Announcement of IFC Investment in Societe Industrielle d'Engaris au Senegal (SIES), Senegal on August 24, 1966

u - INTERNATIONAL FINANCE CORPORA-TION . 1 8 1 8 H STREE·T. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IFC Press Release No. 66/12 Subject: IFC Investment in Societe For Release .AM Newspapers Industrielle d I Engr~is au Wednesday, August 24., ··1966 ~negal. (,SIES) ., Senegal 'lbe International Finance Corporation (IFC)., an affiliate ·of the World Bank, is joining with European and Senegalese investors -to finance a $12.4 mil- liolJ fertilizer plant., the first to be.established in West Africa. The plant., \\, whic~ will manufacture a range of complex fertilizers and superphosphates, will be built near Dakar in Senegal by the Societe Industrielle d'Engrais au Senegal (SIES). The main sponsor is the Potasses d'Al.sace group of Fr~nce, one of tbe world's largest potash producers and an important manufacturer of complex fer- tilizers in Europe. IFC's total commitment., its first in Senegal, is for a ~ maximum of $3.4 milli0n, including an equity investment and a long-term loan. Other financial institutions expected to participate in the project include the European Investment Bank., ~he Senegalese National Development·Ba.nk (BNDS) and two French government institutions, Fonds d'Aide et de Cooperation and Caisse Centrale de Cooperation Economique. 'Ihe European Investment Bank is a European ~onomic Community institution, which in addition to its activities within the Connnon Market, makes loans to cer+.J8.in associated countries, including the African states linked to the Community by the . Yaollllde Convention of 1963 • . Senegal's economy is based primarily on agriculture., and particularly on the growing of peanuts for export. In order to increase the productivity of the agricultural sector the Senegalese government has for some time been en- c~uraging the usJ of fertilizers by providing technical assistance 1 loans and • subsidies. sistently from As a result, fertilizer consumption has increased rapidly a.'ld con- 4,400 tons reach S3.,000 tons in 1966. in 1960 to 42,000 tons last year and is expected to  • - 2 - ( i, At present Senegal exports rock phosphate and imports· p.t~ished fertil- izers to meet the requirements or local farmers. 'lhe new plant, wiJ.l utilize the local rock phosphate, together wit~ imported sulphur, ammonia and potash, to produce c~:>niplex fertilizers. In addition to supplying domestic needs, SIES plans to produce limited amounts of complex fertilizers and triple superpposphate for export, mainly to neighboring West African countries. The Potasses d 1Alsace group will assist the company with i\s sales in foreign markets. Share capital w-iill accollllt for 1,100 million CFA francs (approximately US$4.45 million) of the total investment of CFAF 3,100 million. The largest holding, CFAF 240 million, will oe that of the Societe Senegalaise d'Engrais et de Produits Chimiques, a subsidiary of Potasses d'Alsace and two other French • concerns. IFC will rank next with CFAF 200,:million (equivalent to $810,000) plus a contingent commitment of up to ~200,000. Other important shareholders include Salzdetfurth A:IG., a leading German fertilizer manufactu::.rer, BNDS and Societe Senegalaise de Phosphates de Thies, a subsidiary of the French chemical concern Pechiney~Saint-Gobain. Smaller equity investments will be held by a number of European and Senegalese firms and four commercial banks in Senegal. The balance of the financing will be in the form of long-term loans. IFC is providing CFAF 600 million ($2.43 million) repayable over eight years beginning in 1970. 'Ihe European Investment Bank is expected to lend a similar amount and BNDS, drawing oi:i credit facilities to be provided by the Caisse Centrale de Cooperation Economique, is expected to supply CFAF 500 million. The remaining CFAF 300 million will be in the form of a lopg-term loan on special t(Jrms from the Fonds d 'Aide et de Cooperation. •