Announcement of New Challenges and Greater Role for IFC in Mexico January 22, 1987

/ inance Corporation Washngn D C0433 USA Thursday, January 22, 1987 CONTACT Monique Amaudry Press Release 87/34 (202) 676-9331 IFC SEES NEW CHALLENGES AND GREATER ROLE IN MEXICO A number of recent positive developments in Mexico will enable the International Finance Corporation to expand significantly its support to private sector activities in the country. "We are very optimistic about Mexico," announced Sir William Ryrie, IFC chief executive, at a recent press conference hosted by the Ministry of Finance in Mexico. "We believe that the investment climate is improving and we expect to play an important catalytic role to contribute to help raise investors' confidence," he declared. IFC is an affiliate of the World Bank group and the leading private sector multilateral agency providing equity investments and long-term loans without government guarantee to private enterprises in developing countries. Sir William met today with government leaders and high-level business representatives to discuss IFC's investment strategies in Mexico. IFC has been active in Mexico since the early 1970's and has invested approximately $814 million in 18 companies, primarily in the basic industries -- steel, cement, pulp and paper, textiles. Currently, the Corporation holds investments worth $150 million in about 18 companies in Mexico. In addition to investments in infrastructure projects, the Corporation has also invested in tourism, petrochemicals, agro-industry, manufacturing, mining and services. - MORE - - 2 - During 1986, IFC's Board of Directors approved five export-oriented projects worth $40 million, in tourism, pulp and paper, agro-industry, chemicals and construction/engineering services in Mexico. "As Mexico is taking courageous steps to reduce public expenditures, there is a greater need for private sector involvement and for expanding private sector activities," said Sir William. Under the GATT agreement, Mexico has opened its door to greater competition and created a need for invetsments in modern technology and improved efficiency in existing plants. Mexican industrial groups are serious about new investments in modernization and export-oriented projects and are actively seeking to carry out new ventures. Meanwhile, aware of improving investment opportunities, certain foreign companies are actively seeking to invest in Mexico. To respond to Mexico's economic development needs, IFC plans to expand its operation in the country by providing increased financial and technical assistance while acting as a catalyst to encourage both local and foreign investors. In addition to its regular project financing operations, the Corporation is also prepared to make investments in corporate restructuring, disincorporation, as well as in non-traditional approaches such as service contracts and leasing of assets. Finally, through its capital market activities, IFC will consider new financial mechanisms through which it can assist private sector growth in Mexico. - END -