Announcement of IFC Helps Rehabilitation of A Major Tea Operation in Uganda on October 17, 1983

1818 H Street, N.W. International Finance Corporation· Washington, D.C. 20433, U.S.A. FOR RELEASE: CONTACT: Monday, October 17,'1983 Monique Amaudry (202) 676-0578 IFC Press Release No. 84/12 IFC Helps Rehabilitation of A Major Tea Operation in Uganda The International Finance Corporation is helping finance an US$8.8 million project to rehabilitate three tea estates and associated factories belonging to the Toro and Mityana Tea Company Limited (TAMTECO), of Uganda. Three European development institutions and a local institution will also participate in the financing. The rehabilitation, for which some US$5.3 million is required in foreign exchange, will entail pruning, fertilizing and weeding about 2,000 hectares of abandoned tea; purchasing new factory equipment and repairing some of the existing equipment; replanting 550 .ihec·tares of fuelwood plantations and restoring transport facilities, farming equipment and maintenance workshops. The project is expected to be completed by June 1987 and will restore initial production, which prior to the 1972 military regime, averaged 5.5 million kilograms per year of exportable tea, approximately one quarter of Uganda's tea exports and employed over 5,000 people. It will generate substantial amounts of foreign exchange earnings. TAMTECO's three tea estates and their associated factori~s are currently owned by the Uganda Government (51 percent) and by the Mitchell Catts PCL, a UK public cqmpany which owns 49 percent of TAMTECO and which provides ~nagement for the Company. Financing for the rehabilitation includes an IFC loan of US$1.9 million equivalent, of which Sterling Pounds 824,000 is for IFC's own account and US$0.5 million or its equivalent is for the account of Societe internationale financiere pour les Investissements et le Developpement en Afrique of Switzerland (SIFIDA) which is participating in the IFC loan. The Commonwealth Development Corporation (CDC) of the UK is making a loan equivalent to US$1.4 million; Deutsche Entwick- lungsgesellschaft (DEG) of the Federal Republic of Germany, a loan equivalent to US$0.75 million and the Uganda Development Bank, a loan equivalent to US$1.25 million.  - 2 - Cash generation amounting to US$3.50 million equivalent will complete the financial plan. · The project represents one of the first joint venture efforts to receive foreign financial assistance for its rehabilitation program. The Uganda Govern- ment is anxious to see the private sector play a major role in the development of Uganda's mixed economy. It fits in with the Government's policy to give highest priqrity to the rehabilitation of existing enterprises, especially those concentrating on agricultural exports. Tea is Uganda's third largest foreign exchange earner. At the request of the Company, IFC played a major role in raising 1 the total loan financi~g for the project. ; \