Announcement of IFC Finance to 15 Yugoslav Export-Oriented Investments February 4, 1986

ational Finance Corporation Tuesday, February 4, 1986 Monique Amaudry Press Release No. 86/26 CONTACT (202) 676-9331 IFC HELPS FINANCE 15 YUGOSLAV EXPORT-ORIENTED INVESTMENTS The International Finance Corporation is providing Jugobanka (JB), one of the leading Yugoslav banks, with a loan in several currencies equivalent to $32 million, to help finance the foreign exchange component of a package of 15 small- and medium-sized export-oriented investments. The project will provide long term financing to a sizeable number of Yugoslav enterprises, allowing priority exporters to expand and modernize their facilities to remain competitive in export markets. It will also further improve the country's balance of trade. The package of export-oriented investments to be channeled through JB consists of 15 sub-projects for a total cost of $97 million in the furniture and woodworking, textiles, capital goods and miscellaneous manufacturing sectors. IFC is providing, together with participants, a total of $32 million equivalent for the project, consisting of about Deutsche Mark 62 million, equivalent to $22.5 million, for its own account; DM15 million, equivalent to $5.5 million, for the account of Kreditanstalt fuer Wiederaufbau; DM5 million, equivalent to $1.8 million, for the account of Deutsche Bank Compagnie Financi6re Luxembourg; and Swiss Francs 5 million, equivalent to $2.2 million, for the account of Swiss Bank Corporation. - 2 - In selling $9.5 million equivalent in participations, IFC, with the assistance of JB, has mobilized commercial credits on favorable terms and conditions for its Yugoslav client to finance viable investment opportunities. The package will be implemented quickly and will provide incremental foreign exchange benefits of about $20 million p.a. to the Yugoslav economy. The Corporation also provided project related technical assistance to help structure the sub-projects and assisted sub-borrowers in the formulation of long term modernization plans and business strategies. IFC has made 23 investments in Yugoslavia totalling $416 million equivalent, including $129 million from participants. Two of these investments were approved in FY85. The Corporation's current investments in Yugoslavia amount to $183 million in various industrial and financial sectors, including pulp and paper products, motor vehicles accessories, food and food processing, tourism, machinery, iron and steel, cement and construction materials, hermetic compressors, a physical medicine center and development finance. The two projects IFC approved recently include an investment in Sour Energoinvest, one of the country's largest enterprises and biggest exporters, guaranteed by Jugobank, to provide $11 million equivalent to finance the foreign exchange component of a package of seven export-oriented expansion projects; and (2) investments in Ljubljanska Banka, a leading Yugoslav bank, to provide a loan in several currencies equivalent to $55.3 million, to help finance the foreign exchange component of a package of more than 60 small- and medium-sized export-oriented investments.