Announcement of Eight Million US Dollars Loan in Ceylon on July 16, 1969

f f\lTERNATIONAL BAf\fK FOR • RECC)l\JSTRUCTION Af\10 DEVELC")P~/IENT 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 69/57 Subject: $8 million loan ilf Ceylon July 16, ~969 The World Bank has aP,proved a loan equ~valent to f8 million to the Develo.f1111811t · Finance ,corporation of Ceylon (DFCC). The loan will provide the Corpor,4tion with foreign exchange for investments in projects undertaken by private industrial, 1--~, agricultura)~ >~d conmercial enterprises in Ceylon. () DFCC was established in 19~5 by,private Ceylonese and foraign investor• wJth the su~port of the Government of Ceylon. The Bank made its first loan of $4 •ilHaq to DFCC in 1967. · By 1969, DFCC had made a total of 1-72 loaris and ·iavGa-t~~=- amounting to the equivalent of about $14 million. DFCC's financial asalatanc,. • has been distributed over a wide range of ind~stries such as chemical product•, textiles, electrical and metal products, clothing, food and beverage, and rubber, and has also included hotels, building materials, engineering, printing and pack~ aging and. large-scale agriculture~ The economy of Ceylon has made COD$iderable progress in recent years due largely to a successful drive to increase domestic food production and to the. introduction of exchange reforms and other policy changes which improved the investment climate. In 1968 industrial prc:>duction increased by an exceptional ii 45l, both as a result of increased use of capacity •nd the conmissioning of ~etf plantse The prospects for continued growth are good, and DPCC is gearing it• self for an expansion of lts operations both in the size of its loans and of its projects • •  () Bank Press ReleS:se No. 69/57 - Ceylon On - 2 - the basis of applications now under cons'ideration or expected, it is eati• mated that over the next two years DFCC will be able to c0111Dit the equivalent. of • about $16 million, of which ab~ut $10 million will be in foreign exchange. Taking 1> into .,ccount other funds DFCC now has on hand, or in sight, and the $8 million 7 · • World Bank loan, DFCC should have most of the foreig~ exchange funds. necessary J.' for this volume of business. Its lending in local currency will be financed mainly from repayments of earlier loans and from borrowings under a refinancing program operated by the Central Bank of Ceylon. The World Bank loan will bear interest at the rate of 6-1/21. per annum and will be guaranteed by the Government of Ceylon. Repaymen~s to the World _Bank will conform approximately to repayments received.by DFCG on its sub-loans and investments financed out of Bank funds, which will not extend for periods be- yond lS years. - 0 - • •