

Apasco, S.A. de C.V Cement and

construction materials FY88, 91,92 167.2 - 38.7 20.0 58.7

Banca Serfin, S.N.C. Capital markets FY89, 90 60.0 - 60.0 - 60.0

Banco Mercantil del Norte, S.N.C.* Capital markets FY92 20.0 - 20.0 - 20.0

Banco Nacional de Mexico, S.N.C. Capital niarkets FY90 60.0 10.0 50.0 - 50.0

Bancomer, S.N.C. Capital markets FY90 20.0 - 20.0 - 20.0

Calizas industriales del Carmen, S.A. de C.V Mining FY88, 92 32.0 - 32.0 - 32.0

Celular de Telefonia, S.A. de C.V. Industrial equipment

and machinery FY92 16.0 37.0 15.0 1.0 16.0

Celulosa y Papel de Durango, S.A. de C.V. Timber, pulp, and paper FY86 13.1 - 10.0 3.1 13.1

116 INVESTMENT PORTFOLIC

International Finance Corporation

I N V E S T M E N T P O R T F OL I O

June 30, 1992Expressed in mnillions of United States dollars Otigil InvestTments heldfor te Corpioratio

Fisall!ctrS comm1 m sc (lzncuingundi ibu e s)in whichcotnrsitrTits Total Total Equity Total kob

Counmty,regonorotherarea andobliger Secto ivere made 1FC synaications Loans (at cost) and equity

Alexico, continued

Cemex Group Cement andconstnrction materials FY89 20.0 - 20.0 - 20.0

Conductores Monterrey, S.A. Industrial equipmentand machinery FY79, 91 5.7 - 4.2 - 4.2

Fuinento Economico Mexicano S.A. de C.V. (Visa) General manufacturing FY89 80.0 - 68.8 22.1 90.8Grupo Condumex S.A. de C.V. General manufacturing FY90, 92 44.5 18.0 35.0 9.5 44.5Grupo Financiero Probursa, S.A. de C.V. Capital markets FY92 7.5 - - 7.5 7.5Grupo Industrial Biunsbo, S.A. de C.V. Food anid agribusiness FY92 25.0 75.0 25.0 - 25.0Grupo Primex, S.A. de C.V. Chemicals and

petrochemicals FY85, 90 26.0 - 20.0 - 20.0Hotel Camino Real Ixapa, S.A. Tourism FY79, 81, 87 4.2 - - 4.2 4.2Inde1pro S.A. de C.V. Chemicals and

petrochemicals FY90 27.0 3.0 27.0 - 27.0Industrias Sulfamex, S.A. de C.V. Fertilizers FY87 2.5 - 0.9 - 0.9Metalsa, S.A. Autonsotive/accessories FY84, 88 9.4 - 3.8 - 3.8Petrocel, S.A. Chemicals and

petrochemicals FY91 32.0 - 32.0 - 32.0Polimar, S.A. de C.V. Chemicals and

petrochemicals FY89, 92 19.1 - 16.9 - 16.9

Salumi, S.A. de C.V Food and agribusiness FY88 22.1 - 9.5 - 9.5Scaled Power Me.dcana, S.A. de C.V. Automotive/accessories FY88 9.0 - 4.5 - 4.5The Mexico City Toluca Toll Road Industrial services FY92 13.7 - 9.9 - 9.9Ulniversal de Valores, S.A. de CG. Food and agribusiness FY8 1 5.1 - - 1.7 1.7Vidrio Plano de Mxico, S.A. and Vitro Flotado, S.A. Industrial equipment

and machinery FY80 15.0 - 1.8 - 1.8

Vitro Flotado, S.A. de C.V. Industrial equipmentand machinery FY91 25.0 101.0 25.0 - 25.0

Vitro S.A. General manufacturing FY92, 91 8.0 - 10.2 10.2Vulica Shipping Company Ltd. Industrial services FY88 18.0 - 18.0 - 18.0

577.9 80.1 658.0

PanamaBanco Latinoamericano de Exportaciones, S.A. Capital markets FY79. 85,

86, 88 45.5 - 5.0 2.2 7.2

5.0 2.2 7.2

Paraguay

Sociedad Agricola Golondrina S.A. Food and agribusiness FY82 6.0 - 2.3 - 2.32.3 - 2.3

Peru

Compahiia de Cemento Pacasmayo, S.A. Cement andconstruction materials FY64 0.1 - - 0.1 0.1

Compaefia de Minas Buenaventura, SA. Mining FY79, 83, 90 6.1 - - 2.1 2.1Compafiia de Minas Orcopampa, S.A. Mining FY86 9.0 - 2.3 - 2.3Consorcio Energ&tico de Huancavelica, S.A. Tndustrial services FY82 4.5 - 0.7 - 0.7S.A. Minera Regina Nonferrous metals FY85 1.7 - 2.5 0.1 2.6Sogewiese Leasing, S.A. Capital markets FY82, 92 9.5 5.0 5.0 1.4 6.4

10.5 3.7 14.2

Saint Lucia

Club St. Lucia (Smugglers Village) Limited Tourism FY91 3.7 - 3.6 - 3.63.6 - 3.6

Trinidad and Tobago

Development Finance Limited Dcvelopment financing FY89, 92 0.6 - - 0.6 0.6

Home Mortgage Bank Capital markets FY87 0.4 - - 0.4 0.4

117

International Finance Corporation

I NVE S TM EN T P O RT F O L I O

June 30, 1992Expressed in millions of United States dollars Olgind Inva thedfisr thecorpoan

FL,calyrar WClninietsfY (icldingiryisuxdblne)in whichc int"imis TOW Total Fquiy Totbans

&untri reio or otfif iarn', aemldbligor Sa7or strrinack flC id&azns Tens (atan) anleiuity

Trinidad and Tobago, continuedTrinidad Nitrogen Company Limited Fertilizers FY87 33.2 150.0 22.0 - 22.0

22.0 1.0 23.0

UruguayAstra Pesquerias Uruguayas S.A. Food and agribusiness FY79, 83, 86 7.4 - 7.3 - 7.3Azucitrus S.A. Food and agribusiness FY85 10.3 - 9.0 2.4 11.4Banco Surinvest S.A. Capital markets FY80, 89 10.6 - 0.4 1.8 2.2Granja Avicola Moro Food and agribusiness FY92 3.8 - 3.8 - 3.8Migranja S.A. Food and agribusiness FY90 4.4 - 2.4 2.0 4.4

