Tanzania - Third Investment Bank Project

FiLE '' B MvDocument of The World Bank FOR OFFICIAL USE ONLY 3 Report No. P-2 173-TA REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE TANZANIA INVESTMENT BANK WITH THE GUARANTEE OF THE UNITED REPUBLIC OF TANZANIA November 21, 1977  CURRENCY EQUIVALENT Tanzanian Shilling = US$0.12 US$1.00 = TSh8.30 (As the Tanzanian Shilling is officially valued at a fixed rate of 9.66 TSh to the SDR, the US Dollar/Tanzania Shilling exchange rate is subject to change. Conversions in this report were made at US$1.00 to TSh8.30 which is close to the recent average exchange rate.) ABBREVIATIONS ADS - Agricultural Development Services BIS - Basic Industrial Strategy CCM - Chama Cha Mapinduzi EADB - East African Development Bank EAC - East African Community NBC - National Bank of Commerce NDC - National Development Corporation NIC - National Insurance Corporation SIDO - Small Industries Development Organization TANU - Tanganyika African National Union TDFL - Tanganyika Development Finance Company, Ltd. TIB - Tanzania Investment Bank TRDB - Tanzania Rural Development Bank TIB's Fiscal Year: July 1 - June 30  FOR OFFICIAL USE ONLY TANZANIA - TANZANIA INVESTMENT BANK LOAN AND PROJECT SUMMARY BORROWER: Tanzania Investment Bank (TIB) GUARANTOR: United Republic of Tanzania AMOUNT: US$15.0 million equivalent TERMS: Repayable substantially in conformity with the aggregate amortization schedule for sub-loans and investments for which withdrawals from the loan account are approved or authorized. Interest rate would be 7.9 percent per annum. RELENDING TERMS: TIB would relend the proceeds of the loan at a minimum interest rate of 11 percent per annum. The maximum maturity of sub-loans will be 15 years including adequate grace periods. The exchange risk would be assumed fully by sub- borrowers. PROJECT DESCRIPTION: The purpose of the proposed project is to meet part of TIB's foreign exchange requirements to cover its commitments through December 31, 1980. More specifically, the project will enable TIE to finance the planned increase in and diver- sification of its operations. In addition to its traditional financing of manufacturing enter- prises, TIB expects to increase its work in agro- industries, transport and tourism. FINAL DATE FOR PROJECT SUBMISSIONS: December 31, 1980 FREE LIMIT: $800,0000 equivalent for individual sub-loans; $7.0 million equivalent aggregate limit. DEBT COVENANTS: Maximum debt/equity ratio of 3:1. This document has a restricted distribution and may be used by recipients only in the performance of their official duties, Its contents may not otherwise be disclosed without World Bank authorization.  PROJECTED TIB PERFORMANCE Year Ending June 30 1978 1979 1980 1981 1982 ----(TSh Million)-----------