Announcement of Mexico Receives Fifty Million US Dollars for Industrial Development on February 4, 1976

eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 76/8 February 4, 1976 MEXICO RECEIVES $50 MILLION FOR INDUSTRIAL DEVELOPMENT Mexico's industrial development wi 11 be assisted by a World Bank loan of $50 million. The loan wi 11 finance the foreign exchange component of the lending operations of the Fonda de_ EquJpa- miento Industrial (FONEI) over the next two years. FONEI was established in 1971 to provide supplemental term finance through commercial and investment banks to industrial enter- prises with an export potential. In 1972, the World Bank made a loan of $35 million in support of FONEI 's operations. Since its inception, • FONEI had approved 56 loans totaling $79 million. The sectors bene- fiting most from FONEl's operations were metallurgical products with about 22% of investments; chemicals with 16%; processing of non- metallic minerals 14%; and electrical products 13%. FONEI has fully committed the Bank's first loan. The loan of $50 million will, over a two-year period, finance, the fixed assets of specific export-oriented and import-substitution enterprises. The project is an important part of Mexico's efforts to increase its foreign exchange earnings and to strengthen industrial development finance'companies. The Bank loan to the Nacional f, anciera S.A., a financial agency of the Mexican Government, will be for 16 years, including 3 years of grace. It will bear interest at 8-1/2% per annum and wi 11 be guaranteed by Mexico. The proceeds of the loan will be channeled through FONEI to financial intermediaries for investment in industry. To improve the allocation of FONEI 's funds and to maintain its re- lending rate in line with future changes in the cost of alternative • funds, FONEI will have higher and variable inter~st rates . Note: Money figures are expressed in U.S. dollar equivalents.