Announcement of World Bank Loan of Fifteen Million Dollars for Industrial Credit in Honduras on February 8, 1979

FOR IMMED!ATE RELEASE ·. •World Bank 1818 H Streel, N.W. 1 Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/49 February 8, 1979 WORLD BANK LOAN OF $15 MILLION FOR INDUSTRIAL CREDIT IN HONDURAS An industrial credit project in Honduras is being supported by a $15 million V: "~ Bank loan. The project will fill a major gap in term financing of 1.;~Jstrial projects by providing funds for about 165 subprojects, mainly forestry and wood processing. The total cost of direct investment financed under the project is estimated at $28.4 million. The project will be carried by the Central Bank 1 s National Industrial Development Fund (FONDEI). FONDEI will make medium- and long-term loans for industrial subprojects through the Forestry Development Corporation and other financial intermediaries. The project wi 11 help Honduras to build up an institutional capability in selecting, preparing, and financing efficient industrial • investment projects, particularly of small and medium manufacturing firms and of projects in the wood industry. The subprojects financed are expected to have a significant economic impact. The bulk of financing will go to those subsectors which depend on domestic raw materials and which provide most of manufactured exports such as lumber and wood products, food products, textiles and garments, and chemicals. The total investment generated by the project is expected to lead to the creation of about 4,000 new jobs. The wood subprojects will largely benefit families of modest means living in small towns and villages in the Comayagua forest region. The project includes a technical assistance program designed to ensure effective utilization of small-scale industry credit. It wi 11 be financed by the Government and a United Nations Development Programme (UNDP) grant . This is th~ second World Bank loan to help strengthen institutional arrangements for industrial finance in Central America. The first such loan, for Costa Rica, was approved in June 1978. The $15 million loan to the Republic of Honduras has a term of 15 years, including 5 years of grace, with interest at 7% per annum. The Banco Central de Honduras' address is Av. Ramon Molina Sa. Calle, Tegucigalpa, Honduras (Cable: BANTRAL) • • NOTE: Money figures are expressed in U.S. dollar equivalents.