Announcement of World Bank, IDA Lend One Hundred Million US Dollars to China to Help Modernize Industries on March 6, 1986

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, US.A. INTERNATIO~l\L,JIARIG tlUH BANK NEWS RELEASE NO. 86/58 RECONSTRUCTION ·.AND D i ~ a c t. Pastor B. Sison .:vf...l}S,¥,Vi.C.l,qN, 1.-D.:P. 2111181 J • IDA NEWS RELEASE NO. 86/38 (202) 477-3573 March 6, 1986 WORLD BANK, IDA LEND $100 MILLION TO CHINA TO HELP MODERNIZE INDUSTRIES Efforts to strengthen further a prominent financial institution in China that assists industrial enterprises to modernize and expand will receive a boost from financing from the World Bank and the International Development Association (IDA) totalling $100 million. The China Investment Rank (CIB) will benefit from a loan of $75 million from the World Bank and a credit of SDR 22.8 million ($25 million) from IDA to assist it in improving investment efficiency through the import of technology and adoption of improved methods in selecting and designing projects. The CIB, with headquarters in Beijing and 19 branches in eastern China, provides investment loans for small- and medium-sized industrial projects needing foreign exchange. CIB's offices cover municipalities and provinces that together account for some 76 percent of China's population and 87 percent of its industrial production. The funds from the World Rank and IDA are expected to be used to finance about 80 subprojects in the small and medium industries sector. Because of the tighter foreign exchange situation in China, CIR has recently been supporting export-oriented projects. The emphasis of investment in the sector has been on light industries but CIB recently has been expanding its assistance to include chemicals, machinery, electronics, building materials, and metallurgy. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 8.5 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances. The IDA credit is for 50 years, including 10 years of grace; it carries no interest but has annual charges (0.5 percent on the undisbursed balances and 0.75 percent on the disbursed balances). NOTE: Money figures are expressed in U.S. dollar equivalents. IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of the negotiation of the credit.