22.9 6.2 29.1

VenezuelaC.A. \'enezolana de Cementos Cement and

construction materials FY88 10.0 - 9.3 - 9.3Corporaci6n Corkem, C.A7" Chemicals and

petrochemicals FY92 - - 1.3 - 1.3Corporacion Industrial Montana, C.A., S.A. Chemicals and

petrochensicals FY91, 92 25.4 - - 21.0 21.0Eka Nobel de Venezuela C.A. Chemicals and

petrochemicals FY91 14.3 18.0 14.3 - 14.3Grupo Zuliano, C.A. Chemicals and

petrochlenicals FY92 13.0 - - 13.0 13.0Mavesa, S.A. Food and agribusiness FY92 9.0 - - 9.0 9.0Operaciones al Sur del Orinoco Iron and steel FY89 37.4 35.8 29.4 29.4Polipropileno de Venezuela, S.A. Chemicals and

petrochemicals FY89 40.0 7.0 40.0 - 40.0Productora de Alcoholes Hidratados, C.A. Chemicals and

petrochemicals FY91 39.4 2.0 30.8 8.6 39.4Sociedad Financiera Mercantil C.A. Capital markets FY91 20.0 - 20.0 - 20.0

145.0 51.6 196.6

RegionalLatin American Capital Fund Ltd. Financial serviccs FY92 5.0 - - 5.0 5.0New VorldlnvestmentFund Financial services FY89 12.5 - - 8.3 8.3

- 13.3 13.3

Total for Latin America and the Caribbean 2,169.4 399.8 2,569.2

MIDDLE EAST ANL) NORTH AFRICA

Egypt (Arab Republic of)Al Bardi Paper Mill Company (S.A.E.) Timber, pulp, and paper FY91 6.2 - 6.2 - 6.2Alexandria National Iron & Steel Company S.A.E. Iron and steel FY84, 91 4.6 - - 4.6 4.6Aluminum Sulphate Company of Egypt S.A.E. Chemicals and

petrochemicals FY86 0.6 - - 0.6 0.6Arab Ceramic Company S.A. Cement and

construction materials FY76, 82 5.6 - - 1.0 1.0Bechtel Egypt S.A.E. Industrial services FY88 0.1 - - 0.1 0.1Crocodile Tourist Project Company SAE Tourism FY82, 89 3.0 - - 1.4 1.4Delta Sugar Company S.A.E. Food and agribusiness FY78, 83 14.5 - - 2.5 2.5Egyptian Tourism Investment Company, S.A.E. Financial services FY92 2.0 - - 2.0 2.0Ismailia Misr Poultry Company, S.A.E. Food and agribusiness FY79, 83 1.6 - - 1.6 1.6Meleiha Oil Development and Exploration Project Energy FY87, 88 28.7 - 17.8 17.8Misr Compressor Manufacturing Co., S.A.E. Industrial equipment

and machinery FY92 16.8 - 13.8 3.0 16.8

118 INVEStMENT PORIFOL10

International Finance Corporation

I N VE S T M E N T P O RT F O L I O

lune 30, 1992Expressed in millions of United States dollars Ongino ITmes ssheloforztiecooraoton

risalyears cornrnent (induingundisbursedbn)in Whichaammi a t roWo Fquity Ttalloans

Coutuy regio or other area, and obigor S9or werenwode IFC sydisaons Loans (at cost) andequity

Egypt (Arab Republic of), contintuedMisr Financial Investment Company Capital markets FY85 0.5 - - 0.1 0.1Phoenix Resources Company of Egypt Energy FY88 20.0 - 6.4 - 6.4Pioneer Egypt Edible Oil Company S.A.E. Food and agribusiness FY92 1.2 - - 1.2 1.2Serena Beach Hotel S.A.E. Tourism FY92 8.7 - 7.5 1.2 8.7Suez Cement Company Cement and

construction materials FY81 30.0 - 1.7 - 1.7Victoria United Hotels Company (SA.E.) Tourism FY91 5.8 - 5.3 0.5 5.8

41.0 37.5 78.5

JordanAl-Hikma Pharmaceuticals (Jordan), Limited General manufacturing FY87, 91 4.2 - 1.2 2.0 3.2

1.2 2.0 3.2

MauritaniaMines d'Or d'Akjoujt, S.A. Mining FY91 4.2 - 3.4 0.8 4.2

3.4 0.8 4.2

MoroccoBanque Commerciale du Maroc, S.A. (BCM) Capital markets FY92 12.0 21.0 12.0 - 12.0Banque Marocaine du Commerce Ext6rieur, S.A.

(BMCE) Capital markets FY92 12.0 21.0 12.0 - 12.0Banque Nationale pour le Developpement Development financing FY63, 78,

Economique 84,86 46.7 - 34.1 1.5 35.6C6rame Afrique Industries Cement and

construction materials FY91 5.5 - 3.9 1.7 5.5Cimenterie Marocaine de Safi (CIMASFI) Cement and

construction materials FY92 17.3 5.2 17.3 - 17.3Cimenterie Nouvelle de Casablanca - Cinouca, S.A. Cement and

constructionmaterials FY82,83,92 30.8 5.8 15.5 - 15.5Compagnie Maritime Maroco-Norv6gienne

(COMARIT) Industrial services FY89 4.3 2.0 2.8 - 2.8CrMdit du Maroc, S.A, (CDM) Capital markets FY92 8.0 14.0 8.0 - 8.0Cr6dit Immobilier et Hotelier Development financing FY87, 90 67.5 78.0 67.6 - 67.6Fruitiere Marocaine de Transformation (FRUMAT) Food and agribusiness FY86 7.6 - 4.9 - 4.9Settat Filature (SETAFIL) Textiles FY88 4.4 - 3.4 0.9 4.3Socite ENNASR de Peche Food and agribusiness FY91 0.3 - t - tSocite Miniere du Bou-Gaffer (SOMIFER) Nonferrous metals FY80 15.3 - - 2.3 2.3Wafabank, S.A. (WAFA) Capital markets FY92 8.0 14.0 8.0 - 8.0

