Guinea - Industrial Rehabilitation and Promotion Project

Document of F11 L E C 0 P Y The World Bank FOR OFFICIAL USE ONLY Report No. P-3203-GUI REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE REVOLUTIONARY PEOPLE'S REPUBLIC OF GUINEA FOR AN INDUSTRIAL REHABILITATION AND PROMOTION PROJECT April 8, 1982 I This document hbs a restricted distribution and may be used by recipients oely in the perfonnance of their dofiial duties. Its eontens may not otherwise be disclosed without World Bank authorization.  CURRENCY AND EQUIVALENTS The official monetary unit is the Syli Syli 1 = US$0.05 US$1 = Syli 21.35 ABBREVIATIONS AND ACRONYMS CNC - Conseil National du Credit CNCIH - Credit National pour le Commerce, l'Industrie et 1'Habitat IMPORTEX - State Importing Agency MI - Ministry of Industry MSNE - Ministry of Small and Medium Enterprise OCOFI - Organisation pour la Coordination Financiere de l'Industrie PPF - Project Preparation Facility SME - Small and Medium Scale Enterprise SONACAG - Societe Nationale de Carreaux et de Granite GOVERNMENT FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY THE REVOLUTIONARY PEOPLE'S REPUBLIC OF GUINEA INDUSTRIAL REHABILITATION AND PROMOTION PROJECT CREDIT AND PROJECT SUMMARY Borrower: Revolutionary People's Republic of Guinea Beneficiaries: Proceeds of the Credit would be relent by the Credit National pour le Commerce, l'Industrie et l'Habitat (CNCIH) as loans to private enterprises and four state enterprises, passed on as equity to the state enterprises, and granted as assistance to CNCIH, Ministry of 'Industry (MI) and Ministry of Small and Medium Entreprise (MSME). Amount: SDR 16.6 million (US$19 million equivalent). Terms: Standard Relending Terms: The Credit proceeds would be passed to CNCIH at not less than 10 percent per annum and relent by CNCIH to state and private enterprises at not less than 13 percent per annum. Project Description: The principal objectives of the project would be to support Government's industrial strategy through strengthening the private productive sector, improving the performance of selected state industrial enterprises and strengthening industrial sector policy formulation and project preparation. The project would: (a) provide term credit through CNCIH for private sector investment; (b) finance rehabilitation of four state industrial enterprises; (c) provide technical assistance: to the Ministry of Industry (MI) for planning and feasibility studies, to the Ministry of Small and Medium Enterprise (MSME) for institutional strengthening and promotion of SME, and to CNCIH for institutional strengthening. Benefits and Risks: The project would be the first step in revitalizing the industrial sector. The pilot rehabilitation of state enter- prises would provide a basis for wider restructuring of the state sector. The assistance to MI, MSME and CNCIH would provide a basis for future expansion of the sector. The sub-projects together would save or earn considerable foreign exchange, preserve and increase employment and improve sectoral productivity. In the selection of private sector sub-projects, the exchange rate would be shadow-priced to offset distortions introduced by the overvalued currency. The continuing short- age of foreign exchange presents some risks for financing of future operating inputs, but the Government's record in providing such foreign exchange, when promised, is good. This document has a restricted distribution and may be used by recipients only in the performance of _ 1heir official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Estimated Project Costs Local Foreign Total