Announcement of Financing in Morocco on December 21, 1962

Internati9nal Bank for Reconstruction and Development l~r 1 0 0 _,_a_,_a_H_s_T_!_~_!_~""""".~-~---·~-t-·i-~-~-s-~_,_N_~_!_·~_N_a_~-~-·e_o_._?_.__rp_T_EL._~-"~-~-· ~_:_,_E~_E_c_uT_,_vE_3_-_e_3e_o_ { ~ ) l F1(1-~!"1C, Bank Press Release No. 62/43 SUBJECT: Financing in Morocco IFC Press Release No. 62/11 Deceml:>er 21, 1962 '\ The·· Wot,1.d Bank and its affiliate, the International Finance Corporation, today \~\ announced that they will finance an expansion of the Banque Nationale pour le neveloppement Economique (BNDE), a development bank in Morocco. This :i.s the first time the World Bank and IFC have engaged in a joint financing, and is also the firRt of a number of combined operations now in prospect whereby the Bank will provide loan funds and the IFC will provide share capital for industrial development banks in the less developed countries. • Mr. Eugene R. Black, President of the Bank and of IFC, commented, "The Bank · has long considered that development banks have a strategic role to play in en-. c~uraging the establishment and growth of industry in developing countries. This i joint financing in Morocco demonstrates the comprehensive and versatile kind of sup- port that the World Bank and IFC, acting together, can give to these important in.st:ttutions." The world Bank has agreed to lend the Moroccan bank the equivalent,i~f $15 ·mil- lion in foreign exchange, and the IFC intends to invest 7.5 million Moroccan dir- hams (equivalent to US$1.5 million) in common stock of BNDE, representing three 1/''\,.. c;_uarters of a new stock issue. The Bank and IFC fin·1~.cing l_\ _/. / will substantially increase the funds available to BNDE for credits and other investments. BNDE will devote the major portion of its resources to financing private industrial enter- • pris~s,. thereby making an important contribution to the growth of industry in Morocco. (,t  - 2 - I/ !· Morocco's natural resources and physical advantages give strength end variety to the economy and provide potential for development. Its climate is in general favorable to agriculture, particularly with irrigation; it has numerous mineral deposits, including virtually inexhaustible amounts of rich phosphate rock; and it is relatively well equipped with modern transport, power and other facilities. Its , variety of natural resources offer considerable opportunity for industries process- ing and transforming raw materials. Moreover, its population of 12 million, often concentrated in large towns, constitutes a potential market for manufactured good.~ that is yet to. be fully exploited. Since World war II, a number of modern indus- tries have been established by Moroccan and foreign, mainly French, investors. In recent yea.rs, the Government, aware of the importance of a favorable investment climate, has introduced a number of financial. and fiscal incentives and offered selective tariff protection to new industries. one .of its measures to encourage economic growth was the establishment of the BNDE in mid-1959, with power to emplo:.r • S3. variety of investment techniques: it can grant long and medium-term loans, dis- ~ount medium.. term cre<tl.ts made by commercial banks; establish enterprises on its own initiative; take equity participations; and offer guarantees. BNDE is owned by both Moroccan and foreign investors. Its ~hare capital is now DH 20 million ( US$4 million equivalent), and ~11 be increased to DH 30 million. IFC will subscrib·e to DH 7 .5 million of the new share issue. The remainder will be taken up by two of BNDE 1 s present stockholders, the Moroccan Government which will subscribe to DH 2 m~llion and the Morgan Guaranty International Banking corporati0n ( i which, subject to the approval of the Board of Governors of the Federal Reserve System, will subscribe to nH 0.5 million. Although the Government was· initially the main shareholder, it has pursued a policy of selling its shares to other in- vestors and BNDE's stockholders alrea~ include important financial institutions in Belgium, France, Germany, Italy and the United States. After the distribution •  - 3 - ·~ of the new share issue, the Government will be in a minority position and both the Government and IFC are making arrangements to sell part of their shares to Moroccan private investors. BNDE has establishe~ itself in the Moroccan business community, and has already made an impac,t on the development of the Moroccan economy. From its inception in mid-1959 to June 30, 1962, BNDE made 23 direct loans amounting to nH 63 million. It I) haa assisted both public and private enterprises in establishing new plants or ex- panding existing ones in the fields of electric power, transport, agriculture, tex- tiles, food and beverages, chemicals, leather, paper, petroleum, refractory mater- ials, car and truck assembly and other metallurgical plants. By September 1962, BNDE's total medium and long-term resources amounted to al- most DH 100 million (US$20 million) which included share capital, reserves and bor- rowed funds. As a result of the world Bank loan and the proposed capitaJ. increase, BNDE' s resources will be increased to nH 185 million ( $37 million) which should :f'm.·- nish it with enough funds for its investment operations until about the ~nd of 196i.~. BNDE' s profits have been developt::ig satisfactorily; up to now they have been put into reserves. The World Bank loan was signed in Washington today. It was made to the Banque Nationale pour le Developpement Economique and is guaranteed by the Kingdom of Morocco. The loan will be operated. as a line of credit and will be committed, in \I parts, ~or individual projects to be agreed upon from time to time by the Bank and BNDE. The repayment of each part of the loan will be in semi-annual installments over not more than 15 years according to a schedule tailored to the needs of the project, and determined at the time of the commitment. ·· Interest will. be applied to each part of the loan at the World Bank's rate current -when such pa.rt is committed for one of BNDE's projects. • IFC 's investment will consist of DH 7. 5 million of common stock of BNDE. The subscription will be made upon completion of the necessary legal formalitjes, c~- pected to be in January 1963.  