189.5 6.5 196.0

OmanOman Development Bank S.A.O. Development financing FY79 2.0 - - 1.0 1.0

- 1.0 1.0

TunisiaAdwya S.A. General manufacturing FY87, 91 2.7 - 2.1 t 2.2Banque de Developpement Economique de Tunisie Development financing FY66, 70, 78 1.7 - - 1.2 1.2Banque National de Dtveloppement Touristique Development financing FY69 2.2 1.2 - 1.1 1.1Comete Engineering Industrial services FY87 t - - t +

Rozzi Ediizzia Industrializzata de Tunisie (REIT) Industrial equipmentand machinery FY87 1.9 - 1.5 0.4 1.9

Soci6t6 des Industries Textiles R6unies, S.A. Textiles FY88 5.0 - 2.9 2.1 5.0Societe Industrielle des Textiles (SITEX) Textiles FY86, 92 13.2 - 7.8 2.2 10.0Societe Miniere de Bougrine (SMB) Nonferrous metals FY92 16.3 - 14.0 2.3 16.3Societe Monastirienne Internationale des Textiles Textiles FY91 4.9 - 4.0 1.2 5.3

119

International Finance Corporation

I NVE ST M ENT P O RT F o l. I O

June 30, 1992Expressed in millions of United States dollars Orginal InmeosmentsheldfortheCoaporaion

Fslyea-s coromntntents (in udingusnt bsursedbala on,e)in which __

carnmrin7stts Tod Totd Equily TotalloansCo ,tryregionorotherarea,andobligor Sector tveremade MFC syniabons Loans (atcost) and ea,;ity

Tunisia, continuedSocietes d'Etudes et de D&veloppement

de Sousse Nord Tourism FY73, 75 3.1 - - 0.6 0.632.3 11.2 43.5

Yemen, Republic ofMarib Agriculture Company, Y.S.C. Food and agribusiness FY87 2.7 - 2.4 - 2.4Yemen Battery Marufacturing Company, Y.S.C. General manufacruring FY84, 85 3.8 - 3.3 - 3.3

5.7 - 5.7

Total for Middle East and North Africa 273.0 59.1 332.0

WORLDWIDE

WorldwideAlgemene Bank Nederland N.V.

(Multicountry Loan Facility)* Capital markets FY90 25.0 25.0 22.0 - 22.0Banque Indosuez (Multicountry Loan Facility)' Capital markets FY90 25.0 25.0 25.0 - 25.0Banque Nationale de Paris

(Multicountry Loan Facility)* Capital markets FY91 25.0 25.0 25.0 - 23.0Commonwealth Equity Fund Limited Financial services FY91 5.0 - - 5.0 5.0Credit Lyonnais (Multiccountry Loan Facility)" Capital markets FY91 25.0 25.0 23.8 - 23.8Emerging Markets Growth Fund, Inc. Financial services FY86, 88 18.9 - - 6.5 6.5

EmergingMarkets Investment Fund Financial services FY88 10.0 - 10.0 10.0NIB (MulticountryLoan Facility)* Capital markets FY90 25.0 37.5 18.9 - 18.9

114.7 21.5 136.2

Total Worldwide 114.7 21.5 136.2

Total for International Finance Corporation 5,423.7 999.0 6,422.7

'Financial irtermediary through which IFC makes loans to, ard equity investments in, various small-scale companies,

- Subproject untder atn agenscy lne or a multicountry loan facility. The corresponding comesitneont is shown for the ageon

t Less than $50,000.

1. Commitments indcudefinds to be provided by IFC for its own account funds to be provided byparticipamts through the purchase ofan tnterest in rFCs investn ent, and funds

to be provided by orherfinancial institutions in association with IFC, where IFC has rendered material assistance in mobilizing thiosefinds. Original comnmitments are composed

ofdisbursed and uadisbursed balances. The undisbursed portion is revalued at curretnt exchange rates while tho disbursed portion represents the cost of the comamitment at the

time of4disbursement. Loans held for the Corporation are revalued at the current exchange rates. Anrounts shown arefor currently outstanding commitmens, net of cancellations.

2. Represents invesrments made at a time when the authorities on Taiwan represented China in the Corporation (before May 15, 1980).

N a t e: The operatioral investments are represented by loans and equity, as stated. In addition, is certain ineestmenrs, the Corporation has the right to acquire shares and/or

participate in the profits ofthe enterprise.

120 INVESTMENT PORTFOL1O

International Finance Corporation

S TATE M E NT O F C U M U LAT IVE C O M M IT M E NT S

Jitne 30, 1992In thousands of U S. dollars

Cumulative commttmee,nS] Cum ulative tuonmtmoe'te,t

C,untry, region Number o Country. regin Nubl-er ofno otto' area Compan"ies fTc Slydtcaiot- Total or eter are C-tpaue, IFC Sytdicut;o" Totai

Afghanistan 1 322 322 Madagascar 6 37,601 37,601Argentina 59 671,924 2D3,586 875,510 Malawi 7 32,594 - 32,594

