Announcement of IFC Investment in Compania Pino Celulosa de Centro America, S.A. (Copina), Honduras on February 4, 1969

. " . . FOR IM_MEDIATE RELEASE . . . 1 INTERNATIONAL FINANCE CORPORATION . 1 8 1 8 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IFC News Release No. 69/2 SUBJECT: IFC Investment in Compania Pino February 4, 1969 Celulosa de Centro America, s.A. (Copina), Honduras Under New Policy IFC Joins Group Promoting New Honduran Paper Company Under a new policy of development investment promotion the International Finance Corporation, a World Bank affiliate,* announced today it is joining in arrangements to finance the initial stage of a projected pulp, paper and lumber operation in Honduras. A new company, Compania Pino Celulosa de Centro America, s.A. (Copina), set • up at Tegucigalpa to conduct studies and negotiations, carries forward a project that has a central place in Honduran economic aspirations and that has had major support from the Honduran Government during several years of preliminary work that made possible the formation of Copina. The aim of the project is to give the Honduran economy, and Central America as a whole, an economic boost by industrial utilization of Honduras' richest known natural resource, its 3 million acre Olancho forest preserve. It is hoped that Copina will become one of Central America's largest industrial enterprises. IFC invested in Copina under a new policy of giving limited financial support and technical assistance to embryo organizations established to lay the ground- work for full-scale development investments, where it is felt that the completed project would be a sound private business enterprise suitable for IF~ financing. ~ * IFC is the affiliate of the World Bank that i~vests in private industry in developing member countries. (more) Ttt , l t • - 2 .. In its present stage, Copina has $500,000 equivalent capital, of which IFC is cQttlnitting up to $50,000. The International Paper Company is providing the major share of Copina's capital, and will assume managerial responsibility. The Honduran development bank, Banco Nacional de Fomento, is the second largest shareholder. ADELA Investment Company, Central American Bank for Economic Integration, IFC, Standard Fruit Company and United Fruit Company are supplying the balance in I equal parts. If the stage is reached where the full-scale project can be implemented, further financing will be considered by the current sponsors, and, possibly, by others. At that time some $77 million further capital would be required. ~ Editors: The following material provides additional information on IFC's new development investment promotion role. The new policy on which IFC's participation in the Honduran project is based is designed to permit the Corporation to increase the range of help it can give in assisting potentially sound private enterprises in developing member countries through study and planning stages and into the stage of productive businesses. The form IFC's assistance will take will be highly flexible, so as to meet the many kinds of needs for such help encountered in the varying circumstances of many different kinds of projects in many countries at various stages of economic development. The new policy takes advantage of the fact that IFC is the member of the World Bank Group authorized to provide capital to eligible projects in • any form. (more) • - 3 - IFC's first investment under the new policy, in December 1968, wns in a pilot company -- Hoturismo -- established in Colombia to promote investment in. tourism projects there. Also under the new policy, the Corporation is undertaking pre- investment studies in Indonesia. IFC can have up to $250,000 of its funds com- mitted to promotional projects at any one time. In some cases, IFC will give financial and techncial support in the pre- investment stage of potential projects, by paying part of the costs of feasibility studies, and, in general, helping to pay the costs of putting together all the elements of a project, industrial, technical and financial, including the search for an appropriate business spo11tsm. . In other cases, such as in the Copina project, IFC will join other investors in putting equity funds into a pilot corporation intended to complete studies • and negotiations needed to permit expansion of the piloc company, if successful, into the full-scale project. 4/: •