INTERNATIONAL FINANCE CORPORATION .; 1818 H STREET, N.W., WASHINGTON 25, 0. C. TELEPHONE: EXECUTIVE3-6360 IFC Press Release No. 62/12 SUBJECT: George L. Martin appo:in~ed Director of Marketing ot December 28, 1962 IFC. The International Finance Corporation announced today that Mr. George L. t:.~ Martin, Director of Marketing of the World Bank}·\~--~.p . ___,) been appointed Director , ..,..... of Marketing for the Corporation as well. Mr. Martin will assume this additional post on January 1, 1963. Mr. Elliott Lee, who has been IFC Special Representative in the United States since 1960, will retire at the same time. Mr. Martin, a native of Houston, Texas, was appointed Dir~ctor of Marketing of the World Bank on November 1, 19;0, and has headed its Mark~ting Department • and New York Office since :that date. ing the Bank has sold 14 Since Mr. Martin became Director of Market- i_ssues in the United States investment market, and has market.ed the Bank 1 s dollar and non-dollar issues in more than 40 other countries. Mr. Ma:rtin has also served as adviser on capital formation and the development of ' securities markets in a number of the Bank's member countries-. Before coming to the World Bank, Mr. Martin was active in the investment market in Chicago. From 1928 to 1934, he was manager of the Municipal Department of the Guaranty Company of New York in Chicago; and from 1934 to 1940 he was Vice-President of Kelley, Richardson & Company. Immediately before his associatio~ with the Bank'he was president of the investment banking .firm of Martin, Burns & Corbett, Inc., of Chicago. _/, :''./ Mr. Martin served three years as a governor of the Investment Bankers Association of America, and for two years as chairman of the Association's ..• Municipal Committee. He is a past president of both the Municipal Bond Club of Chicago and the Bond Club of Chicago.  (j t INTERNATIONAL FINANCE CORPORATION . 1 8 1 6 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVES-6360 IFC Press Release :Ho. 63/I:' Sl.JB,JECT: Investment in Morocco January 16, 1963 The International Finance Corporation, an affiliate of the i-(orld Bank,· today joined the Government of Morocco, private Moroccan investors and leading financial institutions in Europe and the United states as a shareholder in the Banque Nation~le pour le neveloppement Economique. IFC's participation co~siderably in- creases the already heavy international financial support of BNDE, and will enable the Banque greatly to expand its activities in helping to finance the inqustrial • growth of Morocco • IFC is participating in a new stock issue which will increase BNDE's capital by 10,000,000 Moroccan dirhams ( equivalen{)to US$2 million). IFC is subscribing rR 7:500,000, while the·Moroccan Government subscribes DH 2,000,000 and the Morgan Guaranty International Banking Corporation, of New York, subscribes DH 500,000. S:he total stock of BNDE thereby is increased to DH 30,000,000. The new stock issue is the most recent measure taken to attract outside invest- // rnent to My,rocco and to promote additional private investment within th~f.1/ country. t Beyond thaft, IFC and the Government have agreed to make equal amounts of tlfeir ~ha.re- holdings, tt\ the extent of 121, of all stock outstanding, available for sale to the Moroccan public. At the same time, BNDE has decided to intensify a recent trend in itn policy: it will devote the major part of its resources to assisting enter- •• prises that a.re industrial in character and essentially private in ownership . The new investment establishes a precedent for IFC. Its investment is part of a combined operation in which its parent organization, the World Bank, already  " - 2 - hc...s made a loan of $15 million to BNDE. This is the first time the World Bank and · • IFC have engaged in a joint financing, and is the.first of a number of combined operations now in prospect whereby the Bank will provide loan funds and the IFC will provide share capital for industrial development banks in the less developed countries. The overseas shareholders of BNDE, in addition to Morgan Guaranty International, include ins titut ions domiciled in France, Italy,,. the Federal Republic of Germanf\. and Belgium. The French group consists of a number of autonomous financial agencies of the French Government} including the Caisse de Depots et consignations and the Caisse Centrale de Cooperation Economique. The other institutions are well-known banks, as follows: in Italy, the Banca Nazionale del Lavoro, the Institute Mobilia:re Italiano and the Banca commerciale rtaliana;,;- in Germany, the Deutsche B£>.nk, the Dresdner Bank, the Commerzbank and the westfalenbank; and in Belgium, the Banque Lambert. Shares are held in Morocco by the Government, which continues to be the largest single shareholder, by Moroccan nationals and by 18 Moroccan subsidiaries of foreign banks and insurance companies. BNDE is a versatile financial instrument. rt is the only institutional source of long-·te:cm industrial capital in Morocco; it may also make medium-term loans.r~~y discount medium-term credits made by commercial banks, may establish enterprises on its own init~ative, may subscribe to shares in new or expanding enterprises, and may guarantee investments by others • The Government established BNDE in 1959 as part of a program to encourage investment and economic development. With its new financial resources, BNDE is 11 now in a position vigorously to promote the industrial sector of the economy. • Morocco's natural resources and physical advantages give strength and variety to the economy and provide good potential for development. The climate is in general • - 3 - favorable to agriculture, es~ially ·where irrigation is available; there are numerous mineral deposits,, including extremely large deposits of phosphate rock; !:i.~li. transportation, power and other utiliti~s a.re modern and adequate. BNDE already has established itself in the Moroccan business community and has made an impacf on the development of tbQ Moroccan economy. From its inception in mi.d-1959 to mid-1962, BNDE had made direct loans amounting to DH 63 million. It had assisted_ both public and private enterprises in establishing new plants or expanding existing ones in the field of electric power, transportation, agri- culture, textiles, food and beverages, chemicals, leather, paper, petroleum, re- I fractory materials, ca.rand truck assembly plants and other metallurgical works • • •