Australia 2 975 - 975 Malaysia 10 43,976 16,307 60,283

Bangladesh 6 15,329 6,155 21,484 Mali 3 3,048 - 3,048

Barbados 2 1,550 - 1,550 Mauritania 2 14,642 9,558 24,200

Belize 1 1,000 - 1,000 Mauritius 9 31,987 98 32,085

Benin 1 310 - 310 Mexico 57 1.111,331 761,112 1,872,442

Bolivia 11 82,918 1,000 83,918 Morocco 19 266,653 201,914 468,567

Botswana 3 1,410 - 1,410 Nlozambique 2 10,250 - 10,250

Brazil 76 1,154,364 544,112 1,698,476 Nepal 2 8,094 - 8,094

Burkina Faso 1 542 - 542 Nicaragua 3 8,543 929 9,472

Burundi 1 5,878 - 5,878 Niger 1 2,267 - 2267

Cameroon 13 58,541 30,329 88,870 Nigeria 18 167,344 99,170 266,514

Chile 22 521,782 244,221 766,003 Ornan 1 2,029 - 2,029

China 5 60,523 - 60,523 Pakistan 32 304,642 131,987 436,630

Colombia 42 254,030 129,821 383,851 Panama 3 55,100 - 55,100

Cungo 4 7,925 - 7,925 Paraguay 4 15,008 - 15,008

Costa Rica 5 13,847 217 14,064 Peru 16 89,485 8,945 98 429

C6ted'lvoire 11 32,028 - 32,028 Philippines 38 335,508 129,766 465,274

Cyprus 5 13,470 597 14,067 Poland 4 82,716 7,578 90,294

Czechoslovakia 2 23,644 - 23,644 Portugal 8 43,047 17,061 60,107

Doininica 1 701 - 701 Rwvada 2 1,308 - 1,308

Dominican Republic 9 38,999 2,400 41,399 Saint Lucia 1 3,700 - 3,700

Ecuador 10 44,360 1,236 45,596 Senegal 9 55,417 755 56,172

Egypt, Arab Republic of 20 206,890 73,500 280,390 Seychelles 1 10,458 - 10,458

El Salvador 2 1,074 - 1,074 Sierra Leone 1 2,050 - 2,050

Ethiopia 4 20,078 3,490 23,568 Sonmalia 2 1,351 - 1,351

Fiji 4 20,792 - 20,792 Spain 5 19,048 1,685 20,733

Finland 4 1,075 2,073 3,148 Sri Lanka 8 25,896 13,615 39,510

Gabon 4 105,249 110,000 215,249 Sudan 6 26,511 6,489 32,999

Gambia, The 3 4,809 - 4,809 Swaziland 5 28,539 - 28,539

Ghana 15 123,824 110,000 233,824 Tanzania 6 17,088 986 18,074

Greece 7 26,006 41,107 67,113 Thailand 33 337,248 289,558 626,807

Grenada 1 6,000 - 6,000 Togo 5 12,358 - 12,358

Guatemala 3 18,200 - 18,200 Trinidad and Tobago 5 43,359 150,000 193,359

Guinea 4 23,443 - 23,443 Tunisia 15 67,690 2,324 70,015

Guinea-Bissau 2 6,050 - 6,050 Turkey 52 634,071 406,049 1,040,119

Guyana 1 2,000 - 2,000 Uganlda 6 15,836 1,588 17,425

Haiti 1 1,500 - Z,500 Uruguay 7 45,797 10,00 55,797

Honduras 4 5,697 6,101 11,798 Venezuela 17 234,261 74,755 309,016

Hungary 14 156,709 14,420 171,129 Yemen, Republic of 5 22,198 1,454 23,652

India 68 932,780 174,474 1,107,254 Yugoslavia 25 528,324 201,262 729,586

Indonesia 31 352,326 311,693 664,019 Zaire 8 49,249 - 49,249

Irai, Islaulic Republic of 7 34,343 8,193 42,536 Zambia 10 85,295 24,044 109,339

Israel 1 10,500 - 10,500 Zimbabwe 18 175,683 99,000 274,683

Italy 1 960 - 960 Regional Investments

Jamaica 10 36,010 926 36,936 Africa 2 4,493 1,940 6,433

Jordan 6 48,831 50,250 99,081 Asia 2 12,472 - 12,472

Kenya 16 111,449 35,667 147,116 LatinArnerica 2 17,500 - 17,500

Korea, Republic of 34 212,538 45,135 257,673 Worldwide Tnvestments 9 191,411 158,000 349,411

Lebanon 4 6,505 2,600 9,105 Other (Taiwan, China)2

2 8,444 1,400 9,844

Lesotho 2 454 - 454

Liberia 2 9,202 1 9,203 TOTAL 1,085 10,840,263 4,982,632 15,822,895

I. Cumulative commitments are conrposed of disbursed and undisbursed balances. The undisbtbrsed porton is revalued at currett exchange raes while the disbLersed portion

reprerntr thre cost of coeesnirinent at rit time of disbtn-senoert

2. Represents investments made at aime when the authorities on Taiwan represented China in the International Finance Corporanon (beforeMay 15. 1980).

121

G OVE RN OR S AND ALTERNATE S

As of June 30, 1992

MEMBER GOVERNOR ALTERNATE

Afghanistan Hamidullah Rahimi Mohammad EhsanAlbania Genc Ruli Robert CekuAlgeria Ahmed Benbitour Kacim BrachemiAngola Emmanuel M. Carneiro Sebastiao Bastos LavradorAntigua and Barbisda Molwvn Joseph Ludolph BrownArgentina Domingo Cavallo Roque FernandezAustralia John Dawkins John KerinAustria Ferdinand Lacina Hans Dietmar SchweisgutBahamas, The Paul L. Adderley Warren RolleBangladesh M. Saifur Rahman Enam Ahmed ChaudhuryBarbados L. Erskine Sandiffird George ReidBelgium Philippe Maystadt Alfons VerplaetseBelize Said W. Musa Joseph D. WaightBenin Robert Tagnon Rigobert LadikpoBolivia Samuel Doria Medina Raul BoadaBotswana Festus G. Mogae G.T StonehamBrazil Marcilio Marques Mvloreira Francisco GrosBulgaria Ivan Y. Kostov Emil HarsevBurkina Faso Frederic A. Korsaga Djiga Haby ToureBurundi Gerard Niyibigira Salvator NkeshimanaCameToon Tchouta Moussa Esther WangCanada Donald Mazankowski Marcel MasseCape Verde Jose Tomas Veiga Antonio Hilario Da CruzCentral African Republic 'l'hierry Bingaba Gregoire ZowayeChile Alejandro Foxiey Jose Pablo ArellanoChina WAang Bingqian Chi HaibinColombia Radolf Hommes Francisco J. OrtegaCongo Dieudonne Diabatantou Bernard TchibambelelaCosta Rica Rodolfo Mendez Mata Jorge Guardia QuirosCote d'lvoire Kablan D. Duncan N'Golo CoulibalyCyprus George Syrimis Michael ErotokritosCzechoslovakia Vaclav Klaus Josef TosovskyDenmark Uffe Ellemann-Jensen Henrik WoehlkDjibouti Moussa Bouralch Robleh Ibrahim Kassim ChehemDominica Mary Eugenia Charles Gilbert WilliamsDominican Republic Luis Toral Cordova Manuel E. Gomez PieterzEcuador Pablo Better Virginia Fierro RenoyEgypt, Arab Republic of Kamal El-Ganzoury Maurice Makram-AllahEl Salvador Mirna Lievano de Marques Jose Roberto Orellana MillaEquatorial Guinea Marcelino Nguema Ongoene Mannel-Enrique King SomoEthiopia ALemayehu Daba Israel Kidane MafiaosFiji Paul Manueli Rigamoto TaitoFinland liro Viinanen Toimi KankaanniemiFrance Jacques de Larosiere Jean-Claude TrichetGabon Emmanuel Ondo-Methogo Richard OnouvietGambia, The Bakary B. Dabo Alieu "A. NgumGermany Carl-Dicter Spranger Horst KoehlerGhana Kwesi Botchwey Kwesi Bekoe Amissah-ArthurGreece Stephanos Manos George VlachosGrenada George Ignatius Brizan Lauriston F. Wilson, Jr.Guatemala Richard Aitkenhead Castillo Juan Luis Miron AguilarGuinea Soriba Kaba Kerfalla YansaneGuinea-Bissau Filinto Barros Rui Dia de SousaGuyana Carl Greenidge Winston MurrayHaiti Wiener Fort Bonivert ClaudeIlonduras Benjamin Villanueva Ricardo Maduro JoestHungary Mihaly Kupa Imre TarafasIceland Ion Sigurdsson Fridrik SophussonIndia Manmohan Singh Montek Singh AblsnwaliaIndoniesia J.B. Suonarlii Hasudungan TampubolonIran, Islamic Republic of Mohsen Noorbakhsh Mehdi NavabIraq Tarik T.M. Al Tukmachi Hashim Ali ObaidIreland Bertie Ahern Sean P. CromienIsrael Jacoh A. Frenkel Shalom SingerItaly Carlo Azeglio Ciampi Mario DraghiJamaica Hugh Small Ormar DaviesJapan Tsutomu Hata Yasushi MienoJordan Ziad Fariz Ibrahim BadransKenya George Saitoti W. KoinangeKiribati Taomati Iuta Baraniko BaaroKorea, Republic of Yong-Man Rhee Soon Cho

