Finance Corporation (IFC) Is a Multilateral Development Institution

ANNUAL REPORT .1 * 9 * 8 * 9 13331

Public Disclosure Authorized Internai~onal Finaince Corporation

(4 S8 W > A tQi !0, Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized AIMS AND OBJECTIVES

The International Finance Corporation (IFC) is a multilateral development institution. An affiliate of the World Bank, IFC was established in 1956 to further economic growth in its developing member countries by promoting productive private investment. Its equity capital is provided by its 133 member countries-both developed and developing- which collectively determine its policies and activities. IFC's principal tasks are to provide and bring together the financing, technical assistance, and management needed to make good use of investment opportunities in the developing world. IFC provides long-term loans and risk capital without government guarantees to enterprises in the private sector. Its financial assistance is designed to fit the special requirements of its client companies and takes into account their ability to raise funds from other sources on reasonable terms. In all of its activities, IFC works to raise investor confidence and employs its status as an international institution to facilitate the process by which investors and governments ar- rive at mutually satisfactory agreements. IFC also seeks to encourage the flow of private capital, both domestically and internationally, to developing countries through the establishment or expansion of capital markets and financial institutions. It offers technical assistance to member governments in support of their efforts to create an environment that will encourage domestic and foreign investment. HIGHLIGHTS OF THE YEAR

1989 1988 New investmentsapproved 90 95 Totalinvestments (gross) $ 1.7 billion $ 1.3 billion Net investmentsfor IFC's account $ 1.3 billion $ 1.0 billion Total project costs $ 9.7 billion $ 5.0 billion Net commitmentsfior IFC's account $ 1.2 billion $ 1.1 billion Net disbursementslor IFC's account $ 870 million $ 762 million Net income $ 196.5 million $100.6 million Paid-in capital $ 948 million $ 850 million Accumulatedearninigs $ 635 million $ 438 million Borrowingsfor the year $ 845 million $ 747 million Totaldisbursed loan and equity porffolio for IFC's account $ 2.8 billion $ 2.3 billion

page

15 The volume of net investment approvals and the disbursed portfolio rose to 17 record levels.

Net income doabled for the third successive year, mainly because of 19 substantialcapital gains.

21 The first public issue of IFC's debt securities received triple-A ratings.

The new Corporate Finance Services group will allow IFC to expand its 43 activities in corporate restructurings and privatizations.

The Africa Enterprise Fund, which will finance small and medium-size 44 projects in Africa, began operations in March 1989.

46 The African M[anagementServices Company was launched in April 1989 to provide training and short-term management assistance to African enterprises. Acronyms

AEF Africa Enterprise Fund AMSCo African Management Services Company APDF Africa Project Development Facility ASEAN Association of Southeast Asian Nations CPDF Caribbean Project Development Facility EC The European Community EMDB Emerging Markets Data Base FIAS Foreign Investment Advisory Service IBRD International Bank for Reconstruction and Development (The World Bank) IMF International Monetary Fund MIGA Multilateral Investment Guarantee Agency OECD Organisation for Economic Co-operation and Development, comprising Australia, Austria, Belgium, Canada, Denmark, Finland, France, Federal Republic of Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States OPEC Organization of Petroleum Exporting Countries UNDP United Nations Development Programme

Abbreviations

BOT build-operate-transfer bpd barrels per day FY fiscal year GDP gross domestic product GNP gross national product LIBOR London interbank offered rate mmcfd million cubic feet per day mtpd metric tons per day mtpy metric tons per year MW megawatt tpy tons per year

Notes and Definitions

1. lFC's fiscal year runs from July I to June 30. Thus, fiscal year 1989 (FY89) began on July 1, 1988 and ended on June 30, 1989. 2. The World Bank Group includes the World Bank, IFC, and MIGA. 3. In this report, investment amounts are generally given in U.S. dollars, regardless of the original currency or currencies of the investment, based on the exchange rate in effect on June 30, 1989. 4. Figures given in this report in connection with investments may refer to the following: (a) Approvals Loans, guarantees, or equity investments approved during FY89. (b) Commitments Loans, guarantees, or equity investments for which agreements were signed by IFC during FY89. (c) Disbursements Loans and equity investments (including underwritten offerings) actually disbursed during FY89. 5. Figures cited in this report may refer to either net or gross investments: (a) Net investment Amount lent or invested for IFC's own account, exclusive of funds provided by others. (b) Gross investment Total investment, including both IFC's loan or equity participation and funds provided by other investors and lenders.

6. In some tables, totals may differ from the sum of individual figures because of rounding. TABLE OF CONTENTS Intemational Letter to the Board of Governors 2 Finance

The Five-YearProgram and Fiscal Year 1989 Reviewed 3 Program Objectives and Outcome Compared 3 Corporation Main Activities of the Five-YearProgram 4 Fiscal Year 1989 in Review 6 Looking Ahead 9 Annual Report

Investment Climate 11 1989

Report on Operations 15 Investment Review 15 The Portfolio 17

Financial Review 19

Regional Reports 23 Africa 23 Asia 26 Europe and the Middle East 30 Latin America and the Caribbean 33

Capital Markets 37

Other Operations 40 Syndications 40 Fee-Based and Other Advisory Services 43 Africa Enterprise Fund 44 Africa Project Development Facility 45 African Management Services Company 46 Caribbean Project Development Facility 47 Foreign Investment Advisory Service 48 Technical Assistance and Technology Transfer 48

Personnel Management and Administration 50

Financial Statements 51

Appendices 61 June 30, 1989 TO THE BOARD OF GOVERNORS,

The Board of Directors of the International Finance Corporation has had this Annual Report prepared for the fiscal year ending June 30, 1989 in accordance with the By-Laws of the Corpora- tion. Mr. Barber B. Conable, President of the Corporation and Chainnan of the Board of Directors, has submitted this Report, together with the accompanying audited financial statements, to the Board of Govemors.

The Directors are pleased to report that in fiscal year 1989 IFC continued to expand its investment and advisory activities in its developing member countries while further strengthening its financial position. The Corporation reached a major milestone when its first public issue of debt securities was awarded AAA and Aaa ratings by the two leading rating agencies in the United States.

The Board expresses its appreciation to the staff of IFC for their contribution to the success of the Corporation during the year.

Board of Directors Directors Alternates Fawzi Hamad Al-Sultan Mohamed W. Hosny Paul Arlman Cvitan Dujmovic Mourad Benachenhou Salem Mohamed Omeish Gerhard Boehmer Michael von Harpe Frank Cassell J.A.L. Faint E. Patrick Coady Mark T. Cox, IV Jacques de Groote Bahar Sahin Mario Draghi Rodrigo M. Guimaraes J.S.A. Funna Jabez A. Langley Jonas H. Haralz Veikko Kantola Chang-Yuel Lim Robert G. Carling Andre Milongo Jean-Pierre Le Bouder Raymundo Morales Felix Alberto Camarasa Jorge Pinto Francisco Vanninil Helene Ploix Stephane Pallez Frank Potter Clarence Ellis Mohd. Ramli Wajib Le Van Chau C.R.Krishnaswamy Rao Sahib M. Mustafizur Rahman Masaki Shiratori Yukio Yoshimura Jobarah E. Suraisry Abdulaziz Al-Sehail Eduardo Wiesner Pedro Sampaio Malan Zhang Junyi Jin Liqun

1. To be succeeded by Edgar Ayales effective July 1, 1989.

2 THE FIVE-YEAR PROGRAM AND FISCAL YEAR 1989 44 REVIEWED

1..

ISCAL year 1989 marks the completionof - lFC's present Five-Year Program. Despite difficult economic conditions in the developing world, particularly during FY85-86, most of the Program's objectives were achieved and some were surpassed. IFC's growth over the period, supported by the doubling of its authorized capital from $650 million to $1,300 million in December 1985, has made the Corporation a significantly larger and stronger institution, able to offer its developing member countries a greater volume and variety of services.

IFC is working with the Government of Gabon and project PROGRAMOBJECTIVES AND sponsors to minimize disruption to the natural environment in OUTCOMECOMPARED connoction with the development of the Rabi-Kounga oil field.

This review left investment plans little changed, but The FY85-89 Program called for the Corporation reonzdtesoe-ha-xetdicesso to undertake more than 400 investments, at a total precognizedthe slower-than-expected increases of cost for the account of IFC of $4,400 million. This project approvals in Africa and the energy explora- meant average meantavergeannualaual growthgowthrate rates overoverthe the five-ive-tion sector; a reduction in those two areas was coun- year period of over 20 percent in the volume of in- terbalanced by increases in Latin American and vestments approved and 7.5 percent in the number Caribbean projects, capital markets activities, and of projects. The underlying expectation was that corporate restructuring work. The expected levels of IFC investment activities would expand strongly, in total disbursements over the five-year period, and of line with world economic prospects: growth in the end-of-period disbursed portfolio, were reduced sig- industrialized countries was already robust, and the nificantly, as was the volume of participations by developing world appeared to be recovering from commercial banks in IFC's syndicated loans. Net in- the 1981-82 recession. come forecasts were revised slightly upwards, how- In the first two years of the Program, IFC ever, with a substantial increase in liquid asset achieved its overall operational objectives in terms income more than offsetting reduced loan income of the number of approved projects and the volume and higher borrowing charges. of investments. In several areas, however, activity bi the event, IFC's performance during the sec- ran below target, reflecting the recurrence of eco- ond half of the Program has been stronger in almost nomic difficulties in much of the developing world- all areas than anticipated at the mid-term review. particularly the most highly indebted countries. Both total disbursements over the five years IFC's annual disbursements and levels of disbursed ($2.551 million) and the disbursed portfolio at the portfolio were adversely affected by prepayments of end of FY89 ($2,793 million) exceeded mid-term fixed-interest loans and, to a lesser extent, by loan expectations. The number and volume of total proj- droppages and cancellations; non-accrual rates on ect approvals were slightly above target, and the geo- the existing portfolio began to rise; and in two spe- graphical distribution was close to plan. The volume cific areas of IFC's business, investments in sub- of corporate restructuring and capital markets pro- Saharan Africa and in oil and gas exploration, there jects comfortably surpassed both the original and was a scarcity of suitable projects. the increased mid-term objectives for these activities. In early 1987, halfway through the FY85-89 pro- The original Five-Year Program objectives have gram, a review of IFC's objectives was carried out. turned out to be particularly conservative in termns

3 of IFC's financial results. The Corporation's income portfolio also grew significantly, from $1,447 mil- from equity investments and liquid assets exceeded lion at the end of FY84 to $2,793 million at the end expectations by wide margins. Although loan in- of FY89. In FY84 IFC disbursed $212 million in come was slightly below the original target, total loans and $26 million in equity; in FY89 loan dis- net income over the five years was, at $404.6 mil- bursements were $749 million and equity disburse- lion, more than double the $189 million originally ments $121 million. projected. By contrast, administrative expenses Funds mobilized by IFC through joint financings, turned out to be 10 percent lower than forecast in syndications, and underwritings increased by about the original Five-Year Program. JIFC'spaid-in capital 37 percent per year-from $2,092 million in FY84 and accumulated earnings reached an above-target to $8,403 million in FY89-despite the reluctance figure of $1,583 million at the end of the Program, of many investors and lenders to increase their expo- leaving the Corporation with a sound financial base. sure in the highly indebted countries. On the average, IFC mobilized five dollars from other sources of financing for every dollar it invested itself. Improvements in IFC's internal procedures have, 5,000 _ in part, been responsible for the growth and en- PORTFOLIO hanced quality of its portfolio. IFC's project ap- US$Millions proval process has been streamlined, particularly as regards smaller projects, and its use of financial in- 4,000 _ _ termediaries for on-lending and joint lending has increased. The portfolio has benefited from closer supervision and the restructuring of a number of companies in difficulty. The Corporation has also in- 3,000 - - _ _ _ troduced a variety of new lending instruments and policies to enable its clients to benefit from developments in world financial markets. It broadened and diversified the range of equity-type instruments of- 2,000 - - fered to its clients. In addition to continuing to take straight equity positions, the Corporation has increasingly emphasized financing through equity-type instruments including subordinated and convertible 1,000 g gloans, income notes, put options, and preferred shares. Several special initiatives undertaken by IFC dur- igthe Five-YearProgram have had a positive im- 1985 1986 1987 1988 1989 pact. One of these was in the area of capital Total markets. Fifty-nine new investments in financial institutions in developing member countries were ap- Heldfor Others proved. In line with the goal of encouraging flows of equity capital to developing countries, including some heavily indebted countries, IFC promoted various new types of international portfolio investment. MAIN ACTIVITIES OF THE FIVE- It pioneered the successful development of privately YEARPROGRAM placed investment funds-like the Emerging Mar- kets Growth Fund and the EmergingMarkets Invest- ment Fund-which invest in securities in a range of During the program period, the volume of invest- developing countries. It also pioneered the development approvals grew by 28 percent per year on aver- ment of country funds-like the publicly placed age. In FY84, IFC approved $391 million in Thai Fund, Inc. and the privately placed Equity investments of all types for its own account; in Fund of Brazil-which invest in the securities of a FY89, it approved $1,291 million. The disbursed single country. It helped to establish a number of

4 THE PAST TEN YEARS (US$ millions)

Fiscal Years 1980 1981 1982 1983 198.4 1985 1986 1987 1988 1989

OPERATIONS Investments Held Number of firms 288 314 333 341 3Z9 366 377 409 454 468 Loans 1,159 1,374 1,551 1,588 1,6z4 1,748 2,001 2,347 2,848 3,472 Equity 245 273 284 294 3z-6 368 386 409 526 573 Total 1,404 1,647 1,835 1,882 1,990 2,116 2,387 2,756 3,374 4,045 Disbursements IFC's own account 190 292 246 228 238 266 325 328 762 870 Participants 122 295 284 146 1Z.3 84 140 166 110 207 Total 312 587 530 374 381 350 465 493 872 1,077 Commitments IFC's own account 402 347 300 218 355 354 513 742 1,098 1,207 Participants 248 390 80 115 415 127 168 255 63 314 Total 650 737 380 333 770 481 681 997 1,161 1,521 Approvals Number of projects 55 56 65 58 (2 75 85 92 95 90 Gross investments 681 811 612 845 696 937 1,156 920 1,270 1,709 Total project costs 2,377 3,340 2,936 2,894 2,473 2,768 3,588 4,343 5,010 9,694

RESOURCES AND INCOME Capitalization Borrowings 438 509 531 536 582 825 1,223 1,581 2,047 2,255 Paid-in capital 307 392 497 544 5Z.4 546 602 722 850 948 Accumulated earnings 140 159 181 204 23,0 258 284 338 438 635 Earnings Net income 20.7 19.5 21.6 23.0 26.3 28.3 25.4 53.8 100.6 196.5

debt-equity conversion funds. The Emerging Mar- to develop bankable projects, while the newer AEF kets Data Base, sold to the public for the first time will provide finance to projects with total costs be- in FY88, has helped to stimulate investor interest in tween $250,000 and $5 million. A third new ven- developing-country stock markets by publishing in- ture, the African Management Services Company formation on these markets previously unavailable (AMSCo) (p. 46), launched in April 1989, will give in one volume. African companies access to expert international Another special initiative of the Program con- management. cemed assistance to sub-Saharan Africa, a high pri- Restructuring of corporations, as envisaged in the ority throughout the five years. The Corporation Five-Year Program, became an important IFC activ- sought new ways of meeting the special needs of Af- ity. IFC's advisory services to companies, previously rican countries, whose enterprises are often too provided as part of the Corporation's investment small to be the object of direct investment by IFC. packages, began to be offered on an independent Through two initiatives-the Africa Project Develop- fee-earning basis as well. IFC also advised government Facility (APDF) (p. 45), launched in coopera- merits of developing member countries on capital tion with UNDP, the African Development Bank, markets development, privatization of public sector and bilateral donors, and the Corporation's own Af- enterprises, and, through its Foreign Investment Ad- rica Enterprise Fund (AEF) (p. 44)-IFC provides viscry Service, mechanisms to attract foreign direct assistance to small and medium-size enterprises. For investment. Fee income from services increased three years, APDF has been helping entrepreneurs from $2.5 million in FY85 to $25.3 million in FY89.

5 Having set ambitious targets in the energy sector for the five-year period, the Corporation succeeded in establishing a credible presence in the industiy. In addition to supporting projects in oil and gas development, pipelines, and coal mining, IIFC participated in oil and gas exploration ventures, using its ability to invest equity to encourage private compa- | nies to expand their activities in developing countries. A total of 22 projects with costs of over $3 billion were approved. Loans and equity investments for IFC's own account came to $385 million. Dmuringthe Five-Year ProgramnIFC began to sup- plement its traditional borrowings from the World Bank by raising funds directly in the intermational capital markets. The Corporation made its debut in these markets through a private placement in FY85. Its market borrowings began at $129.4 million in FY85 and rose to $595 million in FY89-,over 70 percent of total bofrowings this year. The Corpora- tion has borrowed in a wide variety of capital markets and has used new borrowing techniques, moving from the use of small private placements to larger Euromarket club deals and finally to public issues supported by credit ratings. This broadened market access enables InFCin turn to offer its clients a wider range of financing instrumrents. $IFCalso began to offer variable-rate loans in FY85, having previously made loans for its own account on a fixed-rate basis only. In FY86, in line U with a more flexible interest rate policy, IrFC intro- duced a range of options allowing borrowers to hedge against interest and exchange rate fluctuations.

