Announcement of a One Hundred Seventy-Five Million Dollars Loan to Mexico for Industrial Credit on June 4, 1979

FOR IMMEDIATE RELEASE .world Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/97' June 4, 1979 A $175 MILLION LOAN TO MEXICO FOR INDUSTRIAL CREDIT A World Bank loan of $175 million will help the Fonda de Equipam4ento Industrial (FONEI) of Mexico to provide financing for high-priority industrial projects, including those for development of technology and pollution control. The Bank loan will finance the foreign cost of eligible s~bprojects over a period of about two years. FONEI, a government trust fund managed by the Banco de Mexico, will provide medium- and long-term financing to industrial enterprises through the commercial banking system to help finance the acquisition of machinery, equipment and services for high-priority industrial projects. It is expected that FONEI will finance around 150 investment subprojects in a wide range of industries which will increase output, employment and exports. • The subprojects are expected to have a substantial employment impact, generating a total of about 25,000 new jobs. The loan will contribute significantly to industrial decentralization and regional development, with a majority of the funds expected to go to projects outside the main established industrial centers. A substantial portion of the loan is expected to be utilized for medium-sized enterprises and the subprojects to be financed are expected to result in important foreign exchange earnings and savings. The loan will also help finance a training program on industrial project evaluation and supervision for financial intermediaries and FONEI 's staff. A national study of human resources and technical and vocational training needs for further industrial development will be included in the project. The $175 mi 11 ion loan to Nacional Financiera, S.A. (NAFINSA), with the guarantee of United Mexican States·, has a term of 17 years, including 4 years of grace, with interest at 7.9% a year. Since 1972, the World Bank has approved three previous loans, for a total of $185 mi 11 ion, to support FONE I I s prog ram_s. NOTE: Money figures are expressed in U.S. dollar equivalents • •