Announcement of IFC Helps Sugar Industry in Uganda on October 17, 1983

\, __ ! DC?@ 1818 H Street, NW International Finance Corporation Washington, DC. 20433, U.SA FOR RELEASE: CONTACT: Monday, October 17, 1983 Monique Amaudry (202) 676-0578 IFC Press Release No. 84/11 IFC Helps Sugar Industry in Uganda The International Finance Corporation (IFC) will help finance the $75 million equivalent project of Sugar Corporation of Uganda Limited for the rehabilitation of a cane plantation and the establishment of a new sugar factory. At the Company's request, IFC 11acted as lead financial institution in mobilizing the financing for the project. if Located in Lugazi, the project will rehabilitate SCU's 9,182 hectare Cqne plantation including clearing 2,722 hectares of fields with overgrown bush, opening the drainage system in 1,800 hectares of a major swamp area choked by weeds, and replanting the entire plantation. A new fleet of farm tractors., farm impleJnents and cane transport will be acquired. The new sugar factory is expected to produce 60,000 tpa of mill white sugar. The project.is scheduled for completion in early 1985 and it will create jobs for more than 6,000 p~op'le in an agricultural area. Since all it!?· output will be 0 sold in the domestic market, the project will eliminate importing of sugar and result in substantial foreign exchange savings of US$8.7 million to Ugan4a. Loan financing for the project include:. US$1.23 million eqtlivalent rfrom the Government of Uganda; US$2.6 million equivalent from the Government of India; US$17.0 million equivalent from the African Development Bank; US$8 .0 million equivalent from t Banque Arabe pour le Dlveloppement Econ01nique en; Afrique; and credits from, the Inter- national Development Agency equivalent to US$3. 7 million passed OI1l to the Company by the Government. In addition, the International Finance Corporation is making US$8.0 million loan; the Kuwait Fund for Arab Economic Development, a US$10 million loan equivalent; suppliers credits from Export and Import Bank of India will amount to US$8.0 million equivalent; and the Commonwealth Development Corporation is consider- ing a loan to complete the requirements of the profect.  - 2 - i) SCU is owned by the Government of Uganda (51 percent) and by the Mehta Group (49 percent). Income notes amounting "to US$2~-j 3 million equivalent from the Government :? t'. of Uganda and to US$4.0 million equivalent from the Mehta Group will strengthen the Company's equity base. ,( Other financing include a US$444,000 equivalent deposit made 6~: the Govern- ,me~t in 1978 with an equipmen,t supplier on behalf of the Company plus capitalized interest during construction of US$1.9 million equivalent • . cash generation amount- ing to about US$2.0 million equivalent will1)complete the financial plan. SCU was establi~hed in 1980 i>as part of a Government recovery program giving ·., priority to increas;lng production of basic consumer goods. The program clearly indicates that the Government of Uganda wants to encourage a major role for the prfvate sector in the development of a mixed economy. l.) (1 " ..