Morocco - Electrical and Mechanical Industries Project

Docmnent of The World Bank FOR OMCIL USE ONLY Ript No. 5225-MOR STAFF APPRAISAL REPORT MOROCCO ELECTRICAL AND MECHANICAL INDUSTRIES PROJECT December 4, 1984 Industrial Development and Finance Division Europe, Middle East and North Africa Region Thk ducmet hm a resided dlstubuth. ad C"a be ied by zedbmt ialy ia te perfmane of theUrdaffIeW dude Its contets may mt srwwbe bie sdslosd wto W Bank uhoom  Currency Equivalents (Carrenc y Unit = Dirham DH) DH per US$ 1980 1981 1982 1-983 Year Average 3.94 5.L7 6.02 7.11 Year End 4.33 5.33 6.27 8.06 Projections in the report for 1984 and subsequent years use an exchange rate of DH 8.5 = $1. Fiscal Year January 1 - December 31 LIST OF ABBREVIATIONS BCH Banque Commerciale du Maroc BCP Banque Centrale Populaire BdM Banque du Maroc BMCE Banque Marocaine du Commerce Exterieur BMCI Banque Marocaine pour le Commerce et l'Industrie BNDE Banque Nationale pour le Developpement Economique CDG Caisse de Dep6ts et Gestion CDM Credit du Maroc CIH Cr6dit Immobilier et HBtelier CMCB Compagnie Marocaine de Credit et de Banque CNCA Caisse Nationale de Credit Agricole EEC European Economic Community EIB European Investment Bank EKIs Electrical and Mechanical Industries (= Engineering Industries) ERR Economic Rate of Return FRR Financial Rate of Return MCI Ministry of Commerce, Industry and Tourism ODI Office pour le Developpement Industriel SGMB Societe Generale Marocaine de Banques SNI Societe Nationale d'Investissement SSIs Small-Scale Industries  OR OmCIL USE ONLY KINGDOM OF MOROCCO ELECTRICAL AND MECHANICAL INDUSTRIES PROJECT Loan and Project Summary Borrower: The Kingdom of Morocco Amount: US$25.1 million equivalent, including the capitalized front-end fee. Terms: 17 years, including 4 years of grace, at the standard variable interest rate. The Government would bear the interest and foreign exchange risks on the Bank loan. On-lending i) $22 million of the Bank loan would be on-lent to Terms Moroccan commercial banks at the Bankk interest rate prevailing at loan signature, and would be repayable according to a composite amortization schedule, reflecting the amortization of sub-loans extended by the coimercial banks. The interest rate on sub-loans to EMI borrowers would be the current minuum effective rate on long-term industrial loans. The terms of sub-loans would reflect the economic life of sub-projects, with a maximum maturity of twelve years, including a maximum grace period of up to three years. ii) $3 million of the Bank loan would be on-lent to the Office pour le Developpement Industriel (ODI), at the Bank interest rate prevailing at loan signature, with a maturity of 15 years, including 5 years of grace. Project The project's objectives are to support the development of Description electrical and mechanical industries (EMIs), encourage Moroccan commercial banks to be more active in term financing of industry, and strengthen ODI in its role of industrial promotion. To achieve these objectives, the project would consist of; i) a line of credit of $22 million onrlent by participating commercial banks to finance about 40 eligible EMI sub-projects; and ii) a subsidiary loan to ODI of