Announcement of Turkey Private Investment Credit Project on June 17, 1991

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 91/92 Contact: Fawzi Rihane Tel: (202) 473-2675 TURKEY: PRIVATE INVESTMENT CREDIT PROJECT The following is information on a project approved by the World Bank's Board. DATE: June 17, 1991 WORLD BANK GROUP SUPPORT: World Bank loan: $200 million. The loan is for 17 years, including five years of grace, with a variable interest rate, currently 7.73 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. TOTAL COST: $401 million OTHER FINANCING: Private enterprises, $200 million; Participating financial institutions, $1 million IMPLEMENTING AGENCY: Undersecretariat of Treasury and Foreign Trade ESTIMATED COMPLETION DATE: 1996 PROJECT DESCRIPTION: The objectives of the Private Investment Credit Project are to: (a) support financially and economically viable private investments in areas of Turkey's comparative advantage, especially export-oriented activities, excluding agriculture; (b) assist Turkiye Sinai Kalkinma Bankasi (TSKB) and Sinai Yatirim ve Kredi Bankasi (SYKB) in their business and resource diversification efforts to enable them to grow in an increasingly competitive financial system; and (c) support the implementation of the government's financial sector reforms at the intermediary level by ensuring the financial stability of participating private commercial banks that are able to develop into intermediaries capable of mobilizing and allocating long-term resources more efficiently. The project includes: (a) long-term funds for private investments to help sustain Turkey's import drive; these funds will be sublent through 10 private financial institutions to subborrowers, thus strengthening individual financial institutions and improving the efficiency of the financial system; and (b) a technical assistance component of $1 million to strengthen the participating financial institutions, with particular focus on improving their project finance techniques, systems, and procedures through staff training and consultancy services.