Announcement of Romania Borrows Fifty Million Dollars for Polyester Plant on June 9, 1977

eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 77 /123 JfJNE q, 1977 ROMANIA BORROWS $50 MILLION FOR POLYESTER PLANT ---------~----------------- --------------- ---- The World Bank has approved a loan for $50 million to Romania to help finance construction of a polyester plant to meet the increasing domestic needs for synthetic fiber. The plant wil 1 be located in Cimpulung-Muscel, a relatively less developed region in the Arges district in central Romania to provide for a more balanced regional growth and take advantage of available labor. It will provide about 2,150 new jobs of which about half are skilled or managerial . • The plant will produce about 47,000 tons of polyester a year and incre~se the country's synthetic fiber capacity by 42 percent. to lower production costs and insure product quality. It will be designed The majority of the production is destined for domestic consumption but approximately 25 percent is expected to be exported the first four vears of production. The raw materials will come from existing petrochemical plants in the country. Without the production from the new plant Romania would need to import synthetic fibers~ The total project cost is estimated at $128.9 mil lion. The balance of the project will be financed by the Romanian Government. The estimated net annual foreign exchange savings are about $30 million. The Bank loan will be for 15 years including a grace period of three • years with the Bank's standard interest rate of 8.2 percent . NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T E C HN I CA L PROJECT: COUNT RV°: TOTAL COST: Cirnpulung-Muscel Polyester Plant Romani a $ 12 8. 9 mi l 1 i on • BANK F INAN CING : $50 million for 15 years, with three years ~r~ce and 8.2 percent interest. OTHER FINANCING: riove rnment of Romani a IMPLEMENTING ORGANIZATION: Banca de lnvestiti i Str. Doamnei No. 4 Bu cha rest Romania PROJECT DESCRIPTION: The Cimpulung-Muscel Polyester Plant will be built to increase the production of high quality polyester to meet increasina domestic needs. The plant will produce about 47,000 tons of polyester a year and provide about 2,150 new jobs of which half are skilled or management. It will he located in t h . Arges district in Central Romania to provide a more balanced regional growth and take advantage of available labor. PROCUREMENT: Technology, equipment, materials estimated at $48.2 million will be procured by international cotrpetitive biddinq. Romanian suppliers wil J have a margin preference of 15 percent or applicahle customs dutv, which- ever is 1()\11/er. Imported items under $100,000 each and up to a total of $1.8 million may be purchased through international shopping subject to prior Bank approv~l. ECONOMIC RATE OF RETURN: 15.6% ESTIMATED COMPLETION DATE: 1980 - 0 - •