Announcement of Mexico’s Capital Goods Industries to be Assisted by the World Bank on May 17, 1982

j . . · FOR IMMEDI E REL ASE .world Bank 181 ~ H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 82/89, Contact: Cir~ Gamarra May 17, 1982 (202) 477-8034 .MEXtcots CAP1TAL GOODS INDUSTRIES TO BE ASSISTED BY THE WORLD BANK ' ~ Development of Mexico's capital goods ma11ufacturing subsector will be assisted by the Wor1d Bank. The: Bank has approve,d a $152.3 mi'l 1 ion loan to Mexico to help finance the first phase of a program designed to achieve this objective. At a total estimated cost of $1,147.3 million, the Bank-assisted project will provide financing and technica1 support and will help strengthen the institutional base for the program. The program aims at achieving a balanced and efficient development of the M~xican capital goods manufacturing subsector and th us helps improve productivity, employment, 1 baiance of payments, and technology assimilation and development in Mexico. The beneficiaries of the loan will be the Industrial Equipment Fund (FONEI); the Sociedad Mexicana de Credito Industrial (SOMEX), a commercial bank and investment company; and Nacional Financiera S.A. (NAFINSA), a financial agency of the Mexican government. These agencies will make loans or equity investments to help finance establishment or expansion of medium-size capital goods manufacturing industries. FONEI wi11 also finance technical assistance and technology development activities of these enterprises. The project a]so includes complementary me~sures to benefit the entire capital goods manufacturing subsector by providing technical training, technological information services, and studies to assist industries and institutions participating in the program. The project wi11 finance 40 to 60 investment subloans, 10 to 15 equity invest- ments, 20 to 30 technAcal assistance subloans, and 5 to 10 technology development loans • . The project is expected tc.'l increase employment, promote deconcentration of industrial activities, and generate or save foreign exchange. The capital goods industrie '.i development program wi 11 be co-financed by the 1 Mexican government, Mexican and foreign banks, export credit agencies, private Mexican and foreign entrepreneurs, and the World Bank. The $152.3 million loan was made to NAFINSA, with the guaran~ee of the United Mexican States. The loan includes a capitalized front-end fee of $2.3 million, it is for a term of 15 years, including three years of grace, with interest at 11.6% per annum. :. • NOTE: Money figures are. e~pressed in U.S. dol 1ar equivalents.