FISCAL YEAR 1989 IN REVIEW

The Five-Year Programnended in FY89 with another record year, in terms of the volume of new investments approved and IFC's own financial performnance.LFC approved 90 investmnentsduring the fiscal year with a total value of $1,709 million and overall project costs of $9,694 million. IIFC mobilized $8,403 million in funds from other investors and lenders for its projects in FY89: this means that for every dollar LIFCinvested or lent other sources provided $6.5. In FY88 the Corporation mobilized $3,971 million, or $3.8 for every dollar invested for its own account. Disbursements for IFC's own account increased by 14 percent, to $870 million, and the disbursed and outstanding portfolio reached $2,793 million. IIFC's net income doubled for the

6 third successive year, reaching a record high of $196.5 mnillion,due in large part to the extraordi- nary performance of the equity portfolio, which yielded exceptional capital gains of $118.6 million, comp.aredwith $32.9 million in FY88. The Corpora- tion collected dividends of $30.8 million in FY89, as against $15.5 million in FY88. r ^ _ -iAtnvother majors iilestone for arFCin FY89 was I j -~ the decision to apply for a rating for a public issue ~2 > ~ofthe Cofporation's debt securities and the confer- z ~~~~~~~~~~~~ralof a Aaa-rating by Moody's and a AAA-rating by Standard & Poor's. This achievement is recognition of IIFC's superior financial status. Access to the public securities markets will help to minimnize IFC's funding costs while broadening significantly A~ its investor base-advantages that are also expected to benefit iFC's clients. Moreover, the ratings will help I.FC's fund mobilization efforts by confirming _-~i },s taeparto commercial banking communitythat EpC suc- cessfully combines financial strength with its

broader developmental role. vices Group during the year strengthened the 13 h lCorporation'scapacity to provide advisory services in two important areas: the restructuring of poten- tially viable enterprises needing assistance in coping withi a difficult economic environment; and the privatization of public sector enterprises, as developing member countries seek to increase the role of - \ for~~~~~~~~~~Te structuingsheurties Copranateionsance placin D: _ the private sector in their economies. ALspart of a continuing effort to assist corporation s in developing countries to raise capital on international markets, a new hintemnationalSecurities Group was established within the Capital Markets Department. This Group will be responsible, in collaboration with the regional investment departments, for structuring securities transactions and placing wit, dealers, brokers, and investors shares of enterprises in IFC's developing member countries. IFC has already reached agreements with the authorities inJ.apan and the United Kingdom permnittingit to place securities in those financial markets.

IFC'has investedin a numberof agribusinessprojects in Africa *.7' " ' wS - ; * in tecent years, such as the Gwembe ValleyDevelopment ComnpanyLimited, which is developing a 2,100-hectare irrigatedfarm to produce cottonfor export and wheatfor domesticsale.

7 Technical assistance activities aimed at helping private enterprises in developing countries stay com- An EnvironmentalCase Study petitive and profitable were expanded. Trust funds In FY89, IFC approvedan oil developmentproject in totaling $4 million were set up in collaboration with Gabon that could be expected to have a significant five bilateral donor agencies in IFC 's developed impacton the environment.IFC worked closely with the member countries to finance technical assistance pro- Governmentof Gabon and the project sponsors,Shell jects. IFC also established a new Technology Ser- Gabon,Elf Gabon,and Socite NationaleElf Aquitaine, vice to help enterprises acquire appropriate to help the projectmeet financial and operationaltargets technologies, from developed as well as from other whilerespecting environmental concerns. developing countries. The developmentof the Rabi-Koungaoil field will Sub-Saharan Africa continued to be one of the necessitatethe drillingof over 80 wellsand the construc- Corporation's priorities: AMSCo and AEF, dis- tion of four gathering stations, a central processing cussed aoeweebhlucestation,a 130-kilometerpipeline to Shell Gabon's cussedabve, whereb ed in FY89. AMSCo Gamba terminal,and a 270-kilometerpipeline to Elf will manadresnth aned oF Africlanlowenther oriporbet- Gabon's Cap Lopez Terminal in thenorth of the country, ter management, and AEF will allow the Corpora- as well as the expansionof both terminals.Additional tion to increase its financial assistance to small and infrastructurerequired by the project includes access medium-size African enterprises. In light of the roads;storage yards; living quarters; air, road, and water great demand for the services of APDF, which transport facilities; and telecommunicationssystems. began operations in July 1986, an extension of its TheRabi-Kounga field is locatedin an area ofrainforest activity in a second phase is now being considered. and swampthat is the habitatof severalthreatened plant During the fiscal year, the Corporation approved speciesand over40 mammalspecies considered endan- its first investment in Poland, which became a mem- gered. Part of the areais alreadyprotected under Gabo- ber in FY88. A new IFC office was opened in July nese law. 1988 in Casablanca, Morocco, to serve the Maghreb The project participants were concerned not only countries; the Caribbean Project Development Facil- aboutthe disruptiveeffects of construction,but also, in ity opened an office in Barbados to make its ser- the longer term, about the potential consequencesof operationalaccidents and the environmentalimpact of vices more accessible to entrepreneurs in the victesmoeCacsble increased settlement, farming, and hunting in the area E"astern Caribbean. by workers.The sponsorsconsulted IFC, the World IFC's projects must satisfy stringent environmen- Bank, the Governmentof Gabon,the WorldWildlife tal standards, and an environmental impact assess- Fund, and the InternationalUnion for the Conservation ment is frequently an integral part of the project of Nature and Natural Resourceswith a view to devel- appraisal process. In FY89, the Corporation ap- opingan environmentalmanagement plan. IFC consul- pointed an environmental adviser to ensure that pro- tants reviewedShell Gabon's environmentalimpact as- jects conform with local environmental sessment,which included a detailed ecologicalstudy requirements, as well as with the World Bank's done by the Universityof Wageningenin the Nether- guidelines and policies on such matters as air emis- lands, and made 83 recommendations-all of them ac- sions, wastewaters, solid wastes, hazardous chemi- cepted by Shell Gabon-about ways to reduce the cals, wildlands, resettlement, and worker health and project's environmentalimpact. One recommendation safety. IFC provides advice to project sponsors to as- called for the developmentof a joint plan with the sist them in meeting World Bank guidelines in a Governmentto ensureprotection of the areaas a national cost-efficient manner and requires them to provide park. Shell Gabon prepared oil spill contingencyand ceportst-efentironmann tan perenuiresthem tohprvelwaste managementplans and appointeda full-timeen- reports on environmental performance over the long v.omna spcals tooeseoeatosa.ai term. It is now IFC policy not to support projects vironenta_speialis_to_verse_opeatios _atRabi that are unable to comply with the Bank's environmental guidelines.

8 LOOKING AHEAD privaltizationof public sector enterprises; improvement of the environment for private sector develop- For FY90 and beyond the Corporation's Board ment and private investment; and research and policy studies laying the groundwork for future oper- has adopted a rollmngthree-year planning process, to:.W ilpa nipratrl nalo with annual updating of program and financial objec- these areas. tives for the succeeding three years. This approach these areas. is intended to allow IFC to respond more effectively A principal area of collaboration between the texeeCorporation's World Bank and IFC will be in strengthening the fi- to external changes, and to enable the nacorpecosonrevlpigiemeocunris shareholders-its member countries-to provide nancial sectors in developing member counhies. guidance more regularly to IFC as it carries out its IFC will continue to assist governments in formulat- developmental mission. ing policies for the development of capital markets, T'he Board has agreed that, in the coming years, identifying ways to fill institutional gaps, and re- IFC will continue to focus on its three complemen- viewing regulatory issues. In its support of financial tary, and often overlapping, roles. The largest is its intermediaries in developing countries, the World traditional investment role, involving the commit- Bank Group will seek to ensure that its activities ment of IFC's own capital and borrowed resources. are consistent with the strategy of encouraging A particular effort will be made to increase equity grealterreliance on the market and that such institu- investments. The exact nature of the Corporation's tions are able to withstand the test of the market. investment role will vary from one region to an- Cooperation between the Bank and IFC will also other. In some regions, such as sub-Saharan Africa, be eKpanded in the areas of privatization and restruc- particular attention will be devoted to helping small turing, with the Bank focusing on government pol- and medium-size enterprises, which are often dy- icy issues and operational assistance in privatization namic and innovative andemake up a significant por- transactions. The Bank will help governments to es- tion of the productive economy. IFC's mobilization tablish an appropriate legal and contractual frame- role-encouraging other investors and lenders to pro- workc,identify infrastructure and social services vide funds for viable projects and stimulating capital suitable for private involvement, and analyze the fi- flows through the capital markets-has already be- nancial and economic viability of proposals. IFC come, and will remain, central to IFC's activities. In will provide direct financing and advisory services, its advisory role, IFC expects to provide more ser- attract other lenders and investors to projects, and ar- vices to a wide-ranging government and corporate range commercial financing packages. The clientele attracted by the Corporation's financial and Corporation's new Corporate Finance Services technical skills, as well as its multilateral status and Group, working with IFC's investment departments, objectivity. will serve as a focus of expertise in these areas. In future years the Board hopes that IFC and the Another important area of cooperation within the World Bank will achieve closer and more effective World Bank Group will be in the encouragement of cooperation. During FY89 the report of the Private foreign investment to support development. In the Sector Development Review Group, a body ap- course of FY89, IFC's Foreign Investment Advisory pointed by the President and consisting of staff Service (FIAS) became a joint IFC/MIGA activity. members of the World Bank, IFC, and MIGA, and FIAS's Manager is responsible to the management a number of distinguished outsiders, was completed. of both institutions (p. 48). It recommended increased assistance to the private In addition to operational collaboration, the World sector, with the Bank helping governments to create Bank and IFC will jointly undertake research and an "enabling environment" through policy adjust- policy studies to develop country strategies for fu- ment and infrastructure support, and IFC taking the ture activities in support of the private sector. lead on direct financing of private sector projects Increased collaboration between the members of and institutions. Following this report, a Private Sec- the World Bank Group will complement a great tor Development Action Program was prepared. deal of day-to-day cooperation which already exists The Action Program identified four areas in which between IFC and the World Bank and which will collaboration within the World Bank Group (the gradually be developed between IFC and MIGA as World Bank, IFC, and MIGA) will be emphasized: MIGA's operations grow. It is expected that there financial sector development; restructuring and will be many cases in which investors participating

9 IFC's Impacton Development An important benefit of the Corporation's activities is Development means not only growth of output and the additional financing provided by investors and lend- income, but also change: improved technologies, better ers attracted to projects by IFC's direct involvement. management, and new financing techniques. IFC's sup- Over the past five fiscal years, IFC has succeeded in port of sound private sector initiatives is a key part of mobilizing close to $21 billion in additional financing the process of change and, through its selective, hands- for the $4.4 billion lent and invested for its own account. on approach, the Corporation has shown that business In the capital markets area, privately and publicly placed success and economic development can go hand in hand, funds developed by IFC have raised over $500 million A recent ex-post analysis of 110 IFC projects com- in new foreign money for investment in developing- pleted over an extended period of time has found that country stock markets and led to the creation of over 20 they were, in the main, profitable for the investors as similar funds sponsored by other institutions, which well as beneficial to the economies of the host countries. have raised over $1.3 billion. In addition, IFC's assis- The projects generated real average economic returns (a tance to financial institutions that go on to serve other measure of impact on national income) of 10 to 11 per- productive private sector businesses is of clear benefit cent and average financial returns of 7 to 11 percent. to the host economies. These returns are well in excess of the real cost of funds Quantitative measures tell only part of the develop- employed in these projects (averaging around 5 percent ment story, however. In almost every project reviewed it for U.S. dollar funds in the 1980s), an encouraging result was found that unquantifiable benefits had also oc- given the difficult economic environment prevailing in curred, through the help given to clients in designing many developing countries during this decade. The projects, choosing technologies, analyzing markets, earnings performance of IFC's investments reveals that dealing with environmental problems, keeping costs profitability does not have to be sacrificed in pursuit of down, and overcoming a variety of problems. Signifi- development objectives. cant external benefits have also accrued-for example, The overall sound performance of IFC's projects has through the demonstration effect of successful EFCpro- not come about by chance. The Corporation invests only jects, leading other local businesses to make similar in projects that offer a satisfactory ex-ante economic rate investments.IFC's corporate restructuring projects have of return. IFC's careful screening and appraisal process enabled over-indebted but fundamentally sound busi- not only weeds out inefficient and uneconomic projects, nesses to return to profitability, while minimizing clo- but also helps to redesign and restructure inadequately sures and work-force reductions. prepared project proposals. IFC's specialized engineer- IFC's non-project activities, such as the provision of ing, technical, and financial skills are applied on a technical assistance and advice, have also contributed to case-by-case basis; it is this feature, plus the fact that development. The oldest of these activities is technical IFC is able to take a longer view, that distinguish IFC assistance on capital markets and financial sector devel- from purely commercial financial institutions. opment, which benefits the entire private sector of an It is of some interest that, in the sample which was economy. Since 1971, the Corporation's Capital Mar- analyzed, the financial returns were mostly similar to kets Department has studied, and provided advice on, the economic returns. In fact, economic returns were, on financial systems in 28 countries, securities markets in average, slightly higher than financial returns, belying 43 countries, regulatory systems in 28 countries, ac- the view which is sometimes held that IFC client com- counting systems in nine countries, tax policies in 22 panies benefit substantially from protection and subsi- countries, and ways to increase access to international

dies. Market distortions are certainly present, but the capital markets in 14 countries. - evidence suggests that their net effect has been more to Other IFC initiatives designed to promote growth penalize than to enhance the profits of the IFC projects through the private sector include the Foreign Invest- under review. Burdens such as taxes, tariffs on inputs, ment Advisory Service (provided jointly with the Mul- price controls on outputs, and overvaluedexchange rates tilateral Investment Guarantee Agency), the Africa and combine to outweigh any financial assistance the pro- Caribbean Project Development Facilities, the Africa jects may receive through subsidies or protection from Enterprise Fund, the African Management Services imports. Company, and the Technology Service.

in projects financed and promoted by IFC will also the two institutions will be maintained for this wish to avail themselves of the insurance facilities purpose. offered by MIGA, and contact between the staffs of

10 INVESTMENT CLIMATE

BusinessClimate and Prospects

1988 was the sixth year of uninterrupted expansion in the industrialized countries, with strong economic growth, averaging 4.2 percent. Growth was led by investment demand-a healthy sign-and was widespread across countries. As 1992 ap- proaches, concern over "eurosclerosis" has given way to a new impetus in the European Community. Growth of demand in the United States (the largest importer of manufactured goods from the developing countries) slowed slightly in late 1988, easing fears of greater inflationary pressures. IFC providedadvice on, and arrangedfinancing for, an Trade performancewas very strong during 1988, expansionprogram undertakenby the PhilippineLong Distance offering exceptionallygood opportunitiesto busi- TelephoneCompany. nesses in developing countries. The volume of world trade increased by 8.5 percent. Exports by develop- Businesses in other oil-producing countries gener- ing countries grew by 10 percent; exporters of manu- ally suffered. More recently, the strengthening of factured goods did particularly well, building on the cornmodity prices has abated somewhat, perhaps expansion of the four preceding years and increas- reflecting higher interest rates and slower growth in ing their sales volume by 14.5 percent. This perfor- the United States. mance is remarkable considering the large number As for capital flows, net lending to the develop- of non-tariff barriers in most countries. The most dy- ing countries by commercial banks continued to ben- namic developing country exporters continued to efii: only a few countries, mainly in Asia, while specialize in labor-intensive products. Export busi- elsewhere exposure was reduced. In Latin America, nesses in the Latin American high-debt countries . c . havebeenincrasinlysarin in arke groth.even creditworthy countries like Chile and Colombia haveeenncreainglsharngimarket grow. had difficulty raising fresh funds from commercial Furthermore, developing country exports of services banks. Nor did official lending to the middle- are now growing at the same pace as exports of i g goods-aotherecouragig develpment,income countries increase, owing largely to unset- Moodst-primar ncommodingpieselopendedtheir lontled conditions in some major high-debt countries. Most primary commodity prices ended their long Aiecuaigdvlpet oee,wsafr slump in 1988. Producers of nonfuel commodities An encouraging development, however, was a fur- benefited from a 20 percent dollar value price in- ther increase in foreign direct investment from crease, reflecting high capacity utilization in the $13 billion in 1987 to at least $17 billion, and quite manufacturing industry as well as the effects of the probably more, in 1988. The increase of net invest- U.S. drought on agricultural prices. Metal prices ment flows into Latin America largely reflects debt- rose particularly sharply. Not all producers shared in equity conversion schemes, some of which have the price improvement, however; coffee and cocoa recently been restricted, while increases in Asia re- prices remained low, as did oil prices. Although indi- flect a combination of receptivity on the part of vidual countries' experience varied, as a group non- most governments and continued striving among oil developing country commodity exporters enjoyed multinational corporations to lower production costs. an 8 percent improvement in their terms of trade in On the other hand, foreign companies are not in- 1988. Export prices of manufactured goods also im- creasing their investments in sub-Saharan Africa. proved slightly; this helped businesses in oil- Overall net capital flows to the developing coun- producing countries such as Indonesia and Mexico tries remain low in relation to past levels and pres- where exports are becoming more diversified. Ient needs. Their composition, which remains

