Announcement of IFC's First Project in Somalia on January 22, 1981

International Finance Corporation • 1818 H Street. NW Washington. D.C. 20433. U.SA 202-477-1234 IFC Press Release No. 81/31 Thursday, January 22, 1981 IFC's First Project in Somalia The International Finance Corporation (IFC), the World Bank affiliate in charge of stimulating private investments in developing countries, is co- financing its first project in Somalia -- a $1.5 million venture for construc- tion of a bulk terminal and handling facilities to export 21,000 metric tons per year of molasses. The project will result in sizeable foreign exchange earnings of $900,000 a,tnually. It will be implemented by the newly-created Somali Molasses Company Ltd. (SMC) and will use the molasses production of a $188 million sugar estate -- one of the most significant development projects in Somalia in recent • years. SMC will be sponsored by Juba Sugar Project, a wholly-owned government agency, which will invest $225,000 in equity; United Molasses Company Ltd., the world's largest molasses trader, which is investing $140,625 in equity and the Somali Development Bank, whose equity investment will amount to $84,500. Loans will be provided by the Somali Development Bank, $286,000: DEG, the German Development Company, $389,000; and IFC, $375,000. IFC is participat- ing in the pr.oj ect at the request of the Somali Government to help structure one of its first ventures with foreign participants. The investment is in line with IFC's recent policy to increase its activities in poorer countries by supporting small projects. SMC will increase the profitability of the Juba Sugar Project, which will produce 70,000 tons per year of mill white sugar for domestic consumption and will reduce sugar imports by more than $30 million annually while providing jobs for 3,000 workers and generating 21,000 tons per year of molasses for export. • [Any inquiries strictly relating to IFC's participation in this project should be directed to the IFC Information Office, 1818 H Street, N.W., Washington, D.C. 20433, Telephone (202) 676-0393.]