Announcement of World Bank Group Supports Mining and Industrial Credit Project in Bolivia on June 24, 1976

' .. ·~.: ~ •world Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 Hank News Release No. 76!82 WORL~ BANK GROUP SUPPORTS MINING AND INDUSTRIAL CREDIT PROJECT IN BOLIVIA The World Bank has approved a loan of $10 million to assist Bolivia's Banco Industrial S.A. (BISA) in its financing of private mining and industrial l enterprises. The International Finance Corporation (IFC), a World Bank affiliate, has also approved an investment of up to $bll billion ($550,000 equivalent) in l the share capital of BISA. Mfning has traditionally exerted a dominant influence· on the Bolivian ;/ economy, accounting for ll~of the country's GDP and for about two-thirds of f merchandise exports. A capital intensive activity, mining employs only about 3% of the 1abor force, but sever a 1 hundred. thousand Bo 1 iv i an.s depend on it for I their livelihood. The Bank Joan will fill a major gap in the financing of f private mining enterprises, to help increase their productivity. i • Industry contributes''abo.t.jtt,,."fn%~o:,:-- GDP and in 1974 employed about 8% of the country's labor force. Industrial activities in Bolivia are largely car~fed out in small plants and workshops, which are labor intensiv~. Most industrial firms, with petroleum and metal refining excepted, are in private hands. The project will help stimulate a more rapid growth of the sector f ' r- f through the proV'-ision of term funding to medium-size and also small inc'hlsfriai enterprises. The project is expected to contribute to the further development of BISA as the principal term-lending institution to the private mining and industrial sector. It will also incorporate some features designed to con- tribute to the development of the Bolivian capital market by supporting BISA's efforts to mobiiize domestic resources through bond issues. The IFC investment in BISA's share capital is expected to induce parallel sha·re ca_pi tal investments of at least $b22 mi 11 ion ($J mi 11 ion equivalent) to help strengthen BIDA's capital base \:vhich will, in turn, help BISA to increase its lending program. The Bank loan made to the Government of Bolivia for the benefit of BISA, will be at 8.85% annual interest. Amortization of the· loan will con- form substantially to the agg!""egate of amortization schedules applicable to the subloans financed out of the proceeds of th~ Joan, which will not exceed 1,8 years . • , NOTE: Money figures are e>.1Jressed in U.S. dollar equivalents.