Announcement of China Investment Bank to Improve its Technical Efficiency on June 7, 1984

FOR IMMEDIATE RELEASE SWorId Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A., BANK NEWS RELEASE NO. 84/89 Contact: P.B. Sison IDA NEWS RELEASE NO. 84/89 (202) 477-3573 June 7, 1984 CHINA INVESTMENT BANK TO IMPROVE ITS TECHNICAL EFFICIENCY Industrial ventures financed by the China Investment Bank (CIB) will be better designed and more carefully selected as a result of a project that is being supported by The World Bank with lending totalling $175 million. The CIB, which provides loans for small- and medium-sized industrial projects, will be strengthened through the introduction of modern technology and better project appraisal methods. The World Bank (the International Bank for Reconstruction and Development) and its concessionary lending affiliate, the International Development Association (IDA), will provide financing of $105 million and SDR 65.8 million ($70 million), respectively. CIB was established in December 1982. A year later, The World Bank provided CIB's first foreign exchange to be used for lending with a loan of $40.6 million and an IDA credit of SDR 28 million ($30 million). CIB's early emphasis has been on the development of textiles and other light industries. Recently it has been expanding its assistance to include enterprises engaged in chemicals, machinery, electronics, building materials, and metallurgy. Under the new project, 60-80 projects will be supported over the next one-and-a-half to two years. The project aims to help CIB appraise projects more effectively, especially in technical, economic, and marketing aspects. The CIB's appraisal manual is being revised with the help of The World Bank. The Bank's assistance will also enhance CIB's capacity to appraise larger and more complex industrial projects. Staff will be increased at CIB, and their training expanded. Local consultants will be hired to carry out market analysis. The institutional strengthening of CIB is particularly important during this period of rapid expansion of its investments. This will enable it to establish its credibility as a financial institution. The World Bank loan is for 20 years including five years' grace, with a variable interest rate, currently at 10.08 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances and a front-end fee of 0.25 percent on the amount of the loan. The IDA credit is for 50 years, including 10 years of grace; it carries no interest but has annual charges (0.5 percent on the undisbursed balances and 0.75 percent on the disbursed balances). NOTE: Money figures are expressed in U.S. dollar equivalents.