11 primarily official rather than private-the share of number of countries-for example, Bolivia, Costa official capital in total flows increased again in Rica, Ecuador, Kenya, Mexico, the Philippines, and 1988-is not the most appropriate at a time when Thailand. many governments are encouraging more private sector activity. Some countries have recently demonstrated, however, that improved economic Business Finance in Developing Countries management and liberalization of their markets, including capital markets, can attract more private cap- Even before the debt crisis, developing countries ital flows. lacked the financial depth of the industrialized econ- On the whole, 1988 was a better year for many omies. Since the debt crisis erupted credit has be- of the developing countries, although not for all. come even scarcer. L come even scarcer. Largely, this iS a result of Their combined GDP grew by 5.1 percent (up from foreign conmercial bans pulling back from new 4.5 percent growth in 1987). The newly industriallending. The vacuum this has created calls for gov- ized economies' GDP grew by 8.3 percent, India's ernments to focus on increasing domestic resource by around 9 percent, and China's by over 11 per- mobilization and improving the system to allow mar- cent. These strong performances follow several ket forces to allocate resources to where they will years of economic liberalization, high investment, be most productive. This need also exists in coun- and policies that are more outward-oriented. How- tries that are not suffering from excessive debt, a ever, progress in the majority of middle-income number of which have been successful in providing high-debt countries continued to be thwarted by the more financing to private businesses. The debt crisis drain of financial resources for purposes of debt ser- itself has made it more difficult in some countries vice. For many of these countries, financing the to mobilize savings for businesses; as noted, govern- government's debt service requires a massive trans- ments have had to extract more resources out of the fer of resources out of the private sector, which dis- private sector to service the public debt. This has courages private investment, undermines growth, often led to a combination of high (and variable) in- and may fuel inflation, increasing business uncer- flation and high real interest rates; as a result, do- tainty. Among these countries, only Chile is experi- mestic long-term credit is virtually unobtainable in encing relative price stability, sustained growth, and some countries. rising investment levels. Average GDP growth in the The shortage and high cost of credit are more of high-debt countries (1.8 percent in 1988) failed to a problem in most developing countries than they keep up with population growth. would be in industrialized countries because busi- In sub-Saharan Africa the overall statistics tend to ness needs are different. In the developing countries, be dominated by Nigeria, where real GDP grew by businesses rely less on reinvested earnings and more 4.4 percent in 1988, following a drop of 4.2 percent on external sources of finance. In India and Korea, the previous year. In most of the rest of sub-Saharan for example, internal company financing has in re- Africa growth improved slightly but remained slug- cent years accounted for about one-third of total cor- gish (1.3 percent on average last year compared porate fmancing needs, while in the major OECD with 0.8 percent in 1987), well below the growth in countries this ratio is between 60 and 70 percent. In population. In per capita terms, the oil-exporting some countries-for example, Korea-greater reli- countries suffered another year of decline. ance on non-firm savings reflects the rapid growth Investment performance during the 1980s also re- of businesses, which requires more investment than flects considerable differences between groups of de- can be financed out of retained earnings. In others it veloping countries. In East Asia investment growth reflects poor profitability or government policies was very strong, averaging over 12 percent per year that provide incentives for payment of dividends as and outstripping the 8 percent annual growth in compared to retention of earnings. Loans are the GDP. In all other regions, the share of investment in most important source of external financing and, for GDP has declined, especially in sub-Saharan Africa the reasons indicated, are more essential to corpora- and in the highly indebted middle-income countries. tions in developing countries. On average, private investment accounts for about A second reason why these businesses are more one-half of total investment. However, in recent dependent on the availability of credit at reasonable years that share has increased significantly in a terms arises from the way they use funds. Typically,

12 capital requirements for purposes other than fixed trying to deal with the problem by assuming the ex- assets are greater in the developing countries. Busi- change risk themselves, sometimes charging a mod- nesses need higher inventory levels than in the in- est premium to the private borrower. Frequently, dustrialized countries and receive payment more however, this foreign exchange cover is not avail- slowly; they may also need to fmance standby elec- able for all borrowing but is limited to funds on- trical generating capacity and other infrastructure lent by government-owned development institutions, not provided in reliable fashion outside the firm. and credit is provided below market terms. This The squeeze on government finance in much of the runs counter to greater reliance on market disci- developing world has exacerbated the need for fimns pline. There is no easy solution to these problems. to command their own ancillary infrastructure. As a Movement toward market-based interest rates with result, more financing is required per unit of produc- convertible currencies should be encouraged, but it tive capacity than in the industrialized countries. is anrealistic to expect such a development to take How are firms coping with their financing needs? place quickly in all developing countries. In countries where macroeconomic conditions are [n contrast, the rise in foreign direct investment reasonably favorable, businesses make ample use of strengthens market discipline. Foreign direct invest- bank credits. In addition, there is increasing reliance ment has an advantage over borrowed funds in that on domestic and international capital markets in a financial return is tied to the performance of assets, growing number of developing countries. In Mexico wLile loans must be serviced regardless. Further- private companies raised about $2.4 billion in the more, unlike loans, foreign direct investment brings domestic securities market in 1988. Private busi- with it additional benefits (management skills, mar- nesses in India now raise about 40 percent of their keli access, technology, exports). So, for example, outside finance from the domestic securities mar- partly or wholly foreign-owned corporations were re- kets, double the figure of five years ago. Bonds are sponsible for 85 percent of the increase in Mexico's an important source of corporate finance in India manufactured exports during the 1980s. Perhaps and Korea, as is the flow of new equity, which ac- most important, providers of foreign direct invest- counts for an average of 10 percent and 7 percent re- ment have a strong incentive to use resources effec- spectively of corporate funding in developing and tively. industrialized countries. Financing problems are most acute in countries characterized by high inflation and high interest Conclusion and Outlook rates where corporations are minimizing debt and concentrating on improving their cash management, On average, the prospect for an improving busi- selling for cash as much as possible, reducing ness climate in the developing countries is still stocks to a bare minimum, and selling off assets. fairly favorable. Two important reasons are the Cash-rich companies are acting like banks and are likely world economic expansion and the continuing lending to other companies, or, more typically, to encouragement of private sector activities by the ma- the public sector. While this benefits some corpora- joiity of developing country governments. Actual tions, it requires considerable attention to financial prospects will continue to differ widely-they will matters. The resulting diversion of managerial en- not be the same, for example, for firms operating in ergy from production to finance is detrimental to the middle-income high-debt countries, where the economic growth. pattern of low investment and low growth is not ex- In a number of developing countries exchange pected to end within the next year or so, as for rate instability continues to be a major source of firns in the fast-track countries where investment problems for corporations. Faced with the risk of and1growth are high. Business prospects will con- sudden depreciation, which would increase their tinue to be difficult in sub-Saharan Africa; they may debt burden in local currency, businesses are reluc- improve somewhat in the oil-exporting countries; tant to borrow foreign exchange, and this depresses and1they will remain good in most Asian countries. the overall investment level. The financial markets The need for financing external to firms is do not offer exchange risk cover for developing- greater in the developing countries where there is country currencies, especially for long maturities. rapid growth, margins are often squeezed by govern- This is a serious problem. Some governments are ment policies, and governments may encourage

13 payment of dividends rather than retained earnings. capital. The improvement of borrowing conditions in Furthermore, the difficult physical and institutional many cases will depend to a considerable extent on environment in which many finns operate requires further development of domestic capital markets, es- more expenditure per unit of investment than in the pecially since international commercial banking industrialized countries. In many countries financing flows to the developing countries continue to be problems are aggravated by unsettled macroeco- low. Businesses will benefit where financial and cap- nomic conditions leading to high inflation, high ital markets are actively encouraged to grow; this short-term interest rates, and a shortage of long- trend is well under way in an increasing number of term finance. The channeling of public aid flows to developing countries. private firms is not a good substitute for risk-based

14 E,500 CUMULATIVEINVESTMENT APPROVALSFY85-89 REPORT ON OPERATIONS (US$millions)

5,200 * Cumulative Yearly

INVESTMENT REVIEW 3,900 Approvals I During the fiscal year, 90 new projects were ap- 2.600 proved by IFC. These included investments in the amount of $1,291 million for IFC's own account, compared with $1,039 million in FY88; $398 million in loan financing arranged for participants in 1,300 IFC's loans, compared with $148 million in FY88; and $20 million in finance underwritten by IFC for __ -I subsequent placement with investors, compared with 1985 1986 1987 1988 1989 $81 million in FY88. Early in the year new streamlined procedures were adopted by the Board relating to the process- Loans were made at market rates with an average ing and approval of new projects. A new system of life of six to seven years, including grace periods of quarterly reports to the Board on the Corporation's about three years. The maturities of IFC's loans are programs, portfolio, and finances was also initiated. set to conform with the nature and needs of each These changes are designed to achieve greater effi- project; this year maturities ranged from five to four- ciency in the work of the staff and the Board. teen years. One of IFC's main developmental roles, the mobi- Of the total volume of loans approved for IFC's lization of financing from other investors and lend- account, over 65 percent was priced at variable inter- ers for its projects, has become more important in est rates, and 95 percent of this amount was in U.S. recent years. lFC estimates that the total capital dollars. The currency mix for loans approved this costs of the projects approved by its Board in FY89 yezr was: will be approximately $9,700 million. This means that for every dollar lent, invested, or guaranteed by US$ Millions Percentage of Total IFC for its own account in FY89, other investors or lenders (foreign and domestic) provided more than U.S. dollars 789 77 $6.5 in loans or equity participations. This increase Deujtsche mark 138 13.5 in the mobilization rate-in FY88 others invested or Swiss francs 89 9 lent four dollars for every dollar invested or lent by French francs 3 0.3 IFC-reflected some major corporate restructurings in Mexico and a number of sizeable mining and energy projects. Wlhere IFC Invested Of the total amount invested for IFC's own account and the account of others in FY89, loans ac- One of IFC's objectives is to achieve a broad geo- counted for $1,415 million, equity and quasi-equity graphical distribution of its investments. Projects ap- type instruments for $257 million, guarantees and proved during the fiscal year were located in 37 standbys for $17 million, and underwritings for countries; one was regional and one global in scope. $20 million. Quasi-equity instruments offered to FY88 approvals were located in 40 countries, while IFC's clients in FY89 included subordinated loans, one was regional and one was worldwide in scope. convertible debentures, preferred stock, income Of the total approvals, 38, accounting for notes, and loans with conversion features. Four $41 million, were located in low-income develop- loans, totaling $98 million, were for projects that in- ing countries with per capita incomes of $835 or volved corporate restructuring. less in 1988. These investments represented

15 42 percent of the number and 24 percent of the vol- involving capital markets, development finance com- ume of approvals. panies, and financial services had a prominent share The dollar value of approved investments (gross) of total investment volume, with 17 percent; in- increased in all regions. The largest increase- cluded in this category are export financings, 109 percent over FY88-occurred in Africa, fol- privatizations, corporate restructurings, and funding lowed by 36 percent in Latin America and the and advisory services to small and medium-size en- Caribbean, 26 percent in Europe and the Middle terprises. The timber, pulp, and paper sector repre- East, and 5 percent in Asia. The number of invest- sented 15 percent of total investment volume. ments declined slightly in Africa, Asia, and Europe General manufacturing, which includes automotive and the Middle East, but increased in Latin America as well as machinery and equipment projects, had a and the Caribbean. The Corporation made its first in- 14 percent share of total investment volume. Energy vestment in Poland during FY89. projects, including oil development and exploration ventures, accounted for 13 percent of approval volume, and the mining and metal refining sector, with Range of IFC's Investments two iron and steel projects, two gold mining projects, and one copper mining project, accounted for The graph below shows the sector breakdown of 12 percent. Tourism and non-financial services, in- IFC's investment approvals during FY89. Projects cluding hotels, container terminal services, and

FY89APPROVALS BY SECTOR Timber,pulp Miningand andpaper metals Cementand Textiles 5 7 constructionmaterials

manufacturingn Foodand NUMBER \ agribusiness Total 90 7

petrochemcals, and.fertilizers Tourismand 5 ~~~~~~~~~~~~~~~~~~~non-financial services _| l l ll l l l l | _ ~~13 Capitalmarkets, development finance, andfinancial services 25 Miningand metals Cementand Timber,pulp $200.91 constructionmaterials andpaper $80 $260.00 ~ nrgy

AMOUNT Textiles Foodand (US$millions) $58.21 agribusiness Total= $1,708.50 $46b32 ~~~~~~~~~~~~~~~~~Tourism and General non-financial manufacturing services $234.89 U$167.88

Chemicals,petrocheicals Capitalmarkets, development andfertilizers finance,and financial services $166.85 $286.19

16 FY88 and FY89 Projects by Region

FY88 FY89 No. Amount' No. Amount' (US$ millions) (US$ millions)

Africa 23 $ 135 19 $ 282 (of which sub-Sahara) (20) (1282 (18) (275) Asia 29 306 25 321 Europe & Middle East 16 206 15 259 Latin America& Caribbean 26 618 30 842 Worldwide2 1 5 1 5 Total 95 $1,270 90 $1,709

1. Dollar amount refers to total investment approved for IFC's account and for account of other participants. 2. Emerging Markets Investment Fund.

storage facilities for agricultural produce, repre- out 34 investments. The total value of IFC's commit- sented 10 percent of total investment volume; chemi- ted portfolio can be broken down as follows: cals, petrochemicals, and fertilizers accounted for another 10 percent. The cement industry accounted Amountin US$ Millions for 4 percent. Finally, the agribusiness and food pro- Loans for IFC's account 3,472 cessing sector represented 3 percent of IFC's ap- Equity for IFC's account 573 proval volume-FY89 approvals in agribusiness Total IFC portfolio 4,045 included cocoa, cotton, rubber, and palm oil pro- Tot:al disbursed 2,793 jects-and textiles accounted for another 3 percent. ToiEalundisbursed 1,252

New commitments for IFC's own account in FY89 totaled $1,207 million, up slightly from FY88. The total committed portfolio showed an in- THE PORTFOLIO crease of 20 percent over FY88. The net increase of $671 million consisted of increases of $625 million in committed loans and $46 million in committed Commitments equity. At the end of FY89, IFC's total committed portfo- A regional breakdown shows that about one-half At~~~~~ the of new commitments were in Latin America. About lio was composed of $4,045 million of loans and eq- one- commitments were in ma.uf uity investments in 468 companies. Of this total, one-half of FY89's commitments were in manufac- 462 companies are located in 79 countries, four are turing, followed by financial institutions and ser- regional (two are concerned with Africa, one with vices, and mining and metal refining. Asia, and one with Latin America), and two are worldwide in scope. At the end of FY88, the portfo- Disbursements lio, which contained 450 companies in 78 countries in addition to two regional and two worldwide com- Total disbursements of $870 million for IFC's panies, amounted to $3,374 million. During FY89 own account-$749 million for loans and $121 mil- IFC invested in 60 new companies and, through lion for equity and quasi-equity investments-repre- loan repayments, equity sales, or write-offs, closed serited a 14 percent increase over FY88

17 disbursements of $762 million. The disbursed loan Equity portfolio income, consisting of dividends portfolio grew by 24 percent to $2,320 million, and realized capital gains, rose dramatically to while the disbursed equity portfolio grew by 14 per- $149.4 million in FY89, an increase of 209 percent cent to $473 million. over last year. Taking advantage of buoyant market In addition to investments for its own account, conditions in some developing countries, IFC real- IFC administers loans for participating banks and ized substantial capital gains from the sale of equity other investors. During FY89, $314 million was holdings in companies in which it had completed its committed and $207 million disbursed for the ac- developmental role. Notwithstanding these sales, un- count of participants in IFC's loans. realized capital gains remain at high levels.