122 GOVERNORSAND ALTERNATES

Kuwait Nasser Abdullah AL-Roudhan Bader Meshari Al-IlumaidhiLao People's Democratic Republic Sisavath Sisane Soulingong NhouyvanisvongLebanon Ali El-Khalil Habib Abu-SakrLesotho A.L. 'hoahlane T.N. ThokoaLiberia Amelia A. Ward Francis KarpehLibya Mohamed El Madni Al-Bukhari Bashir Ali KhallatLuxembourg Jean-Claude Juncker Yves MerschMadagascar Evariste Marsuii Gerard H. RabevohitraMalawi L.J. Chimango Ian BonongweMalaysia Anwar Ibrahim Mohd. Sheriff KassimMaldives Pathulla Jameel (vacant)Mali Boubacar Bah Oumar Ag TelfiMauritania Mohamedou Ould Michel Mohamed Lemine Ould DeidahMauritius Jean Claude de LEstrac Dharam Dev ManrajMexico Pedro Aspe Armella lose Aisgel GurriaMongolia Demchigjavyn Molomzhamts Dalrain DavaasambuuMorocco Mohamed Berrada Mohammed DairiMozambique Eneas da Conceicao Comiche Adriano Afonso MaleianeMyanmar D.O. Abel Win TinNamibia Zedekia Ngavirue Godfrey GaosebNepal Mahesh Acharya Sashi Narayan ShahNetherlands MV. Kok I.P. PrankNew Zealand Graham C. Scott Chris N. PinfieldNicaragua Emilio Pereira Silvio de FrancoNiger Laoual Chafani Ouhou Moudou MahamadouNigeria Ahmadu Abubakar (vacant)Norway Sigbjoern Johnsen Grete FaremoOman Qais Abdul-Munim Al-Zawawvi Mohammed Bin Musa Al YousefPakistan Sartaj Aziz R.A. AkhundPaneosiia Guillermo Ford B. Luis H. Moreilo, Jr.Papua New Guinea Paul Pora Gerca AopiParaguay Juan J. Diaz Perez (vacant)Peru Carlos Bolona Behr Alfredo Jalilie AwaparaPhilippines Jesus P. Estanislao Jose Cuisia, Jr.Poland Hanna Gronkiewicz-Waltz Witold KozinskiPortugal Jorge Braga de Macedo Jose M.F. BrazRomania George Danielescu Vladimir SoareRwanda Marc Rugcnera Felicien NtahondiSt. Lucia John G.M. Compton Bernard LacorbiniereSaudi Arabia Mohammad Abalkhail Hamad Al-SayariSenegal Famara Ibrahima Sagna Awa ThionganeSeychelles Daieielle dc St. Jorre Bertranid RassoolSierra Leone J.S.A. Funna Y.T. SesaySingapore Richard Hu Tsu Tau Ngiam Tong DowSolomon Islands Christopher C. Abe Snyder RiniSomalia Elmi Farah Nur Hussein Elabe FahieSouth Africa C.l. Stals Andre La GrangeSpain Carlos Solchaga Pedro PerezSri Lanka D.B. Wijetunga R. PaskaralingamSudan Abdul Rahim Mahmood Hamdi Mohamed Kheir El ZubeirSwaziland Solomon M. Dlamini Noreen N. MaphalalaSweden Anne Wibble AlfSvenssonSwitzerland (vacant) (vacant)Syrian Arab Republic Mohammed Khaled Maheayni Adnan Al-SatyTanzania Steven A. Kibona Peter J. NgumbuluThailand Panas Simasathien Pandit BunyapanaTbgo Aime Tchaboure Gogue Kwassi KlutseTonga James Cecil Cocker Selwyn Percy JonesTrinidad and Tobago Wendell Mottley T. Ainswvorth HarewoodTuntisia Mustapha Kamel Nabli AbdellatifSaddemTurkey TevfikAltinok Kemal KabatasUganda Joash Mayania Nkangi James KahozaUnited Arab Emirates Hamdan bin Rashid Al Maktoum Ahmed Humaid Al-TayerUnited Kingdom Robin Leigh-Pemberton Timothy LankesterUnited States Nicholas F. Brady Robert B. ZoellickUruguay Igioacio de Posadas Carlos A.CaLVanuatu Willie Jimmy Antoine PikouneVenezuela Ricardo Hausmann Pedro Rosas BravoViet Nam Cao Si Kiem Le Van ChauWestern Samoa Tuilaepa S. Malielegaoi Epa TuiotiYemen, Republic of Farag Bin Ghanem Anwar Ri7q Al-Hara7iYugoslavia Slavoljub Staniic Nikola JelicZaire Ilunga Ilunkamba Mbonga Magalu EngwandaZambia Emmanuel G. Kasonde James MtongaZimbabwe B.T.G. Chidzero K.J. Moyana

