Announcement of Twelve Million Five Hundred Thousand US Dollars Loan to NIBID in Greece on March 14, 1968

f,, • 1'·818 1-1 STREET, N.W .. WASHINGTON · - - - - - - - - - - - - - - - - - - - - - - - - - - _ . {/.) Bank Preas R~lease No. 68/13 D. C. 20433 TELEPHONE: /') ,.... EXECUTIVE 3-6360 ! - - - - - - - - - - - - - - - - - - - - - March 14, 1968 Subject: $12.5 million loan to NIBID in Greece The World Bank has appro,1ed a loan equivalent to $12.5 ·million to tile National Investment Bank for Industrial Development (NIBID), a private development finance company in Greece founded in 1963. In 1965 NIBID increased ~.ts capital, part of which·was subscribed by the International Finance Corporation, an affiliate of the Wo~ld Bank, and in 1966 NIBT.D applied for a loan from the Bank. The Bank loan will increase NIBID 1 s resources for financing the foreign exchange costs of in- vestments by private enterprises in manufacturing, mining, shipping and tourism. •• NIBID was established by the National Bank of Greece (NBG), the larg~st com- ct~~cial bank in the country, and 10 foreign banks. Subsequently, three additional foreign banks, as weli as the International Finance Corporation (IFC), subscribed to NIBID' s share capital when it was lo.,creased by $4 million to the equtvalent t,f ~10 million. NIBID seeks to promote the growth of private enterprises in Greece by pro- viding medium and long"'.'.'.term finance to new and existing enterprises, assisting in~, the development of a capital market, promoting joint ventur-'rs of Greek and fo1~eign \_,; enterprises, and advising private enterprises on financial and other matters. Since it began operations in 1964, NIBID has approved 54 investments totaling 763 million drachmas ($25.4 million). Most of these investments 'have been in the form of loans. The industries assisted include cement, metal products, synthetic • fibers, textiles, paper, food pro~ucts, building materials, electrical goods, chemical products, tourist facilities and shipping. About half the investments were ·made in new firms and half were for the expansion of existing enterprises. / tt1ore  - 2 - In order t() meet its expected commitments, NIBID will need substantial addi- tional fu1ids. The World Bank loan of $12. 5 million will i!rtcrease NIBID' s as!iets to the eq,1\i.J'alent,of $43 million; its other resources consist of paid-in share • capital o(, D~ 300 million -- of which NBG holds 55%, 13 foreign, banks 38%, and IFC 7% -- i~eserves of Dr 15 million, and two loans of Dr 300 million each from NBG and the\ Bank of Greece. In addition to its investments, N,IBID has made progress toward the achieve- ment of 'tts other objectives. In association with an internationally-known con- sulting firm it has recently established a Greek firm of consultants. The new i) firm will help NIBID. with the technical evalua~ion of projects submitted to it, and provide engineering services both to NIBID's own clients and to other com- panies. To further th~ aim of developing the Greek capital market, NIBID's management is seeking to create securities which can eventual1y be sold to the. ~ public. The World Bank loan to NIBID will be gu~ranteed by The Hellenic State .. I/"·:) Amortization will be in semi-annual installments payable "over a period of up to 15 years from the date the corresponding amounts are credited to NIBID's account~ Whenever part of the loan is credited to NIBID' s accountt the inte:rest rate (ct charged by the Bank J1 that part of the loan will be the Bank's current standard ) \ rate in effect at that time. ···-.·, u