Portfolio Income Portfolio Management

Income from the loan portfolio rose to $244.4 mil- In FY89, the Corporation continued to improve lion in FY89, an increase of 13 percent over FY88. the management and supervision of its portfolio and Both interest and financial fee income were higher to restructure troubled investments. IFC benefited than in FY88, reflecting the increased size of the from the continuing growth of both the number and committed loan portfolio and an improved collection amount of its profitable equity investments. More- rate. over, it monitored its equity holdings more COMMITTEDPORTFOLIO BYSECTOR closey, selings threm (US$Millions) closely, selling them when its participation in Timber,pulp Miningand metals Cementand a project was no longer andpaper $498.12 constructionmaterials required. The Board of Directors streamlined the TEGy procedures for sale of eq- ta Fodlnduity investments to make ~~~ >~~~~~~agribusiness it easier for the Corpora- <•i $257.29 tion to turn over its portfolio, freeing up resources ~~ A~~~>~~~ Tourismand for new investments. ~~~~~~~non-financial Genera ~~~~~~~~~~~~~~~~~~~~services manufacturing $278.18

Caiaarkets, Chemicals,petrochemical developmentfinance, andfertilizers andfinancial services $555.12 $752.98

18 200 NETINCOME

FINANCIAL REVIEW US$Millions

150

Highlights

In FY89 IFC had another year of record profitabil- 100 ity; net income doubled for the third successive year. An important component of this year's results was the realizationof capital gains on the sale of mature equity investments. This was also the case in I the previous two fiscal years and reflects IFC's in- 50 creased focus on portfolio management during the FY85-89 Five-Year Program. The contribution of income from lendingoperations and dividendsto earn- i i * I I ings was also significant. As capital gains on the sale of equity investments inevitably vary from year 1985 1986 1987 1988 1989 to year, it is not to be expected that the recent net income figures will be repeated in the immediate future. However, healthy income levels reflecting the the previous record of $40.9 million in FY87. These steady growth of operational net income are ex- gains were realized from the sales of mature equity pected to continue. investments in 25 companies in 13 countries, cover- The volume of new investments approved for ing a variety of industrial sectors, including chemi- IFC's own account in FY89 increased by about cals and petrochemicals, cement, non-fuel minerals, 24 percent over FY88 and points to the continued and financial services. The sales are consistent with growth of IFC's portfolio. IFC has also begun to IFC's policy of revolving its equity portfolio in com- offer a range of fee-generating services, diversifying panies where its role has been completed, freeing its sources of income and responding to the varied up r esources for investment in new ventures. These and changing needs of its clients. investments were held by LFC for an average of 14 In FY89 IFC took a major new initiative in its years. funding from the international capital markets when Dividends of $30.8 million paid to IFC during it sought a rating for its debt securities. The two FY89 were also at a record level, surpassing the pre- leading rating agencies, Moody's and Standard & vioiis record in FY88 of $15.5 million. Dividends Poor's, gave their highest ratings (Aaa from were received from 107 companies in 38 countries. Moody's and AAA from Standard & Poor's) to Loan income increased as a result of the growth IFC's first public bond issue. These ratings will en- in tie disbursed loan portfolio, recoveries of past- hance the Corporation's future access to market due interest, and an improved collection rate of inter- funding. est payments. Growing steadily over the years, loan income has consistently made the single largest con- Net Income tribation to IFC's results. F'ees from investment and advisory services total- Net income was $196.5 million in FY89, a ing $25.3 million were received over the past year, 95 percent increase above FY88. This striking in- compared with $11.8 million in FY88. The level of crease can be attributed to the exceptional perfor- fees from advisory services increased to $15.5 mil- mance of the Corporation's equity portfolio, the lion in FY89, compared with $3.7 million in FY88, continuing strong perfonnance of its loan portfolio, refficting the expansion of IFC's advisory activities and an increase in fee income from IFC's advisory in connection with privatizations, financial restructur- activities. ings, and international capital markets transactions. During the fiscal year IFC realized $118.6 million lIcome on the liquid asset portfolio was in capital gains, the highest in its history, surpassing $1C1.5 million, compared with $67.7 million in

19 FY88. The gross return on the average portfolio Sourcesof Gross Income FY88 and FY89 was 7.85 percent. The liquid portfolio derives partly (US$millions) from the proceeds of borrowings pending disbursement on IFC's loans and partly from capital, accu- FY88 FY89 mulated earnings, and reserves. In addition to Interest and financialfees 217.0 244.4 ensuring the availability of resources for disburse- Dividendsand profit participations 15.5 30.8 ments, its highly liquid position enables IFCto time Realized gains on equity sales 32.9 118.6 its funding operations to take advantage of market Servicefees 11.8 25.3 opportunities as they arise. From depositsand securities 67.7 101.5 Gross income increased to $518.5 million in Other items 0.9 (2.2) FY89, up $172.9 million from last year, and admin- 345.6 518.5 istrative expenses increased by $5.2 million to $76.8 million. Net provision for losses in FY89 was $59.6 million, compared with $40.4 million in FY88. General improvements in the portfolio and recoveries of $22.2 million on previously reserved investments re- 900 sulted in the total Loss Reserves declining to 9.2 percent of the year-end disbursed and outstand- PAYMENTS ing portfolio of $2,792.7 million. This compares US$Millions with 9.8 percent in FY88. FY89 saw the introduction of the General Loss Reserve, which replaces the previous Unidentified Loss Reserve and supple- ments the Specific Loss Reserve. The general

RECEIPTS 300 FISCALYEAR 1989 US$Millions

400 RepaymentsAdministrative Financial Disbursements onBorrowings Expenses Charges

reserve is maintained at a level determined by IFC's management after taking into account the historical loss experience, the concentration of the portfolio, and other aspects of potential risk to that portion of the portfolio not covered by the Specific Loss Re- serve. These are risks which, by their nature, cannot readily be determined from a review of the portfolio As of the end of FY89, the Specific Repayments Borrowings Incomefrom investments. andSales Loan/Equity Loss Reserve amounted to $168 million and the General Loss Reserve to $90 million.

20 Capital and Accumulated Earnings The Corporation's five market borrowings in FY89 included the $200 million public issue (IFC's Paid-in capital as of June 30, 1989 came to largest borrowing to date) and the Daimyo issue of $948 million, and retained earnings, including the Y20 billion ($142 million equivalent); two Spanish fiscal year's net income, to $635 million. The peseta placements, for a total of Ptas 20 billion (the Corporation's net worth was $1,583 million, up equixalent of $174.6 million); and IFC's first Euro- from $1,288 million at the end of FY88. In addi- Swedish Kronor issue, for SKr 500 million tion, $164.9 nillion of IFC's subscribed capital has ($78.4 million equivalent). The proceeds of these market borrowings were swapped for variable rate not yet been paid in. dlasa trciesbLBRrtstrvd The debt-to-equity ratio, which measures outstand- dollars at attractive sub-LIBOR rates to provide funding for the Corporation's variable rate lending. cingtborrowingand gccmulartedesagaingstwasu1cod In the future it is intended that the Corporation capital and accumulated earnings, was 1.34:1, com- shudrlcefontemktsorisbrwd pared with 1.36:1 at the end of FY88. should rely chiefly on the markets for itS boffowed funds, with borrowings from the World Bank representing a small portion of the total. As IFC be- comes more active in the public markets, continued Funding Management close coordination between the Bank's and the Corporation's borrowing operations will be main- In FY89 IFC further expanded the size and scope tained. of its funding operations, tapping new markets and using new financing techniques. Of its overall funding needs of $845 million, up from $747 million in Financial Policies FY88, the Corporation borrowed approximately $250 million from the World Bank on attractive and During the year the following three policies were flexible terms under the recently revised Master app:rovedby IFC's Board of Directors: Loan Agreement between the two institutions. These * limiting IFC's leverage, as measured by the ratio borrowings were used mostly to fund fixed-rate as- of IFC's outstanding debt, including guarantees, sets denominated in dollars and other currencies. to the total of subscribed capital and accumu- Market borrowings totaling $595 million ac- lated earnings, to 2.5 to 1; counted for 70 percent of the funding program and, * limiting IFC's disbursed equity plus quasi-equity through the borrowing strategy and techniques used, investments (net of reserves) to 100 percent of contributed significantly to a further lowering of IFC's net worth, and limiting disbursed equity in- IFC's funding costs. IFC is also gaining access to a vestments (net of reserves) to 50 percent of IFC's broadening spectrum of international capital markets net worth; and on the most favorable terms. This has involved seek- e maintaining at all times a level of liquidity, in- ing ratings of the Corporation's debt securities and cluding undrawn borrowing commitments from beginning to make public bond issues. The first the World Bank, sufficient to cover at least 65 issue, for $200 million and carrying triple-A ratings, percent of the next three years' estimated net was launched in June 1989 by an underwriting cash requirements. group led by Credit Suisse First Boston Limited, In addition to the liquidity policy, IFC has a IBJ International Limited, Deutsche Bank Capital match funding policy that results in the Markets Limited and J.P. Morgan Securities Ltd. Ccrporation's having in liquidity, or in undisbursed IFC's second public issue took place in the Daimyo amounts from the World Bank, sufficient resources market in Japan. Although launched in July 1989, it to fund all approved but undisbursed investments. was part of the Corporation's FY89 funding pro- This match funding policy is the main factor behind gram. The lead underwriter was Nomura Securities IFC's liquidity levels, which at year end were equiv- Limited, and the chief commissioned company was alent to more than 80 percent of the next three Industrial Bank of Japan Limited. years' estimated net cash requirements.

21 Underwriters of IFC Market Borrowings - FY89 Program

Lead and Co-Lead Managers

Citibank Espana, S.A. J.P. Morgan Espania S.A. Credit Suisse First Boston Ltd. J.P. Morgan Securities Ltd. Deutsche Bank Aktiengesellschaft Nomura International Ltd. Deutsche Bank Capital Markets Ltd. PKbanken IBJ International Ltd. The Nomura Securities Co. Ltd.

Co-Managers

Banco Bilbao Vizcaya Merrill Lynch Japan Inc. Banco de Credito Industrial Morgan Stanley International Ltd. Banco Espaiiol de Credito (Banesto) New Japan Securities Co., Ltd. Banco Exterior de Espafia Nomura International Ltd. Banco Hispano Americano, S.A. Okasan Securities Co., Ltd. Banco Santander de Negocios Paribas Capital Markets Group Bankers Trust Servicios Financieros, S.A. Salomon Brothers Asia Ltd. Banque Bruxelles Lambert S.A. Salomon Brothers International Ltd. Banque Indosuez Sanyo Securities Co., Ltd. B.N.P. Espania, S.A. (Banque Nationale de Shearson Lehman Hutton International Paris Group) Swedbank Cosmo Securities Co., Ltd. Swiss Bank Corporation Investment Banking Credit Suisse First Boston Ltd. S.G. Warburg Securities Credit Suisse First Boston (Japan) Ltd. S.G. Warburg Securities (Japan) Inc. Daiwa Securities Co., Ltd. Taiheiyo Securities Co., Ltd. Dai-ichi Securities Co., Ltd. The Nikko Securities Co., Ltd. Den Danske Bank The Nippon Kangyo Kakumaru Securities Dresdner Bank Co., Ltd. Goldman Sachs International Ltd. Tokyo Securities Co., Ltd. Goldman Sachs (Japan) Corp. Tokyo Servicios Financieros, S.A. J.P. Morgan Espania S.A. (Bank of Tokyo Group) Kansallis Banking Group Universal Securities Co., Ltd. Kidder, Peabody International Ltd. Wako Securities Co., Ltd. Kokusai Securities Co., Ltd. Yamaichi Securities Co., Ltd. Marusan Securities Co., Ltd. Yamatane Securities Co., Ltd.

22 REGIONAL REPORTS r

AFRICA

Investment Overview

The investment climate in Africa continues to be difficult. Many countries are still facing major eco- -a. nomic imbalances, which they are trying to reduce through structural adjustment programs incorporat- ing significant policy reforms. A few countries have overcome the initial problems inherent in such ad- . justments and have begun to demonstrate the capacity for sustainable economic growth. In many others the adjustment process is still in the early stages,, the prvadstmeinvstmces iassotil inethebeal stares, In FY89 IFC approvedinvestments in a numberof fishing projects in Africa, includinga loan and equity packageto help spond. In a number of countries, reform programs finance the modernizationprogram of Pcheries de Nossi-B in are either weak or non-existent. Madagascar. Perceptions of the private sector's role in development are changing in much of Africa, however. In a growing number of countries-including those proved significantly. In these countries, moderate growhingstil ereofcountries-including theopr seo- rates of inflation and relatively stable exchange rates which still rely on the state as the primary eco-haesiutdprveinsmntnsaladme nomic agent-the private sector is beginning to be have stimulated private investment in small and me- seen as a force capable of spurring economic diurn-size projects. Some of these have been di- growth and increasing economic efficiency. This rectmd at exports, for both the European and African change of attitude has resulted in the liberalization markcets. of economic policies, the reduction of controls on In countries where the needed adjustment effort new private investment,new pivat andadinvstmet, theth priatiztionofprivatization of aecloicndtnsaegerlyeeirtn,i-ahas yet to be initiated, investment opportunities and number of public enterprises. economic conditions are generally deteriorating, in- A number of African countries have embarked on flation is high, and there is a severe shortage of for- economic and institutional reforms. These reform eign exchange. Economic difficulties related to programs often make the business environment exchlangerate imbalances are surfacing in some more difficult in the short to medium term by intro- countries. ducing the need to adapt to more competitive eco- C'hanges in commodity prices have also had an nomic circumstances. Furthermore, measures aimed important effect on many African economies. Prices at reducing deficits often result in restrained overall of some major minerals and metal products-for ex- demand and depressed local markets. Many busi- ample, copper and gold-have either increased or nesses find it difficult to adjust to trade reforms and are still attractive enough to stimulate private invest- industrial restructuring measures and to absorb in- ment. On the other hand, weak prices for important creased input and debt-service costs caused by local agricultural commodities like cocoa and coffee have currency devaluations. In this kind of environment, had an adverse impact on the economies of produc- investors adopt a wait-and-see attitude before making countries. ing new investments or expanding operations. In the long term, however, the success of such reforms should increase the scope for private sector activity. Regional Initiatives The investment climate in countries such as Botswana, Mauritius, and Swaziland, is favorable; Many African economies are small and offer few in others, such as Morocco and Tunisia, it has im- opportunities for large-scale IFC projects. IFC's

23 FY89 ProjectApprovals in Africa

Gross Project Company Country Activity Investment Cost (US$ millions)

Red Sea Oil Exploration Program Ethiopia Energy 7.80 31.00 Elf Gabon Gabon Oil development 10.00 352.00 Shell Gabon S.A. Gabon Oil development 160.00 395.00 Canadian Bogosu Resources Limited Ghana Mining 0.60 6.00 Canadian Bogosu Resources Limited Ghana Mining 48.00 86.00 Wahome Steel Ltd. Ghana Iron and steel 3.20 8.30 Panafrican Paper Mills (E.A.) Ltd. Kenya Pulp and paper 15.00 40.20 La Cotonniere d'Antsirabe (Cotona) S.A. Madagascar Textiles 1.50 6.50 Les Pecheries de Nossi-Be, S.A. Madagascar Shriinp fishing and processing 3.71 14.50 Compagnie Maritime Maroco-Norvegienne Morocco Shipping 6.30 12.40 (Comarit) Arewa Textiles, Ltd. Nigeria Textiles 6.00 12.00 Mimi Fisheries Nigeria Ltd. Nigeria Fisheries 4.80 15.90 Tiger Battery Company (Nigenia) Limited Nigeria Dry cell batteries 3.26 5.30 Africamer, S.A. Senegal Fisheries 3.00 16.10 Spintex Swaziland Ltd. Swaziland Textiles 3.62 22.20 Tanganyika Sisal Spinning Company Ltd. Tanzania Manufacturing 2.00 5.90 Zambia Hotel Properties Limited Zambia Tounsm 1.38 5.70 Sub-total 280.17 1,035.00 Capital markets approvals in Africa (see p. 38) 1.31 6.01 TOTAL 281.48 1,041.01

special initiatives in the region have been mainly FY89 (p. 45). APDF helps African entrepreneurs de- concerned with providing assistance to small and velop bankable projects and obtain financing. Since medium-size ventures from which a stronger private it began operations in July 1986, it has received sector could develop in the future. In FY89, IFC over 1,000 project proposals. In light of APDF's suc- launched the Africa Enterprise Fund (AEF), which cess, an extension of this service in a second phase can invest from $100,000 to $750,000 in small and is now being considered. medium-size African enterprises with total project costs of $250,000-$5 million (see p. 44). During the past year AEF conducted promotional missions to Cameroon, C6te d'Ivoire, Ghana, Kenya, Nigeria, Highlights of the Year's Activities Senegal, and Zaire to identify potential clients. Another IFC initiative, the African Management During fiscal year 1989, total financing of Services Company (AMSCo), was incorporated in $282 million was approved for 19 projects in Af- the Netherlands in FY89 (see p. 46). AMSCo, rica, including capital markets projects. Of this which will operate as a financially self-sustaining amount, loans accounted for $266 million and eq- entity, was established by a group of bilateral agen- uity investments for $16 million. In FY88, the Cor- cies and private companies. It will address the need poration approved a total of $135 million in loan for better management in Africa by seconding se- and equity financing for 23 projects in the region. nior executives to African enterprises for fixed At the close of FY89, IFC had committed invest- terms and providing management training to local ments of $624 million in 123 companies in 33 coun- staff. tries in Africa-$550 million in loans and The Africa Project Development Facility (APDF), $74 million in equity. This compares with $532 mil- a UNDP project of which IFC is the executing lion in loans and $72 million in equity in 127 com- agency, continued to expand its activities during panies at the end of FY88.