123

DI R E C TOR S AND ALT ER NATE S AND T H E I R V OT ING P OWE R

As ofJune30, 1992

TOTAL % OFDIRECTOR ALTERNATE CASTING VOTES OF VOTES TOTAL

AppointedE. Patrick Coady Mark M. Collins, Jr. United States 328,033 26.18Yasuyuki Kawahara Kiyoshi Kodera Japan 8C,044 6.39Fritz Fischer Harald Rehm Germany 73,111 5.83Jean-Pierre Landau Philippe de Fontaine Vive France 68,650 5.48David Peretz Robert Graham-Harrison United Kingdom 68,650 5.48

ElectedBernard Snoy Walter Rill Austria, Belgium, Czechoslovakia, Hunagary, Luxensibourg, 63,270 5.05

(Belgium) (Austria) Turkey

Rosariu Bunavoglia Fernaisdo S. Carneiro Greece, Italy, Polanld, Portugal 59,670 4.76(Italy) (Portugal)

J.S. Baijal MA. .Sved Bangladesh, India, Sri Lanka 55,867 4.46,India) (Bangladesh)

Moises Naim Gabriel Castellanos Costa Rica, El Salvador, Guatemala, Honduras, Mexico 54,015 4.31'Venezuela) (Guatemala) Nicaragua, Panama, Spain, Vienezuela

Frank Potter Hubert Dean Antigua and Barbuda, The Bahamas, Barbados, Belize, Canada, 52,809 4.21'Caniada) (The Baanamas) Domiiinica, Greniada, Guyana, Ireland, Jamaica, St. Lucia

Einar Magnussen' Jorunn Maehlumb Denmark, Finland, Iceland, Norway, Sweden 45,771 3.65"Norway) (Norway)

Eveline Herfkens Boris Skapin Bulgaria, Cyprus, Israel, Netherlands, Romania, Yugoslavia 43,882 3.50'Netherlands) (Yugoslavia)

John H. Cosgrove A. John Wilson Australia, Kiribati, Korea (Republic of), Newv Zealand, 40,380 3.22(Australia) (New Zealand) Papua New Guinea, Solomon Islands, Vanuatu, Western Samoa

Ernest Leung Paulo C. Ximenes-Ferreira Brazil, Colombia, Dominican Republic, Ecuador, Haiti, 39,216 3.13(Philippines) (Brazil) Philippines, Trinidad and Tobago

Aris Othman Aung Pe Fiji, Indonesia, Lao People's Democratic Republic, Malaysia, 35,072 2.80(Malaysia) (Myanmar) Mlyanmar, Nepal, Singapore, Thailand, Tonga, Viet Nam

Felix Alberto Camarasa Nicolas Flato Argentina, Bolivia, Chile, Paraguay, Peru, Uruguay 33,722 2.69(Argentina) (Chile)

Fawzi Hamad Al-Sultan Mohamed W. Hosny Egypt (Arab Republic of), Jordan, Kuwait, Lebanon, Maldives, 28,414 2.27(Kuwait) (Arab Republic of Egypt) Oman, Pakistan, Syrian Arab Republic, United Arab Emirates,

Yemen (Republic of)

Jabez A. Langley O.K. Matambo Angola, Botswana, Burundi, Ethiopia, The Gambia, Guinea, 27,598 2.20(The Gambia) (Botswana) Kenya, Lesotho, Liberia, Malawi, Mozambique, Namibia,

Nigeria, Seychelles, Sierra Leone, Sudan, Swaziland, Tanzania,Uganda, Zambia, Zimbabwe

Jean-Pierre Le Bouder Ali Bourhanc Benin, Burkina Faso, Cameroon, Cape Verde, Central African 15,691 1.25(Central African Repulic) (Comoros) Republic, Congo, Cote d'Ivoire, Djibouti, Equatorial Guinea,

Gabon, Guinea-Bissau, Madagascar, Mali, Mauritania,Mauritius, Niger, Rwanda, Senegal, Somalia, Togo, Zaire

Mohamed Benhocine Salem Mohamed Omeish Afghanistan, Algeria, Ghana, Iran (Islamic Republic of), 15,273 1.22(Algeria) (Libva) Libya, Morocco, Tunisia

Ibrahim A. Al-Assaf Ahmed M. Al-Ghannamu Saudi Arabia 14,697 1.17(Saudi Arabia) (Saudi Arabia)

Wassg Lianslieig Jin Liqun China 9,365 0.75(China) (China)

In addition to the directors and alternates shown in the foregoing list, the following also served after June 30, 1991:

DIRECTOR END OF PERIOD OF SERVICE ALSTERATE DIRECTOR END OF PERIOD OF SERVI.CE

Jacques de Groote August 31, 1991 Mark T. Cox, IV November 30, 1991(Belgium) (United States)

Jonas H. Haralz July 31, 1991 Clareince Ellis October 31, 1991(Iceland) (Guyana)

Masaki Shiratori June 28, 1992(Japan)

Vibul Aunsnunta October 31, 1991(Thailaiud)

No t eIraq (397 votes) aid South Africa (9,264 vtces) did notparticipate itti te 1990 Regular E!ectio sofDirectors. Albas,ia (986 otes,), aongolia (394 votes), atus Switzerland(23,752 votes) became members after that election.

a. Ta be succeeded by Jorunn Maehlum (Norway) as of August 1, 1992. b. To be succeeded by Helga Jonsdottir 'Iceland) as of August 1 1992.