24 800 modernization of La Cotonniere d'Antsirabe in Mad- CUMULATIVEINVESTMENT g APPROVALSFY85-89 agascar. (US$millions) The Corporation approved a $15 million loan to 600 Panafrican Paper Mills (E.A.) Limited in Kenya. IFC played a key role in structuring, and raising finance for, an expansion project that will allow the 400 r F company to process waste paper and pulp to satisfy the rapidly growing demand for paper in Kenya. Too In Madagascar, the Corporation approved a loan of $3.56 mnillionand an equity investment of $.15 millicn for Pecheries de Nossi-B6. The company is undertaking a three-year investment program and 1985 1986 1987 1988 1989 wilL modernize its shore facilities, purchase three ~'-Cumulative -Yearly new trawlers, and rehabilitate two of its older trawlers. In Nigeria, IFC approved an equity investment of $[.2 million in, and a loan of $3.6 million to, FY89 was a difficult year: a number of projects Mirri Fisheries Nigeria Limited, which intends to appraised by the Corporation did not proceed be- purchase five shrimp trawlers, to increase the cause of withdrawal by a sponsor or the prospect of shrimp catch for export, and two fishing trawlers. The company's fish catch will be sold locally. IFC aninanialretun. iadeqate Te Coporaionalso approved a loan of $3.0 million to Africamer, a sought to meet these difficulties by concentrating on , promisingsectors-for example, natural resource- major fishing and fish processing company in Sene- prmsn setr-o xml, natura reoreal. The loan will help to finance the modernization related industries, such as mining, fishing, and agri- gan.*exansion oflAricaernl . .and-basedefaties business and food processing,and service industries, n xaso of. Aricmrsln-aeaiiis bucsinssiandgfood.proces , a e i e prinzipally to increase the value added to exports to such as shipping. ... Europe. In FY89, the Corporation approved two equity n E . e ainv vestments totaling $1.1 million and shareholder ad- seC with a $6.3smin ln torthe Coipag vances of $4.5 vancesofmillionmilion forfr $45 CanadianCandian BogosuogosusectDr Maotimwith MaooNrv.en a $6.3 million loan (CMRT.hcto the Compagnie Resources Limited (CBRL), a gold-mining venture is ownedby private Moroccanand Norwegian inter- in Ghana. IFC also arranged a $56 million financ- iests. COMARIT willMacqur a second ship, en- ing package for the production phase of the project. tablisg to offerit year-round ferryservice between The package includes a syndicated Eurocurrency abnMo:rocco Spain.and A Norwegian bank took a loan of $43 million, of which $14 million is for $2 million p pain.patioin ln loan.bC's IFC's own account, and a loan from a European bi- Finally,I Cplayed a majorin role structuring lateral institution of $13 million. Gold sales are ex- and arranging the financing of the Rabi-Kounga oil pected to reach 140,000 ounces per year in 1991 field project in Gabon, a joint venture between Shell and to generate significant foreign exchange earn- Gabon, Elf Gabon, Societe Nationale Elf Aquitaine, ings for Ghana. IFC made a previous equity invest- and the Government of Gabon, with an overall in- ment in CBRL in FY88. These equity investments vestment cost of $816 million. The Corporation pro- are the first major new foreign investments in vided a subordinated loan of $50.0 million to Shell Ghana's mining sector since the country embarked Gabon and a loan of $10.0 million to Elf Gabon on its Economic Recovery Program in 1983. This and arranged for a group of 19 commercial banks to project will be the first cooperative effort between participate in a syndicated loan of $110.00 million IFC and MIGA, as one of the sponsors has applied to Shell Gabon. Production at Rabi-Kounga, which for a MIGA guarantee for its investment. began during the first half of 1989, is expected to A project involving the rehabilitation of a plant in reach at least 120,000 bpd. The project, Gabon's Tanzania engaged in the production and spinning of largest oil field development, is expected to main- sisal was also approved, as were several textile pro- tain the country's oil exports at high levels and will jects-the expansion of Arewa Textiles in Nigeria; a make a substantial contribution to its foreign ex- new cotton-spinning project in Swaziland; and the change earnings.

25 ASIA

Investment Overview

Economic performance in Asia was particularly strong during the past year, and the investment climate in the region continued to improve. Several countries, including China, Korea, and Thailand, reg- istered double-digit growth; India's GDP enjoyed its biggest increase-at around 9 percent-of the decade. The factors contributing to South Asia's economic growth were a sharp rebound in the agricul- Millat Tractors Limited, Pakistan's largest producer of tractors, tural sector following the droughts and floods of receiveda$5millionloanfromIFClastyear. 1987; continued growth of both exports and domestic demand; rising domestic and foreign investment consequent to the relaxation of controls on private the region's more developed economies continued to investment; and, for most countries, strong industrial transfer labor-intensive operations to lower-cost loca- growth in both 1987 and 1988, belying the usual tions, primarily within the region. Market-oriented pattern of poor agricultural performance adversely economic policies, combined with a generally stable affecting aggregate demand and industrial perfor- political environment, stimulated both local and for- mance. Prudent economic management in the re- eign private investment. Deregulation opened up gion, reflected in comparatively low inflation rates new opportunities for private capital in the service and manageable levels of external debt, has also con- sector, for example, in infrastructure facilities. tributed to the improvement in the business climate. The Government of Indonesia continued its pro- In India, for example, the private sector continues gram of wide-ranging reforms aimed at improving to respond positively to the improving policy envi- the efficiency and profitability of private investment. ronment. New rupee issues of securities by private Measures were taken to reduce and simplify busi- firms increased significantly in FY89; corporate ness licensing procedures, allow shipping lines to de- profits were up; and the stock market reached a two- termine their own route structures and schedules, year high in November 1988. In Pakistan, dramatic and liberalize the local banking sector by allowing political and economic changes unsettled the invest- the entry of foreign banks into the Indonesian mar- ment climate. Improvement in the growth of the agri- ket. These measures have improved the climate for cultural sector did not carry over to industry and foreign investment substantially, as recent trends in services. Power shortages also affected both produc- capital inflows demonstrate. Export- and investment- tion and investment in manufacturing. At the same led growth continued in Thailand and, to some ex- time, the Government continued to work towards a tent, in the Philippines, with no significant change more open economy and, with the support of both in the generally favorable climate for private invest- the World Bank and the IMF, adopted a three-year ors. China's economic reform program was modi- adjustment program to correct growing macro-imbal- fied somewhat during the year to curb inflationary ances. pressures. Growth in East Asia was broad-based, with increases in exports, domestic consumption, and private investment. Under the combined pressure of appreciating currencies and higher real wage costs,

26 Regional Initiatives INVESTMENT APPROVALSFY8589 Asia's strong economic growth has created new (US$ millions) opportunities for IFC in infrastructure projects, fund- 1,200 ing of small and medium-size companies, and advisory services. Infrastructure financing involved both the use of the build-operate-transfer (BOT) concept 800 and the support of the few private companies already active in their respective fields. IFC approved finance for two BOT projects in the Philippines, 400 one in power generation and one in container port services. Other infrastructure projects approved during FY89 included power generation projects in 1985 1986 1987 1988 1989 India and a telecommunications project in the Philip- -Yeady pines. The Corporation also concentrated on expanding its direct equity investments. In India, for example, it took some large equity stakes, while continuing a program of making a limited number of small $50) million in loans and $148 million in equity in straight equity investments, particularly in projects 102 companies at the end of FY88. involving technology transfers. In countries with rap- In India, IFC approved a loan of $17.8 million to idly growing economies, such as Thailand, IFC Tata Iron and Steel Company Limited (TISCO) and began to use local commercial bank intermediaries, subscribed to a partly convertible public debenture enabling it to expand the volume of its smaller eq- issue of $21.3 million to help finance the moderniza- uity investments, which cannot be efficiently man- tion of TISCO's iron-making facilities by installing aged from a distance. a one-million-mtpy blast furnace. The furnace is A sharp expansion in the scope of the parl of a continuing modernization program initiated Corporation's advisory work in the region also oc- by TISCO in the late 1970s with the object of in- cuffed in the past year, as IFC provided advice on creasing productivity through improved material privatization and BOT possibilities in Indonesia, Ma- availability and replacement of obsolete equipment. laysia, Nepal, and Pakistan and undertook a project IFC' also approved an equity investment of feasibility study in Thailand. IFC also provided advi- $0.79 million in UCAL Fuel Systems Limited to sory services to a telecommunications company in help finance a plant for the manufacture of 110,000 the Philippines in structuring a financial package twin barrel down draught type carburetors and and mobilizing the foreign financing needed for the 100,000 fuel pumps annually. These fuel-efficient, company's $400 million expansion program. low-pollution carburetors will contribute to the modernization of India's automotive industry. The Corporation also approved loans totaling Highlights of the Year's Activities $55 million to two of India's four private power utilities. The first was a loan of $19.5 million to the During fiscal year 1989, total financing of Ahmedabad Electricity Company, LTD. (AEC) for $321 million was approved for 25 projects in Asia, the expansion of its generating capacity by the addi- including capital markets projects. Of this amount, tion of a new 100-MW gas-based combined-cycle loans accounted for $246 million and equity invest- unit. The new unit will improve the reliability and ments for $75 million. In FY88, IFC approved a efficiency of power supply to AEC's industrial and total of $306 million in financing for 29 projects in commercial users and relieve some of the supply Asia. pressures on the coal and railway industries. The At the close of FY89, the Corporation had com- second was a loan of $35.5 million to the Tata Elec- mitted investments of $729 million in 109 compa- tric Companies (TEC), which supply electricity to nies in 12 countries in Asia-$566 million in loans the city and suburbs of Bombay. The investment and $163 million in equity. This compares with will help to augment the capacity of TEC's transmis-

27 sion lines and substations, enabling them to distrib- In another infrastructure project, the Corporation ute efficiently power from a new unit added to is guaranteeing loans of $8.06 million and taking an TEC's own generating station. The improvements equity stake of $0.81 million in International Con- will also reduce transmission losses and enhance the tainer Terminal Services, Inc. (ICTSI) Philippines, a quality and reliability of supply in TEC's licensed private contractor. ICTSI will manage, operate, and area. develop the Manila International Container Termi- The Philippines' external debt situation severely nal. The project will help the country meet the antic- limited the Government's ability to invest in infra- ipated increase in container traffic as the economy structure projects. Through two BOT projects, IFC recovers. IFC provided a loan of $70 million to help offered the country a means of carrying out neces- finance the major expansion program of the Philip- sary investments quickly, efficiently, and profitably. pine Long Distance Telephone Company (PLDT). In one example, IFC is providing a $10 million loan This loan includes $40 million in participations by and taking an equity participation of $1 million in a commercial banks and represents IFC's first syndica- BOT power project to be built by Hopewell Hold- tion in the Philippines since 1983, when the ings, a Hong Kong-based holding company. The country's debt moratorium made mobilization of 200-MW stand-by power plant will provide power new foreign commercial financing extremely diffi- for peak-load periods using refurbished equipment. cult. Hopewell will also manage, operate, and maintain Thailand's vibrant economy is encouraging entre- the plant for a period of 12 years before transferring preneurs to set up small and medium-size compa- ownership to the National Power Corporation, a Phil- nies around Bangkok and in rural areas as part of ippine company, at no cost. the Government's regional development plan. IFC

FY89 ProjectApprovals in Asia

Gross Project Company Country Activity Investment Cost (US$ millions)

Shenzhen-Chronar Solar Energy Co., Ltd. China Solar energy devices 3.00 10.20 Ahmedabad Electricity Company Limited India Electricity generation and distribution 19.46 83.30 Deepak Fertilisers and Petrochemicals India Chemicals and petrochemicals 2.80 40.00 Corporation Limited Gujarat State Fertilisers Company Limited India Chemicals and petrochemicals 27.05 280.00 Tata Electric Companies India Electricity distribution 35.46 79.70 Tata Iron and Steel Company Limited India Steelmnaking 39.11 122.00 UCAL Fuel Systems Limited India Automotive components 0.79 7.50 P.T. Agro Muko Indonesia Agribusiness 12.70 54.00 P.T. Astra International Indonesia General manufacturing 37.50 117.00 P.T. Jakarta International Hotel (JIH) Indonesia Tourism 1.25 15.50 Gold Star Co. Ltd. Korea Electrical products 4.44 166.00 Tong Yang Nylon Company, Limited Korea Textiles 1.59 25.00 Pakistan Industrial Credit Pakistan Financial institutions 0.09 1.57 and Investment Corporation Limited' Thatta Oil Exploration Program Pakistan Energy 2.50 11.20 Hopewell Energy (Philippines) Ltd. Philippines Power 11.10 40.00 International Container Terminal Services, Inc. Philippines Transport 8.87 55.00 Philippine Long Distance Telephone Company (PLDT) Philippines Telecommunications 70.00 400.00 Siam Commercial Bank Equity Agency Line Thailand Commercial/merchant banking 15.00 30.00 Thai Farmers Bank Equity Agency Line Thailand Commercial/merchant banking 5.00 5.00 Sub-total 297.71 1,542.97 Capital markets approvals in Asia (see p. 38) 23.63 275.65 TOTAL 321.34 1,818.62 1. As a rights issue below $250,000, this project is not included in the total number of approvals.

28 established Equity Agency Lines (EALs) with two processing, and plantation industries. This is IFC's of Thailand's leading commercial banks. The EALs first investment in a wholly Indonesian-owned com- will complement each other: Thai Farmers Bank pany (the Government of Indonesia treats IFC as In- will focus on smaller enterprises, and Siam Com- donesian-owned); the investment will help the mercial Bank on medium-size enterprises. company with its plans to expand, particularly in IFC also approved a $2 million loan and $1 mil- the automotive field, and is viewed as a step to- lion in equity to Shenzhen-Chronar Solar Energy wards the sale of the company's shares to the public Co., Ltd. (SCSE) in China. The project reflects at a future date. IFC approved two other projects in IFC's efforts to promote the transfer of new technol- Indonesia: a $1.25 million rights subscription in the ogies to developing countries. The company will Jakarta International Hotel, which achieved success manufacture 300,000 square feet per year of photo- after a restructuring in which IFC played a major voltaic panels, which convert light into electricity. role; and a $12.7 million loan and equity package SCSE will use the proprietary amorphous silicon for l'.T. Agro Muko, which will establish an 8,000- process developed by Chronar Corporation, a rela- hectare mixed plantation that produces oil palm, tively small U.S. technology company. cocoa, and rubber. In addition to its investment activ- In Indonesia, a $37.5 million loan-equity package ities, IFC is assisting the Government of Indonesia was approved for P.T. Astra International, a major with the privatization of a number of hotels that are local conglomerate active in the automotive, wood- presently government-owned.

29 EUROPE AND THE MIDDLE EAST

Investment Overview

Hungary, Poland, and Yugoslavia are in the midst of a difficult transition period as they attempt to implement majoir reforms in the structure of their economies. The focus of these reforms is on liberalizing and deregulating trade, pricing, and foreign exchange allocations; improving the environment for a more market-oriented, competitive productive sector; and strengthening the role of the private sector. Tourismprojects in Turkey,like this 412-roomhotel resort, Meanwhile, the three countries face, in varying de- have attractedIFC investmentin recent years. grees, substantial macroeconomic problems related to high external debt, wage and price inflation, growing unemployment, and potential social instability, all of which work against the reform process. RegionalInitiatives Cyprus, Portugal, and Turkey all have vigorous, competent, and increasingly sophisticated private IFC's new initiatives in the region will concen- sectors with close ties to the European Community trate on expanding private sector participation in the (EC), of which Portugal is a full member. In recent manufacturing and service sectors. Activities will in- years, governments have been allowing the private elude supporting new local private sector and joint sector to expand into areas that were previously the venture projects, particularly in Eastern Europe; pro- domain of state enterprises and have also been plan- moting initiatives in areas previously reserved to the ning the privatization of some state-owned enter- public sector, such as power generation (through prises. Tourism, thanks to the region's natural build-operate-transfer arrangements) in Egypt, endowments, historical attractions, and proximity to Oman, and Turkey; and working with governments, the EC, is becoming a particularly dynamic area, at- entefprises, and prospective buyers to implement tracting a great deal of private sector activity. Portu- specific privatization schemes to restructure weak in- gal and Cyprus have enjoyed low inflation and dustries through asset redeployment and balance manageable levels of external debt for several years. sheet restructuring. Because many of these countries The situation in Turkey, however, still makes it diffi- face debt problems and foreign exchange shortages, cult to raise long-term external financing for the pri- which have an inhibiting effect on the investment vate sector. climnateand business operations, IFC will place par- The oil-exporting countries of the Middle East ticular emphasis on export-oriented, hard-currency- are still in the process of adjusting to the deteriora- earning projects in most of the region. In this tion in their terms of trade. Governments throughout category, tourism projects in Cyprus, Egypt, Turkey, the region are gradually introducing changes in their and Yugoslavia and metropolitan hotels in Eastern macroeconomic policies, however, and restructuring Europe are likely to play a significant role. their economies in ways designed to restore their In Eastern Europe, IFC can be expected to ex- growth momentum. One of the most important pand its lending activities as the reformnprocess changes is a shift towards greater reliance on the pri- bears fruit in fostering the growth of private sector vate sector as an engine of growth, as government and independent, market-based enterprises. IFC will resources become less available for new investmnent. use its expertise in structuring joint ventures that

30 900 In Turkey, the Corporation will continue support- CUMULATIVEINVESTMENT ing the efforts of private enterprises to introduce APPROVALSFY85-89 high technology, enhanced quality, and a broader (US$millions) > product mix to satisfy both the domestic and for-

600 0 eign markets. In Egypt, IFC will focus on foreign- exchange-generating projects in the hotel and oil sectors. In the smaller countries, such as Cyprus, Jordan, and the Yemen Arab Republic, IFC will con- 300 , | | F > tintue to complement the work done by local fman- cia] institutions, by supporting projects that require its assistance to proceed.