124 DIRECTORS AND ALTERNATFS AND THEIR VOTING POWER

IF C M ANAGEM ENT

IFC MANAGEMENTPresident' Lewis T. PrestonExecutive Vice President William S. RyrieVice President, Capital Markets Daniel F AdamsVice President, Corporate Business Development Makarand V. DehejiaVice President, Finance and Planniing Richard H. FrankVice President, Operations Wilfried E. Kaffe:nbergerVice President, Operations Jemal-ud-din KassumVice President and General Counsel Jose E. CamachoSecretary' Timothy T. Thahane

REGIONAL DEPARTMENTSDirector, Asia Department Pho Ba Quan

Country Manager, Division I-China, Korea (Republic of), Mumtaz R. KhanMalaysia, Mongolia, Philippines, Sri Lanka

Country Manager, Division 2-Fiji, Indonesia, Kiribati, Harold RosenLao People's Democratic Republic, Papiia New Guinea, Solomon Islands,Thailand, Tonga, Vanuatu, Viet Nam, Western Samoa

Country Manager, Division 3-Bangladesh, India, A. TharmaratnamMaldives, Myanmar, Nepal

Manager, Capital Markets Division Deborah S. FarrellDirector, Central Asia, Middle East, and North Africa Department Andre G. Hovaguimian

Country Manager, Division 1-Afghanistan, Iran (Islamic Republic of), javed HamidIraq, Kazakhstan, Kuwait, Kyrghyzstan, Oman, Pakistan, Saudi Arabia,Tajikistan, Turkmenistan, United Arab Emirates, Uzbekistan,Yemen (Republic of)

Country Manager, Division 2-Algeria, Egypt (Arab Republic of), Jordan, Saini HaddadLebanon, Libya, Mauritania, Morocco, Syrian Arab Republic, Tunisia

Manager, Capital Markets Division Khalid A. MirzaDirector, Europe Department Edward A. Nassim

Country Manager, Division 1-Albania, Bulgaria, Cyprus, Georgia, Paul HincheyGreece, Moldova, Portugal, Romania, Turkey, Yugoslavia

Country Manager, Division 2-Czechoslovalia, Estonia, Hungary; Richard RanlcenLatvia, Lithuania, Poland

Country Manager, Division 3-Armenia, Belarus, Russia, Ukraine Anthony DoranManager, Capital Markets Division Cesare Calari

Director, Latin America and the Caribbean Department Helmut PaulCoantry Manager Division 1-Mexico, Venezuela Andre 1. CraccoCounotry Manager, Division 2-Central America and the Caribbean Hugh 1-lenrv-MayCountry Manager, Divisiot 3-Argentina, Bolivia, Chile, Paraguay, Kent E. Lupberger

UruguayCountry Manager, Division 4-Brazil, Colombia, Ecuador. Peru Manuel NufnezManager, Capital Markets Division Varel D. Freeman

Director, Sub-Saharan Africa Department Irving KuczynskiCountryManager, Division 1-Botswana, Djibouti, Ethiopia, Kenya, Tei Mante

Lesotho, Malawi, Namibia, Somalia, South Africa, Sudan, Swaziland,Tanzania, Uganda, Zambia, Zimbabwe

Country Manager, Division 2-Angola, Benin, Burkina Faso, Burundi, Bernard PasquierCameroon, Cape Verde, Central African Republic, Comoros, Congo,Cbte d'lvoire, Equatorial Guinea, Gabon, The (Gambia, Ghana, (Guinea,Guinca-Bissau, Liberia, MIadagascar, Mali, Mauritius, Mozambique, Niger,Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, Togo, Zaire

Manager Division 3-Small Business Development Richard P. ParryManager, Capital Markets Division Teresa C. Barger

SPECIALIST DEPARTMENTSDirector, Agribusiness Department Karl VoltaireDirector, Central Capital Markets Department Farida Khambata

Mlanager, Emerging Markets Data Base Marketing Unit Peter L. TropperManager, Global and New Product Development Division Syed Aftab AhmedMfanager, International Securities Division Jayant S. TataAfanager, Relations, Advisory, Technical Assistance, and Specialists Unit Rudolf van der BijlSpecial Adviser to Vice President, Capital Markets Nabil C. Faltas

These officers hold the same position in the IBRD. 1 25

Director, Chemicals, Petrochemicals, and Fertilizers Department Jean-Philippe F. HalphenManager, Division I Reynaldo OrtizMlanager, Division 2 Jean-Paul Pinard

Director, Corporate Finance Services Department Philippe LietardMvanager, Division I-Asia, Middle East, North Africa, Bruce MacLeod

Southern and Central EuropeManager, Division 2-Eastern Europe, Latin America and XTivek Talvadkar

the Caribbean, sub-Saharan AfricaDirector, Infrastructure Department Everett J. Santos

Mlanager, Division I-Power Vijay K. ChaudhryMfanager, Division 2-Transportation Declan J. DuffManager, Division 3-Telecommunications Assaad Jabre

Director, Oil, Gas, and Mining Department M. Azam K. AlizaiManager, Division I-Oil and Gas Mitchell AllandManager, Division 2-Mining Sakdiyiam KupasrimonkolSpecial Adviser to the Director Claus A. Westmeier

SUPPORT DEPARTMENTSDirector, Controller's and Budgeting Department R. Michael Barth

Mvlanager, Accounting Division Kenneth K. AssalMlanager, Budgeting Division Peter A. DickersonManager, Information Technology Division Allen F. ShapiroMvfanager, Portfolio Operations Support Division Guy A. de Clercq

Director, Corporate Planning Department Nissim EzekielManager, Planning Unit Osman S. AhmedMAlanager, Private Sector Strategies Division Dileep XXagle

Director, Economics Department, and Chief Economic Adviser Guy Pierre PfeffermannLead Economist Michael J. AtkinChief Operations Evaluation Officer Walter I. Cohn

Deputy General Counsel, Legal Department Daoud L. KhairallahChief Counsel Fernando CabezasChiefCounsel David d'AdhemarChief Counsel Carlos Fernandez-DuqueChief Counsel Maher S. MahmassaniChief Counsel Jennifer A. Sullivan

Director, Personnel and Administration Christopher BamMAlanager, Administration Gordon A. MacdonaldAlanager, Corporate Relations Unit Jack GarrityManager, Personnel Michael O'FarrellManager, Recruitment and Benefits Cornelis de Kievit

Director, Technical and Environment Department Andreas M. RaczynskiManager, Environment Unit Martyn J. RiddleManager, Technical Services John D. Harper-Manager, Technical Services Gilbert HuntManager, Technical Services Friedrich LuhdeMVanager, Technical Services Gopi Nath PuriAManager, Textile Unit Hassan OteifaManager, Tourism Unit Oton Tony IskarpatyotiChief Technical Advisory Services Unit Eustachio Tortorelli