1985 1986 1987 1988 1989 ECumu1688e1 Highlightsof the Year's Activities _Yeady D)uring fiscal year 1989, total financing of $259 million was approved for 15 projects in Eu- rope and the Middle East, including capital markets prolects. Of this amount, loans accounted for $252 million and equity investments for $7 million. bring in specialized technology and modem manage- In FY88, IFC approved a total of $206 million in ment along with foreign investment. New laws that loan and equity financing for 16 projects in the re- foster the growth of the private sector will also gion. allow IFC to finance projects with cooperatives and lit the close of FY89, the Corporation had com- emerging private enterprises by providing package mitted investments of $756 million in 74 companies loans and agency lines to local financial institutions. in 12 countries in Europe and the Middle East-

FY89 Project Approvals in Europe and the Middle East

Gross Project Company Country Activity Investment Cost (US$ millions)

Pannonplast Hungary Plastic molds 3.37 11.84 Salgotarjan Glass Wool Ltd.' Hungary Insu]ation material 0.14 0.98 Tetrapak Hungary Packaging material 8.88 48.00 Centrala Spoldzielni Ogrodniczych i Poland Agribusiness/food processing 14.76 56.90 Pszczelarskich (Hortex Cooperative Enterprises) Isko Tekstil Sanayi ve Ticaret A.S. Turkey Textiles 32.27 81.00 Kirklareli Cam Sanayii A.S. Turkey Glass 19.45 55.00 Nasas-Aluminyum Sanayii ve Ticaret A.S.' Turkey Nonierrous metals 0.03 5.90 Sanko Santral Konfeksiyon Sanayii ve Ticaret A.S. Turkey Textiles 6.11 14.00 Santral Dikis Sanayii A.S. Turkey Textiles 7.12 15.10 Sariville Turistik Tesisler A.S. Turkey Tourism 0.28 1.50 Trakya Cam Sanayii A.S. Turkey Glass 55.50 141.70 Bilquis Poultry Co. Ltd. Yemen Arab Pouliry 3.00 8.70 Republic Sozd Iskra Yugoslavia Electrical equipment 9.06 23.00 Vojvodjanska Banka-Udrezena Banka Yugoslavia Banking 31.29 88.60 Sub-total 191.26 552.22 Capital markets approvals in Europe End the Middle East (see p. 38) 67.83 78.20 TOTAL 259.09 630.42 1. As a rights issue below $250,000, this project is not included in the total number of approvals.

31 $685 million in loans and $71 million in equity. IFC invested $3.4 million in a project in Hungary This compares with $608 million in loans and to make high-quality molds for the plastics industry. $74 million in equity in 68 companies at the end of The project, which will receive technical assistance FY88. from a leading mold-making company in the Fed- Eight of the fiscal year's approved projects were eral Republic of Germany, will use advanced com- in Turkey. The largest industrial project was a puter-aided design and manufacturing processes, $55.5 million loan and equity investment in Trakya including computer numerically controlled machine Cam Sanayii, the region's only float glass producer, tools. The joint venture is important for the efficient which helped finance a $142 million expansion of development of the Hungarian plastics processing in- its float glass operations. After completion of the dustry, which recently received a $60 million loan project, exports are expected to double, to 180,000 from the World Bank for modernization and expan- metric tons per year. The second largest was a sion. IFC's first approval in Poland was for a $32 million loan to Isko Tekstil Sanayi ve Ticaret $14.8 million loan to help finance a series of invest- A.S. for an $81 million investment in a new weav- ments in Centrala Spoldzielni Ogrodniczych i ing mill. Equipped with 400 looms and capable of Pszczelarskich (Hortex Cooperative Enterprises) that producing up lo 50 million meters per year of high- will facilitate the processing of high-quality fruits quality cotton and blended synthetic fabrics, the and vegetables for the Western European market. mill will diversify the company from spinning, Hortex, a marketing service cooperative owned by where Turkey is already a strong exporter, into some 50,000 small-scale private farmers, is engaged weaving, where Turkey has had difficulties in pro- principally in processing and distributing horticul- ducing enough high-quality fabrics to meet its EC tural products. quotas.

32 LATIN AMERICA AND THE CARIBBEAN

Investment Overview

Most countries in Latin America continued to face severe economic constraints during 1988 and are finding it difficult to achieve even moderate economic growth. In fact, regional growth performance was worse than in the previous year. GDP grew by only 0.7 percent in 1988, and per capita GDP de- . clined by 1.5 percent. Average inflation accelerated| sharply during 1988 from the already high level of 1987. On the positive side, the value of the region's A financial package of $40 million-including a loan for IFC's exports increased by 14.2 percent, and the total debt own account and syndicatedbankfinance arrangedby outstanding went down, for the first timnesince the IFC--has enabled Enka de Colombia, a leading manufacturer of synthetic yarns and fibers, to embark on a three-year beginning of the debt crisis, from $443 billion at expansionprogram. the end of 1987 to about $428 billion at the end of 1988. Despite generally stagnant economic conditions, public enterprises. These countries are also actively however, many private companies have performed seeking to attract foreign investment and technolo- relatively well, as is evident from the performance gies to develop natural resources. of IFC's Latin American portfolio. Structural adjust- The Chilean economy continued to grow at an ment efforts, even when only partially successful, im.ressive rate in 1988. Sti.ulative monetary poli- have resulted in increased opportunities for the pri- cies added to the economy's momentum. Real GDP vate sector, and many businesses are beginning to incmreasedby 7.4 percent, with exports and invest- take advantage of liberalized trade and exchange- ment the main areas of growth, while inflation re- rate policies, the privatization of public enterprises, maied at 12 percent. The exteral situation also and streamlined government procedures. Mecha- nisms such as debt-equity swaps have contributed in cinu bimovto some countries to an upswing of foreign direct in- img $2.3 billion. vestment, often for export-oriented projects. The Having embarked on a major effort to restructure scriyo eim n ogtr ne cei,ep and open Up its economy, Mexico scarcity of medium- and long-term new credit, espe- due quniaieipotrsrcinsadtrfs has sharply re- cially in foreign exchange, however, continues to be duced quantitative import restrictions and tariffs, a serious constraint, and this is to a large extent the which are now among the lowest in Latin America. basis of IFC's role in the region. Inflation dropped from 160 percent in 1987 to an an- The trade balances of both Argentina and Brazil nual rate of approximately 20 percent in early 1989. improved significantly in 1988, but inflation once Despite opportunities resulting from privatizations, again became a major threat in both countries, reach- private investment is still constrained by high real in- ing 390 percent in Argentina and 940 percent in Bra- terest rates and weak domestic demand. The busi- zil for the year. To increase foreign-exchange ness environment in Venezuela was affected by the earnings and cut fiscal deficits, Bolivia, Chile, Costa necessary adjustment measures-including a major Rica, and Uruguay have implemented structural ad- devaluation of the bolivar and an increase in domes- justment programs involving reforms in external- tic petroleum prices and interest rates-taken follow- trade policies, industrial incentive systems, and ing the election of a new government in February financial institutions, as well as the overhaul of 1989. The country's abundant mineral resources and

33 low-cost power continue to attract foreign investors where in Latin America to assist in complex to industries such as petrochemicals, aluminum, and privatizations and in the development of new owner- ferrous minerals. Colombia achieved GDP growth of ship and operating arrangements for joint public and approximately 3.7 percent in 1988, somewhat lower private projects. than the previous two years. Prospects for the econ- In Venezuela, IFC's initiatives continued to focus omy remain good, as the external accounts are on use of the country's rich natural resources to im- roughly in balance and foreign debt levels are man- prove the balance of payments and diversify the ageable. economy. The Corporation made its first investment in a downstream petrochemical project in the country in FY89 and is considering other possible petro- Regional Initiatives chemical investments. IFC also began to study a credit line to a Venezuelan commercial bank for In 1987 and 1988 IFC completed corporate re- onlending to exporting or import-substituting compa- structurings that reduced Mexico's external debt by nies. $1.5 billion. The benefits of this pioneering effort IFC's focus in Brazil and Latin America's South- are now being extended through local financial inter- ern Cone is on resource-based manufacturing with mediaries to small and medium-size companies. IFC strong export potential. In Chile, IFC concentrated is also pursuing opportunities in Mexico and else- its efforts on export-oriented investments in the min-

FY89 ProjectApprovals in Latin Americaand the Caribbean

Gross Project Company Country Activity Investment Cost (US$ millions)

Banco Frances del Rio de la Plata S.A. Argentina Commercial banking 15.00 30.00 Chihuidos Oil Exploration Program Argentina Energy 4.95 32.40 CompamiiaArgentina de Petroleos S.A. (Astra) Argentina Petroleum! petrochemicals 25.00 97.00 CompafimasAsociadas Petroleras S.A.(CAPSA) Argentina Petroleum 9.00 31.00 Terminal 6 S.A. Argentina Transport 3.00 10.90 Compafifa Minera del Sur S.A. (Comsur) Bolivia Non-ferrous mining 10.00 26.10 Adiboard S.A. Brazil Electronics 7.50 31.90 Aracruz Celulose S.A. Brazil Timber, pulp, and paper 20.00 1,024.00 Eluma S.A. Industria e Comercio Brazil Non-ferrous mining 15.00 79.80 Papel e Celulose Catarinense S.A. (PCC) Brazil Timber, pulp, and paper 15.00 173.00 Petroquimica do Nordeste S.A. (Copene) Brazil Chemicals and petrochemicals 65.00 810.80 Politeno Linear S.A. (Politeno) Brazil Petrochemicals 25.00 139.00 Celulosa Arauco y Constituci6n S.A. (Arauco) Chile Timber, pulp, and paper 110.00 600.00 Celulosa del Pacffico S.A. (CELPAC) Chile Timber, pulp, and paper 100.00 587.00 Minera Escondida Limitada (Escondida) Chile Copper mining 85.00 1,143.20 Frigorificos Colombianos, S.A. Colombia Services 0.18 0.18 Promotora de la Interconexi6n de los Gasoductos de la Costa Atlantica S.A. (Promigas) Colombia Utilities 10.00 34.70 Fort Young Hotel Dominica Tourism 0.60 3.64 Financial sector credit line' Jamaica Development finance 15.00 15.00 Banca Serfin, S.N.C. Mexico Development finance 60.00 180.00 Cementos Mexicanos (Cemex) Mexico Cement and construction materials 68.00 264.00 Fomento Econ6mico Mexicano S.A. de C.V. Mexico Beverages/consumer products 80.00 455.00 (FEMSA) Migranja S.A. Uruguay Fruits and vegetables 4.35 19.40 Polipropileno de Venezuela Propilven, S.A. Venezuela Chemicals and petrochemicals 47.00 165.30

Sub-total 794.58 5,953.32 Capital markets approvals in Latin America and the Caribbean (see p. 38) 47.04 174.23 TOTAL 841.62 6,127.55

1. Project undertaken jointly with Capital Markets Department.

34 ing and pulp industries, and on mobilizing addi- 3,200 CUMULATIVEINVESTMENT tional resources from other investors. IFC's credit APPROVALSFY85VES-TM line to Banco Frances del Rio de la Plata S.A. in Ar- (US$millions) gentina aims at improving the competitiveness of 2,400 medium-size enterprises and strengthening the bank's project economic analysis capacity. In line with the new emphasis placed by the Governments 1,600 of Argentina and Bolivia on exploration for, and development of, mineral resources, IFC has approved loans to Companias Asociadas Petroleras S.A. 800 (CAPSA) in Argentina for primary and secondary oil recovery,and to CompafmiaMinera del Sur S.A. 1 9 1X X ; (Comsur) in Bolivia to support the company's Cumulative polimetallic mining investments in Bolivia and -Yeadry neighboring countries. IFC supported efforts to improve the efficiency of public and private corporations by providing fee- based advisory services in privatizations and corporate restructurings. outslanding foreign debt by close to $1.1 billion. IFC's $60 million Multipurpose Credit Line to Ilighlights of the Year's Activities Banca Serfm will provide funds and financial engineering expertise to small and medium-size private Mexican firms. The line will also support DLuringfiscal year 1989, total financing of privatizations and new export-oriented projects in $842 million was approved for 30 projects in Latin mining, industry, agro-processing, and tourism. A America and the Caribbean, including capital mar- $8milliondloanototesCmnto Mexcaos gru kets projects. Of this amount, loans accounted for $775 million and equity investments for $67 mi- (Ceinex) will support an ambitious modernization lion. In FY88, IFC approved a total of $618 million and expansion program. Cemex is constructing a 1.3 million-tpy cement plant in northwestern Mex- i loan and equity financig for 26 projects i the ico and three export terminals in other parts of Mex- region. At the close of FY89, the Corporation had com- ico, as well as modernizing five of its plants. mitted investments of $1.9 billion in 160 companies In Venezuela, IFC approved a loan of $47.0 mil- in 22 countries in Latin America and the Carib- lion to Polipropileno de Venezuela Propilven, S.A. bean-$1.7 billion in loans and $236 million in eq- to build a 70,000-mtpy polypropylene plant. The uity. This compares with $1.2 billion in loans and project will use domestic gas feedstock to supply $208 million in equity in 150 companies at the end polypropylene to the local market. of FY88. A joint venture between IFC's Latin America and In FY89, IFC played a central role in the restruc- the Caribbean 1 and Capital Markets Departments turing of the Visa Group, one of Mexico's largest in- resulted in the approval of a financial sector credit dustrial conglomerates, whose main activities of $15.0 million to three leading commercial and include the production of beverages, distribution, merchant banks in Jamaica for onlending to compa- packaging, and food processing. In addition to pro- nies undertaking rehabilitation programs in the after- viding the Visa Group with an $80 million loan (the malh of Hurricane Gilbert. The $3.6 million dollar loan was made to Visa's subsidiary, FEMSA), the reconstruction and expansion of Fort Young Hotel Corporation helped the Group develop a "menu" of in ])ominica were supported by an IFC equity in- debt-reduction options. The restructuring has re- vestment of $0.6 million. duced the Visa Group's corporate debt by about A loan of $10 million was approved for Pro- $1.3 billion, to approximately $400 million, through motora de la Interconexi6n de los Gasoductos de la debt buy-outs, debt-debt swaps, debt-equity swaps, Costa Atldntica S.A. (Promigas) in Colombia for the and asset divestitures; it has also reduced Mexico's construction of a system of gas distribution to house-

35 holds on the northern coast. IFC also restructured Brazilian companies continued to attract IFC in- its loan to Frigorfficos Colombianos, a cold storage vestment. In the pulp and paper industry, IFC ap- company in Bogota, and provided the company with proved a $20 million loan for Aracruz Celulose S.A. an additional equity investment of $183,300. to fund the import of vital equipment; located in the In Chile, the Corporation approved loan and eq- little developed state of Espirito Santo, this uity financing of $85 million for the Escondida cop- $1,024 million pulp project will generate consider- per mine. With a total cost of more than able export earnings for Brazil. A $15 million loan $1.1 billion, this project demonstrates IFC's ability was approved to finance the expansion of Papel e to play a catalytic role by mobilizing substantial ad- Celulose Catarinense, a company IFC helped to es- ditional resources. In the pulp industry, IFC was in- tablish in 1966, which is now one of Latin strumental in raising additional funds for two new America's leading pulp and paper producers. IFC important export-oriented projects, whose combined also made a $65 million loan to help finance the ex- total cost exceeds $1.0 billion. IFC helped reopen pansion of the petrochemical plant of Petroquimica voluntary commercial lending to Chile by acting as do Nordeste (Copene) in Bahia, a northeastern state, lead manager for a $55 million syndicated loan to and is helping the company raise funds in the Euro- Celulosa Arauco y Constituci6n S.A., while also in- currency market. A $7.5 million loan and equity investing $55 million for its own account. IFC's pres- vestment package was approved for Adiboard S.A., ence was also key in helping to arrange over which will produce printed circuit boards largely for $440 million in financing for Celulosa del Pacffico radios assembled locally for the export market. This S.A., a Chilean-American joint venture. is IFC's first investment in this industry in Latin In Argentina, IFC approved a loan of $25 million America. to Compafiia Argentina de Petroleos S.A. (Astra), a In Bolivia, IFC provided $10 million in loan and major private oil producer, to help the company's equity to help finance the modernization and expan- expansion and modernization program. This pro- sion of the operations of Compafifa Minera del Sur gram reflects the Government's new policy of dereg- S.A. (Comsur) in zinc, lead, and silver mining. In ulation and encouragement of private investments in Uruguay, the Corporation approved loan and equity the hydrocarbons industry; it also includes down- financing of $4.35 million for a project of $19.4 mil- stream diversification into petrochemicals. Given the lion involving Migranja S.A., an export-oriented scarcity of other sources of finance, IFC's participa- fruit and vegetable company. tion was essential.

36 CAPITAL MARKETS

FC's Capital Markets Departmentcontinues to assist countries in the development of their financial sectors. The Department's principal activities include a5.i * advising governments on how to establish fiscal, : legal, and regulatory frameworks that will sup- -/ port market-oriented financial sector development; * investing in financial institutions in developing countries-often the first of their kind in the local market-and providing them with technical assistance and financing; * increasing the access of developing member countriesto internationalfinancial markets by fa- IFC's $50 million, privately placed New World Investment Fund cilitating foreign portfolio investment, debt- will target stock markets in Latin America. equity conversion facilities, and new issues of shares and bonds. The primary role of capital markets is to mobilize for 15 capital markets projects in 12 countries as savings and efficiently channel them into productive well as one that was worldwide. investments. Capital markets enable businesses to Among the year's 20 approvals, six involved start- raise risk capital through the issue of shares, and up projects or companies that had never before re- debt financing through the issue of long-term bonds. ceived EFCfinance. These include a venture capital They provide the liquidity needed to set the prices fund for the Philippines; India's first nationwide of financial instruments, the facilities to buy and stockbrokerage firm; an acceptances company in sell them readily, and the mechanisms to convert Ghana; and a privatized development finance com- one maturity or type of instrument into another with pany in Trinidad and Tobago. relative ease. The Corporation also provided new finance to Believing that efficient capital markets are essen- companies it had assisted previously. It participated tial to economic health, IFC seeks to identify the in- in tlae capital increases of Leasing Bolfvar in Colom- stitutional and policy gaps that hamper their growth bia, the Korea Investment and Finance Company, and to bolster the financial strength of companies Finantia in Portugal, udc Ltd. in Zimbabwe, and All with limited access to financing by mobilizing do- Asia Capital & Leasing (AACL) in the Philippines. mestic and international capital flows to the private Credit lines were extended to Banco Roberts and sector. Banico General de Negocios in Argentina; each line included an equity underwriting facility. In FY89 IFC promoted various types of projects HighlightActivitiedesigned. the Year's to stimulate international capital flows. For Highlightsof the Year's Activities example, it co-managed a DM30 million medium- tern private placement for Ram Dis Ticaret, the During fiscal year 1989, IFC investments totaling first such placement for a private Turkish non-finan- $160 million-$107 million in loans or debt securi- cia] company. It also co-led a $60 million export fi- ties and $53 million in equity-were approved for narcing facility, including a $47.5 million 20 capital markets projects, including 18 projects in syr,dicated backstop line for a European commercial 13 countries, one project that is worldwide in scope, paper program, for Turk Dis Ticaret Bankasi A.S. and one regional project. In FY88, the Corporation (Disbank), a leading Turkish commercial bank. IFC approved $220 million in loan and equity financing sponsored, and participated in, the issue of two new

37 FY89 ProjectApprovals: Capital Markets

Gross Project Company Country Activity Investment Cost (US$ millions)

Argentine Investment Company S.A. Argentina Debt/equity conversion fund 2.10 34.40 Banco General de Negocios S.A. Argentina Agency credit line 10.00 20.00 Banco Roberts S.A. Argentina Agency credit line 10.00 20.00 Intemational Investment Company of Chile Chile Debt/equity conversion fund 7.26 30.00 Leasing Bolivar, S.A.' Colombia Leasing 0.03 0.03 Continental Acceptances Limited Ghana Merchant bank 0.98 3.51 JM Share and Stockbrokers Pvt. Ltd. (JSB) India Brokerage company 0.55 3.90 Financial sector credit line2 Jamaica Credit line 15.00 15.00 Korea Investment and Finance Company Korea Short-term finance 2.70 20.00 Korea Investment and Finance Company Korea Short-term finance 2.18 34.50 New World Investment Fund (NWIF) Latin America Investment fund 12.50 62.50 Malaysia Growth Fund Malaysia Investment fund 0.00 45.25 All Asia Capital and Leasing Corp. (AACL) Philippines Leasing 0.28 2.00 Hambrecht and Quist Venture Capital Fund Philippines Venture capital 2.42 15.00 Finantia-Sociedade de Investimentos, S.A. Portugal Investment bank 0.25 1.70 The Thai Prime Fund Limited Thailand Investment fund 15.503 155.00 Trinidad and Tobago Development Trinidad Privatization/restructuring 5.15 7.30 Finance Company Limited and Tobago Ram Dis Ticaret (Ram) Turkey Euronote facility 7.58 16.50 Turk Dis Ticaret Bankasi A.S. (Disbank) Turkey Eurocommercial paper program 60.00 60.00 udc Ltd. Zimbabwe Leasing 0.33 2.50 Emerging Markets Investment Fund (EMIF) World Investment fund 5.00 76.50

TOTAL 159.81 625.59 1. As a rights issue below $250,000, this project is not included in the total number of approvals. 2. Project undertaken jointly with Departmnentof Investments, Latin America and the Caribbean 1. 3. Underwriting.

country funds: the Thai Prime Fund, which is listed nesia, Jamaica, Kenya, Lesotho, Malawi, Mexico, on the International Stock Exchange, and the Malay- Morocco, Pakistan, the Philippines, Portugal, Thai- sia Growth Fund, a semi-open-ended mutual fund. land, Trinidad and Tobago, Tunisia, Turkey, and Yu- An additional investment was made in the Emerging goslavia. Markets Investment Fund as part of a capital in- FY89 marked the first anniversary of the commer- crease, and Latin American stock markets were tar- cial launch of IFC's Emerging Markets Data Base geted in the New World Investment Fund, a (EMDB). EMDB, a computerized source of informa- $50 million private placement in which IFC partici- tion on equity markets in developing countries, was pated. developed by the Department over the years primar- These new-money funds were supplemented by ily as part of its technical assistance work and as a two debt-equity conversion funds that IFC helped to research tool for the Corporation's investment opera- assemble-a $50 million fund for Argentina, and a tions. It has also served as a basis for advice to $60 million companion fund to the Chile Investment member countries on the development of securities Company, which was launched last year. markets, which is often an important element in In FY89 IFC provided a substantial amount of their economic programs. To recover part of the ex- technical assistance and policy advice on financial pense of maintaining the data base and to meet the market development to governments in 30 countries. increasing demand of private sector users for the As part of these efforts, the Corporation conducted data, IFC began selling subscriptions to the compu- financial sector surveys, either in collaboration with terized data and to related publications, the Quar- the World Bank or at the request of member govern- terly Review of Emerging Stock Markets and the ments, in Argentina, Bangladesh, Botswana, Brazil, annual Emerging Stock Markets Factbook. IFC's in- Chile, China, Ecuador, Ghana, Hungary, India, Indo- dexes of stock market performance in developing

38 countries now appear regularly in the international fi- * expanding advisory services in areas related to nancial press. he development of capital markets-for example, the improvement of disclosure standards to protect investors; Future Plans * creating a broad range of financial institutions, such as investment banks, venture capital compa- IFC plans to continue to expand its capital mar- nies, and contractual savings institutions, in ket activities to help member countries mobilize eq- countries where they are currently lacking; uity funds and other resources suited to the * in appropriate cases, assisting governments in term-and-risk profile of business ventures in develop- the use of debt-equity conversion programs and ing countries. It has formed a new International Se- establishing funds for this purpose; curities Group to focus its efforts to introduce * helping creditworthy corporations from the de- strong companies in developing countries to the new veloping countries gain access to the interna- and increasingly diverse financing instruments avail- tional capital markets by providing introduction, able in the major capital markets. Activities on structuring, underwriting, and marketing ser- which the Corporation will focus include vices; * providing specialized technical assistance to * further strengthening its EMDB service. countries beginning to experiment with market- oriented institutions;

39 SYNDICATIONS

Fiscal year 1989 was an active year for IFC's Syndications Unit. Of the $1.4 billion of IFC loans approved, the amount syndicated or pending syndication was $398 million, compared with $148 million in FY88. In FY89 13 syndication transactions were undertaken, involving 64 participant institutions. The loan portfolio administered by IFC for the account of participants amounted to $923 million at the end of FY89. During the Five-Year Program (FY85-89), 278 separate participation agreements, totaling $889 million, were signed with 123 banks and other financial institutions from 25 countries. IFC acted as lead manager for a $55 million syndicated loan Syndications of approved loans in FY89 were the to CelulosaArauco y Constituci6nSA. in Chile and invested $55 millionfor its own account.The constructionof a new highest for the Five-Year Program. Although the pulp line will enable the company to produce 350,000 metric commercial banking community is for the most part tons of bleached softwood kraft pulp per year for export. still wary of additional developing-country exposure, project lending through IFC continues to attract bakpriiat. Th Coprto .ppassec financing an expansion of the Philippine Long Dis- bankpartcipnts.TheCorpratonaprases achtance Telephone Company. This financing represents project in depth and acts as lender of record, and te Telphone CmayThsfnanin r n normally loan administrator, for the participant the Corporatilon's first new money syndication i banks. Another factor in the growth of thethPilpneinsvrlya. Corps.Aortion sydcatorin activwtyha be the In Europe, the Syndications Unit assisted on two Corporation's syndication activity has been the in- invtv aia akteatettascin crease in the average size of IFC projects over re- innovative Capital Markets Department transactions cent years. The larger the project, the more likely it for Turkish borrowers. Together with J.P. Morgan, is to require some element of syndicated bank loan FeC co-lead managed a DM30 million private place- finance. ment for a company of the Koc Group, and syndi- IFC syndications in FY89 covered projects in Bra- cated with commercial banks a $47.5 million zil, Chile, Gabon, Ghana, Mexico, Morocco, Nige- backstop facility for the issuance of euro-commer- ria, the Philippines, Turkey, Venezuela, and cial paper by Disbank (Turkish Foreign Trade Bank). Yugoslavia. The institutions participating in these In Latin America, where the reluctance of com- syndications are listed on p. 41. mercial banks to increase exposure is most marked, In Africa, IFC helped finance Shell Gabon's IFC was successful in raising new money through share of the development of a major on-shore oil syndications in FY89 for projects in four countries: field in Gabon, the Corporation's largest syndication * a $55 million loan package for a major expan- ever for an African project. The $110 million loan sion of a pulp plant owned by Celulosa Arauco y had three lead managers-Banque Nationale de Constituci6n S.A. in Chile, with participations Paris, The First National Bank of Chicago, and Bar- taken by banks in Finland, France, Norway, and clays Bank PLC-and 16 other participant banks Sweden, together with a DM30 million parallel from Europe, Japan, and the United States. IFC also loan from a German financial institution; approved the syndication of a $43 million loan with * a $50 million package for a major greenfield a group of European banks for the Canadian pulp mill promoted by CompamifaManufacturera Bogosu Resources gold project in Ghana. de Papeles y Cartones S.A. of Chile and Simp- In Asia, IFC arranged a $40 million syndication son Paper Company of the United States, with with three German financial institutions to assist in participations from European commercial banks;

40 * a $5 million participation by a leading German cement producer, to help finance a major export- commercial bank in a major expansion of an eth- oriented expansion program; ylene plant owned by Companhia Petroquimica * for Propilven S. A., a Venezuelan petrochemicals do Nordeste, S.A. in Brazil; company, an $85 million financing package ar- * an initial syndication of $8 million for the ranged with Italian export credit agencies and a Cementos Mexicanos group, a leading Mexican group of French commercial banks.

Financial Institutions Participating in IFC Projects During FY89 Algemene Bank Nederland N.V. Gotabanken Amsterdam-Rotterdam Bank N.V. The Industrial Bank of Japan, Limited Banca Commerciale Italiana Irving Trust Company Banco Exterior de Espaiia Kuwait Asia Bank EC Banco Totta & Acores The Long-Term Credit Bank of Japan, Ltd. Banco di Roma Manufacturers Hanover Trust Company Bank fur Gemeinwirtschaft AG The Mitsubishi Bank, Limited Bank of America N.T. & S.A. The Mitsubishi Trust and Banking Corporation The Bank of Tokyo, Ltd. Monte dei Paschi di Siena Banque Francaise du Commerce Exterieur Morgan Guaranty Trust Company of New York Banque Indosuez NatiDnal Westminster Bank PLC Banque Intemationale a Luxembourg NederlandscheMiddenstandsbank N.V. - NMB Bank Banque Intemationale de Commerce S.A. The Nippon Credit Bank, Limited Banque Intemationalepour l'Afrique OccidentaleS.A. Osterreichische Landerbank A.G. Banque Nationale de Paris Osterreichische Volksbanken A.G. Banque Paribas PKbanken Banque Regionale d'Escompte et de D6p6ts Poslipankki Banque Sudamenis Privatbanken A/S Barclays Bank PLC ProvrinsbankenA/S BayBank Boston, N.A. Rabobank Nederland Bayerische Vereinsbank AG The Sanwa Bank, Limited Bergen Bank A/S Skandinaviska Enskilda Banken Caixa Geral de Dep6sitos Societ6 G6nerale Cassa di Risparnio di Torino Standard Chartered Bank Commerzbank AG The Sumitomo Bank, Limited Credit Industriel et Commercial de Paris Swiss Bank Corporation Cr6dit Lyonnais Swi.ss Volksbank Credit Suisse The Taiyo Kobe Bank, Ltd. Creditanstalt-Bankverein The Toyo Trust and Banking Company Limited DG Bank - Deutsche Genossenschaftsbank Union Bank of Finland Ltd. The Dai-Ichi Kangyo Bank, Limited Union Bank of Switzerland Deutsche Bank AG The United Bank of Kuwait PLC Dresdner Bank AG The Yasuda Trust and Banking Company, Limited The First National Bank of Chicago

41 oraniisba _n ISrin hO ist>^ mbasruo.bbtM

SHELL6iAUG14 Si. us $ 330,ooi,o0o Oil Field devtdoment df the Rabi-Kounp Projectfinancing ftu 1 -Seewrbolns- P lip' o .j11 V !1 IntemationalFinance Corporation dela po National 8anh f ChicaCgo Bank PLC TheFirst de Paris Barclays S.A. BaiaaueNationalb I e l PropjSven Sark NV San.di tOneia AG. A.0mnda-R.dsb Wtsnbr BankPLC d 11 Sla hcd-0 Onineidioke LAndenbank flg T.nl Naycot Peryquf•yic CreddLynas tnG ankAG. G*Mloonlus lZezezuela S.A. Ban bIr- b Ua.qin lJna Bankof Gd-pa ftsuGroup N.V. ThaScniOrk C.A p Wd-raaiceilissadnbnn Zu"iano t or Oa V e n o c o C .A| NL.V Pr o m ANmtbrbl S mhomoiniUNne erce r" BeneBankNederlandNaFranyuas ari,s nSlFin d s . ec . ial Ban n r h t neO cid sn ia l Facility r nacOe natt,e al a Parnr IlnA i S and i r Project Financing FF u0m.000 Iy1 CfAtkt.owlowa . $ 4 us8s0,88008,01 CaisarCentrales u oomooooa tconomique i I50i de Cooperation $8,419, M.Oboa,ss Sal Isrt kurs BanqueNationale de Pails 1o r nor le Ci n-mierce Aran d by Banque lnteinnat.nala Internationi . . 1 *i 1Indanride du G.tbon ,On a1 ti e Corprn0 Pariba,1 an ynniraarnnaSdtvbrAtenl rBarclaysBankL banLaunte Panqte 0rnal7,000, rianWGianrirn S. Gn cfrasnksNA anacfrllagrnafional rnrrle orernui Bnc9d ldiAenn4Cm u T0momerm L-a; BSa38,419,yer C 1r USt$ B'u Y-Gam:Credit US s so00.0o80 Societe Generale ~~~~~~~~~~~~~nternatP-id,,Je b Finance Corporation SaceL, intermational e9is `4 Finance Cop,t;O Bank of Chicago The First National inv[,,,-;? Bank PLC l Barclays ocnhrhmgh lc r-irPocrFr, inlrrui Cenrm cinreis foci Mcl, iorredito Chicago llL* Pcr o L National Bank of The First Banqar Par'a ie-Baorr.rarrn -/ Nationale de Paris Banue N tionle dParibas Banque d,P Banq e-NVatrrale Ctidt Lyonnais

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ru Sane eo|l | rnnleberottii, 5 SecondFlout Glass Line _ _ a nncsa= _ Foreign Currency Financing DM uiiy Solsrn 1 $6,ooo0 $5,00 ,00 US si3,900US ll U.S. $3,90000 s $68,ooo,000 corporation D lnrernationalPFmina Term Loan 1l FiU.S.- $20,000,000 1 p f-8T_ T,,riian1 D Fitting Rnte -~L 11 iwn Psoridnilibnnrlti Potici. Cc-mcm-rc 3. | CQtJUPO Bank fil,l n by 11d Suisse dib Creit l Compny l Finance Corporation ll MorganGuarantyTrust International CDorany MOrg 11ranWirnur A ee Bn N.h Bank NederlandL0Algemene N. Local CurrencvFinancing U.S. $15,700,000 Luxembourg Banque internationalea A.6.ur ye Prlan