Director, Treasury and Financial Policy Department Robert D. GraffamManager, Financial Planning and Policy Division Mark B. KeatleyManager, Syndications Division Francis de C. HamiltonMlanager, Treasury Operations Division Bernardo Frydman

OTHERManager, Foreign Investment Advisory Service Dale R. WeigelManager, Special Operations Unit [an J. BridgeManager, Technical Assistance Trust Funds Program Alakadri K. BosePrincipal Financial Adviser Vasant H. Karmarkar

126 IFC MANAGEMENT

PROJECT DEVELOPMENT FACILITIESCoordinator, Africa Project Development Facility Alexander N. Keyserlingk

Regional Manager, East Africa (Nairobi, Kenya) Ignacio D. MarambaRegional Manager, Southern Africa (Harare, Zimbabwe) Omari M. IssaRegional Manager, West Africa (Abidjan, C6te d'lvoire) Robert Shakotko

Coordinator, South Pacific Project Facility Alakadri K. BoseRegional Manager, South Pacific (Sydney, Australia) Amitava Banerjee

General Manager, Polish Business Advisory Service (Warsaw, Poland) G.K. (Charles) van der MandeleManager, Business Advisory Service for the Caribbean and Central America Damian von Stauffenberg

REPRESENTATIVES AND REGIONAL AND RESIDENT MISSIONSSpecial Representative in Tokyo Shigeru NagaiDeputy Special Representative in Tokyo Ernest M. KepperSpecial Representative in Europe (London) Douglas GustafsonSpecial Representative in Europe (Paris) Giovanni VacchelliRegional Representative in Bangkok, Thailand Chung Min PangRegional Representative in Central Africa (Douala, Cameroon) vacantRegional Representative in Eastern Africa (Nairobi, Kenya) Guy C. AntoineRegional Representative in Islamabad, Pakistan C. John PottRegional Representative in Jakarta, Indonesia Udayan WagleRegional Representative in Manila, Philippines Kip R. ThompsonRegional Representative in the Middle East (Cairo, Egypt) John H. StewartRegional Representative in Moscow (Russia) Roger 1. GaleRegional Representative in New Delhi, India A. TharmaratnamRegional Representative in North Africa (Casablanca, Morocco) Pierre M. SalaRegional Representative in Southern Africa (Harare, Zimbabwe) Thomas MiltonRegional Representative in West Africa (Abidjan, C6te d'lvoire) Wolfgang BertelsmeierResident Representative in Argentina (Buenos Aires) Pedro BatallaResident Representative in Brazil (Sao Paulo) Stanley R. GreigResident Representative in Czechoslovakia (Prague) Vikas ThaparResident Representative in Hungary (Budapest) Dennis l'. KoromzayResident Representative in Nigeria (Lagos) Mohan R. WikramanayakeResident Representative in Poland (Warsaw) Damianos DamianosResident Representative in Turkey (Istanbul) Khosrow K. ZamaniIFC Adviser, Australasia (Sydney) Neil J. PatersonIFC Adviser, Scandinavia (Oslo) Torstein StephansenSenior Adviser, Eastern Europe (Vienna) Theo K. Zirkel

127

AC RON YM S, A BB REV IAT IO NS, NOTES, AND D EFIN I TI ON S

ACRONYMS NOTES AND DEFINITIONSAEF Africa Enterprise Fund 1. IFC's fiscal year runs from July 1 to June 30. Thus, fiscalAfDB African Development Bank 1992 (FY92) began on July 1, 1991, and ended on June 30,AMSCo African Management Services Company 1992.APDF Africa Project Development FacilityBAS BLusiness Advisory Service for the Caribbean 2. The World Bank includes both IBRD and IDA. The

and Central America World Bank Group includes the World Bank, IFC, andCIS Commonwealtlh of Independent States MTGA. Tn this report, lFC is sosnetimes referred to as theCMEA Council for Economic Mutual Assistance Corporation.EBRD European Bank for Reconstruction

and Development 3. Investment amounts are generally given in U.S. dollars,EMIDB Emerging Markets Data Base regardless of the original currency or currencies of theFIAS Foreign Investment Advisory Service investment, based on the exchange rate in effect on June 30,GATT General Agreement on Tariffs and Trade 1992.IBRD International Bank for Reconstruction

and Development 4. Figures cited in connection with project: financing mayIDA International Development Association refer to the following:IFC International Finance Corporation (a) ApprovalsIMF International Monetary Fund Loans, syndicated loans, guarantees, equity and quasi-MIGA Multilateral Investment Guarantee Agency equity investments, and underwriting approved by theOECD Organization for Economic Cooperation Board of Directors during FY92.

and Developmenit (b) ComnritroentsPBAS Polish Business Advisory Service Loans, syndicated loans, guarantees, and equity and quasi-SPPF South Pacific Project Facility equity investments for which agreements were signed byUNDP United Nations Development Programme IFC during FY92.UNEP United Nations Environment Programme (c) Disbursements

Loans, syndicated loans, and equity and quasi-equityABBREVIATIONS investments actually disbursed during FY92.FY fiscal yearFDI foreign direct investment 5. In some tables, totals may differ from the sum ofGDP gross domestic product individual figures because of rounding.GNP gross national product

LIBOR London interbank offered rate

Photo credits pp. 44, 47, 65 Dana Downiep. 13 Aleksei Fedossievpp. 2,71, 76 Max HirshfeldP. I Michele lannacci (World Bank Group)p. 57 Dana Younger (IFC)P. 11 GaviiiW 7ilsoni (IFC)p. 25 courtesy of Mufindi Tea Company Limitedp. 28 courtesy of Omnium Chimique et Cosm6tiquep. 3 5 courtesy of Bank of Asiap. 39 courtesy of SKF Bearings India, Ltd.p. 53 courtesy of Promigas S.A.

Cover photo Detail of handwoven Fulani tent hanging from Mali,twentieth centuryReproduced courtesy of The Textile Museum, Washington, D.C.Gift of Phyllis C. Kane to the Museum(Accession No. 1977.23.2)

Design Mitchell & Company Graphic Design Inc

Typography World Bank Group Composition Unit

® Printed on recycled paper

128 ACRONYMS, ABBREVIATTIONS, NOTES, AND DEFINITIONS

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