42 FEE-BASEDAND OTHER ADVISORY of Pakistan on developing a privatization strat- SERVICES egy and on identifying candidates for privatiza- non. Since it began operations in 1956, IFC has pro- * 'The Corporation was retained by Philippine Air- vided substantial financial and technical advice to Lines(PAL) in connection with PAL's restructur- its corporate clients in connection with investments ing and privatization. in projects or companies. In recent years IFC has ex- * IFC provided advice on privatization techniques panded its structuring and advisory services and with respect to the Philippines Plaza Hotel in begun providing them independently of project fi- Manila. nancing to both governmental and private clients. * IFC advised the Government of Indonesia on the The strong growth of IFC's advisory services contin- potential for privatizing a group of hotels owned ued during FY89. Advisory service fees generated by state companies. $15.5 million in income, compared with $3.7 mil- * IFC provided advice to the Government of Oman lion in FY88. on the establishment of a private sector gas tur- bine power station and transmission system. * IFC advised the Government of Argentina on cer- Corporate Finance Services tain matters related to an initiative to partially pri- In November 1988 Corporate Finance Services vatize Aerolineas Argentinas. (CFS) was created as a specialized group within *The Corporationrpory has initiated advisor services LFC to provide advisory services and financial assis- in response to a request from the Government of tance in corporate restructurings and privatizations, Nepal to provide support in the implementation enhancing IFC's capability in these two key areas. of a privatization program. The work of CFS stems from the Corporation's in- * IFC is advising a consortium led by C. Itoh of vestment role. Expertise in the specialized field of Japan on the financial structure and security privatization, combined with country and industry package of a proposed power plant in Malaysia.

knowledge, qualify the Corporation to play an effec- * FC provided advice to the Goverment of Tur- tive role in leading and completing privatization pro- key on the possible privatization of an integrated jects. Through CFS, IFC can expand its corporate textile company now owned by the Government. restructuring services, especially to private companies facing high debt servicing burdens; such companies often require recapitalization and operational Corporate Restructurings improvements before they can respond to market opportunities arising from new liberalized economic The Corporation participated in some major cor- policies and recover from foreign exchange losses porate restructurings in FY89: on their debt. Corporate restructuring is also a key * In Mexico, IFC provided financial structuring component in most privatization exercises, largely services and acted as lead investor in the imple- because government-owned enterprises often require mentation of the $1.7 billion corporate restructur- restructuring to make the transition to the private ing and debt reduction program of Visa Holding, sector. CFS's activities complement, and are carried of its largest operating subsidiary, Fomento out in close cooperation with, the activities of IFC's Econ6mico Mexicano S.A. de C.V. (FEMSA), regional investment departments and its Capital Mar- and of its affiliate, Grupo Cermoc S.A. de C.V. kets Department. (jointly called the Visa Group). This was one of the largest corporate restructurings in Latin America. The Corporation began a first-phase as- Privatizations signmentto designa restructuringscheme last fiscal year and, under a subsequent mandate, suc- cessfully concluded the implementation in De- A number of privatization assignments were un- cember 1988. dertaken by IFC in FY89: * A flexible line of credit provided by IFC to * IFC joined with N.M. Rothschild & Sons Lim- Banca Seffin, one of Mexico's leading commer- ited (UK) to provide advice to the Government cial banks, was designed to enable IFC and

43 Banca Serfin to combine their corporate restruc- * In Guatemala, IFC is assisting the Government turing expertise and other services to help me- with a review of policies regarding the cement in- dium-size private enterprises. dustry. * The Corporation assisted the Petroleum Author- ity of Thailand in structuring and reviewing the Other Advisory Services feasibility of the olefin/aromatic cracker of the proposed second Thai petrochemical complex. The Corporation's Capital Markets Department In addition to privatizations and corporate restruc- unerpoo atnub ofptal assteproject turings, IFC continues to provide advisory services cn ctionuwith theiWol ankidurng FY89. requiringreurn aamra broad rangeag off expertise:xets:i Teepoetconjunction withr eciethe Worldnp Bank 8 during FY89. * IIFCis advising Yasar Group, one of Turkey's These proJeCtSare described on p. 38. largest diversified industrial and trading companies. * The Corporation advised Corporaci6n Venezol- ana de Guayana on the selection of a foreign technical partner for a pulp and paper mill. AFRICA ENTERPRISE FUND * IIFCis advising Kobe Steel (Japan) in the development of a project in Ciudad Guayana, Venezu- The Africa Enterprise Fund (AEF), which was ap- ela. proved by IFC's Board of Directors in July 1988, - Also in Ciudad Guayana, Venezuela, IFC is con- began operations in March 1989. By the close of ducting a feasibility study on a centralized facil- FY89, it had approved investments in two projects, ity for producing carbon anodes to be used in the and another 50 project proposals were under consid- production of aluminum in smelters owned eration. jointly by the Government and private interests. AEF will allow IFC to increase its assistance to * In Colombia, the Corporation is organizing com- member countries in sub-Saharan Africa by financ- mercial finance for a joint private sector/governing small and medium-size projects that are too ment project to construct and operate an oil small to be the object of direct investment by the pipelCie. Corporation. AEF's projects must pass the same - IFC is studying the possible restructuring oftetasoirICpjcs:hymutavtests as other IFC projects: they must have theep- po- Gambia Marine Products, a fish processing com- tential to be profitable; they must benefit the econ- pany in The Gambia. aIFCis assisting in the revision of the financial omy of the country in which they •~~~~.is asitn.ntervsino IF hiaca they must be technically sound. are located; and plan of Zambia Hotel Properties Limited. hyms etcnclysud During a three-year trial period, AEF expects to IIFChelped Nigeria National Petroleum Corpora- invest up to $60 million in approximately 100 enter- tion identify possible joint venture partners. tionidenifyossble ointvenure artnrs.prises, helping entrepreneursto establish new busi- * The Corporation has been retained to appraise, pesses, helpineteprene estine busi- and arrange financing for, the Oso oil field devel- nesses or rehabilitate or expand existing businesses. opment in Nigenia. AEF's investments are made generally on commer- * In the Philippines, IFC provided advice on struc cial terns and can be in the form of loans, guaran- turing and arranging the froancing for a major ex- tees, and equity-type instruments. Investments may pansion of the Philippine Long Distance range from $100,000 to $750,000, up to a maxi- Telephone Company. mum of 40 percent of the total cost of a project, * Also in the Philippines, the Corporation com- which is expected to range from $250,000 to $5 mil- pleted a technical advisory assignment to help es- lion. tablish the feasibility of a deep gold and copper The Corporation's field offices in Abidjan, Lagos, mining project and is now providing advisory and Nairobi have been expanded to handle AEF op- services to structure and arrange project financ- erations. To enable it to be truly responsive to the ing. The client is Far Southeast Gold Resources, needs of its African clients, some decision-making Inc., a joint venture between Lepanto Consoli- functions for AEF projects have been delegated to dated Mining Co. of the Philippines, and Galac- the field offices, which will work closely with local tic Resources Ltd. of Canada. financial institutions.

44 AFRICA PROJECT DEVELOPMENT Examples of APDF Projects FACILITY BCiTSWANA Yarley Cosmetics, sponsored by a Botswana woman The Africa Project Development Facility (APDF) who has manageda chain of hairdressingsalons, will identifies promising African entrepreneurs and helps manufactureAfro Haircare Products in a new facilityin them to organize, diversify, or expand existing busi- Gaboronefor both local and exportmarkets. In accor- nesses or to start new ones. APDF advises these en- dance with the businessplan developedby APDF,the trepreneurs on the preparation of viable projects, $450,000 project received technical assistance from working with them until project financing has been Jolnson Productsin the United States.It has created 15 newvJobs and additionalexports for Botswana. secured, and provides partial funding for market, technical, or other feasibility studies that may be COTE D'IVOIRE needed. APDF is a UNDP project funded by UNDP, Pehazur, a fish processingcompany, received advice the African Development Bank, a number of bilat- from APDF in structuringa viable long-termdevelop- ment programand expandingand modernizingits exist- eral donors, and IFC itself. 1IFCiS the executing ingfacilities to meetgrowing demand for its productsin agency. the Europeanmarket. A $2.1 million fish processing During 1988, APDF prepared proposals and ob- facilitywas designedand equippedto complywith the tained financing for 28 projects in 13 different coun- EC's health and securitystandards. Financing was ob- tries. These projects, representing total investments tained from internal cash generation and fro.n a of $45 million, will help create over 2,000 jobs at a $ 700,000medium-term loan by the SocieteGenerale de relatively lQw cost per job. B,mquede C6te d'Ivoire. Since APDF began operations in July 1986, more MALAWI than 1,000 ideas for projects have been submitted to Chirambe Estates, a poultry farm sold by the Govern- its field offices in Abidjan and Nairobi. Demand for ment of Malawias partof its privatizationprogram, was APDF's services has outstripped expectations, and purchasedby a Malawianentrepreneur. APDF provided APDF's experience has demonstrated that the num- tie sponsorwith a fair valuationof the farm, enabling ber of African entrepreneurs willing and able to un- him to conduct informedprice negotiations.The pur- bertofeAfricane sentoreprojeneswisllngeand.abletou- chase was funded through a USAID-assistedline of dertake private sector projects is large. creditto the CommercialBank of Malawi. Despite its small size, APDF has already had a positive impact in Africa. As African countries make NIGERIA policy adjustments designed to encourage their pri- After reviewing the originalbusiness plan of African vateXsectors,APDF helps the continent's entrepre- Aoses, a flowerexport project in Kaduna,APDF advised vneursetors,ke advantage of thesepositivechanges. thlesponsor that the project shouldbe modifiedto pro- neurs to take advantage of these positive changes. duce roses for the European market rather than an- Through its support of APDF's work, IFC has been t]huriumsfor the NorthAmerican market. IFC identified able to make a substantial contribution to economic a technicalpartner, the French firm Meilland, for the development in Africa. $ 1.4 millionproject. Financing was providedby a con- Fourteen countries have committed funds to sup- sortiumof Nigerianbanks headedby the local agricul- port APDF: Belgium, Canada, Denmark, Finland, tural developmentbank. Rose plantingwas begun on a France, the Federal Republic of Germany, Italy, pilot basis to identifythe varietiesbest suited for pro- Japan, the Netherlands, Norway, Sweden, Switzer- (luctionin Nigeria. land, the United Kingdom, and the United States. Brazil, India, and Israel have agreed to provide APDF with technical assistance. UNDP provides substantial financial support, and its Assistant Ad- ministrator serves as the Chairman of APDF's Advi- sory Board. The African Development Bank, in 'The donors to APDF, whose present mandate ex- addition to providing financial support, serves as pires in June 1990, are currently considering a possi- APDF's regional sponsor and is represented on its ble second phase for APDF in which the scale of its Board of Directors. aclivities would be enlarged.

45 AFRICAN MANAGEMENT fnies from 20 different industrialized and developing SERVICES COMPANY countries. These companies are all members of the Industry Council for Development Services (ICDS) and will stand behind AMSCo to provide person- With the cooperation of UNDP and the African nel and training services to enable it to carry out its Development Bank, IFC launched the African Man- mandate. The Chairman of AMSCo is Dr. Carl L. agement Services Company (AMSCo) in FY89 to Angst, and Mr. Tener Eckelberry has been ap- address an important need of African enterprises- pointed as AMSCo's first President. the need for better management. The idea behind When AMSCo identifies client companies in need AMSCo is that the weaknesses of many private en- of senior executives, it will be able to tur to its pri- terprises and the sluggishness of privatization efforts vate sector shareholders to identify candidates to fill in Africa can be traced partly to a shortage of well- those positions. AMSCo's services will be paid for trained and experienced managers in many countries. by its African corporate clients, and AMSCo will be AMSCo, which iS bemngimplemented as a UNDP AMSCo'which is being implemented as a UNDP a commercial, self-sustaining venture. A fund of project, represents a novel formula for bringing to- $7 million will be available to provide partial fi- gether public-sector funding and private-sector investment and management expertise. AMSCo B.V. nance for management contracts with AMSCo in vestmnt ad mangemetexprtis. AMSo BXcases where companies cannot initiayl carry their has been incorporated in Amsterdam as a Dutch fcost. wherebcons toth indtilly made by company.copn.Some Sm70pretoitshrsaeelby 70 percent of its shares are held by thefull Governmentscost. Contributions of Belgium, to this Denmark,fund will Finland,be made theby IFC and other financial institutions, including the Federnments of Germany, Denmarland, the African Development Bank (ADB), the Danish In- Federal Republic of Germany, the Netherlands, Por- dustrialization Fund for Developing Countries tugal, the United Kingdom, and the United States. (IFU), the Finnish Fund for Industrial Development In line with IFCa'slong-term objective of helping Cooperation (FINNFUND), France's Caisse Cen- to establish locally managed, profitable, and competi- trale de Cooperation Economique (CCCE), the Ger- tive businesses in Africa, AMSCo will provide train- man Finance Company for Investments in ing programs to ensure the existence of a pool of Developing Countries (DEG), the Netherlands' Fi- well-trained African nationals prepared to take over nance Company for Developing Countries (FMO), the management of their enterprises when the man- the Development Bank of Portugal (BFN), the Swe- agers provided by AMSCo have completed their dish Fund for Industrial Cooperation with Develop- terms. A training fund of some $7 million to sup- ing Countries (SWEDFUND), and the United port these programs has been set up through contri- Kingdom's Commonwealth Development Corpora- butions from UNDP and ADB and the Governments tion (CDC). The remainder of AMSCo's shares are of Belgium, Italy, the Netherlands, Sweden, and held by more than 40 international private compa- Switzerland.

46 CARIBBEAN PROJECT February 1989, it opened a new Eastern Caribbean DEVELOPMENT FACILITY Regional Office in Barbados, which will make it more accessible to clients in that region and enable The Caribbean Project Development Facility it to provide a more efficient service. CPDF's plans (CPDF) continued to play an important role during to expand its operations in 1988 to include six Cen- FY89 in helping entrepreneurs in the Caribbean to tral American countries were temporarily deferred find financing-both debt and equity-for private until adequate funding could be secured to ensure sector projects. By identifying worthwhile projects reasonable continuity for operations in the region. and developing them to the point where they are The Government of Japan and several government bankable and can tap local, regional, and intema- agencies in Europe have expressed an interest in tional financial resources, CPDF fills a critical gap helping to finance this expansion, which is now in the financial intermediation process. expected to take place in the second half of 1989. CPDF was established in late 1981 under the aus- C]'DF receives support from five government pices of UNDP, with IFC as the executing agency. agencies in Canada, the Federal Republic of Ger- Since its inception, CPDF has helped almost 50 pro- many, the Netherlands, the United Kingdom, and jects, with aggregate investment costs of about the lJnited States, as well as three multilateral devel- $100 million, to obtain financing. Ten of these pro- opment institutions, the Inter-American Develop- jects, with a total estimated cost of $18.5 million, ment Bank, UNDP, and IFC. All of these agencies were approved in 1987 and 1988. and institutions have renewed and increased their CPDF currently operates in 21 countries and commitments to assist in funding CPDF's opera- territories throughout the Caribbean basin. In tions for the five-year period 1988-92.

The Caribbean Project Development Facility helped Jablum (Jamaica) Limited, which produces Jamaica's famous Blue Mountain coffee, raisefinancing for expansion and financial restructuring.

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47 FOREIGN INVESTMENT ADVISORY Belgium, Finland, and the Netherlands. Sweden con- SERVICE tributed to the trust fund in FY88; Japan and Swit- zerland will do so in FY90. The Foreign Investment Advisory Service (FIAS), established as an IFC operation in FY86, became a joint service of IFC and the Multilateral Investment Guarantee Agency (MIGA) when MIGA began operations in FY89. FIAS's mandate-to advise the gov- TECHNICAL ASSISTANCE AND ernments of developing member countries on TECHNOLOGY TRANSFER policies, programs, and institutions that have an impact on foreign direct investment-remains un- changed. FIAS's activitiesexpanded in FY89, as FIAS un- Technical Assistance dertook 14 advisory projects in as many countries, as well as four research projects, and set plans in motion for four international or interregional confer- IFC seeks to contribute to the success of private ences on foreign investment issues. Ten of the advi- enterprises in the developing world by providing sory projects and two of the research projects were them with technical assistance to ensure that they completed during the year, and three of the confer- are financially, managerially, and technologically ences were held. Although FIAS's work during sound. To support its efforts in this area, in fiscal FY89 was focused primarily on countries in Africa years 1988 and 1989 IFC set up seven technical as- and Asia, FIAS is now increasing its activities in sistance (TA) trust funds with over $5 million con- the rest of the developing world, with new projects tributed by the European Community and in Europe, Latin America and the Caribbean, the government agencies in Canada, Italy, the Nether- Middle East, and North Africa. lands, Sweden, Switzerland, and the United States. FIAS continued to advise its clients on a wide The TA funds complement UNDP's ongoing $1 mil- range of investment policy issues during FY89, in- lion Investment Feasibility Study Facility, which is cluding foreign exchange allocation to joint ventures used mainly by IFC. By financing a broad range of (China), the structuring of foreign investment codes services, such as sector studies, pilot operations for (Togo, Yugoslavia), the establishment of investment new technologies, pre-feasibility and feasibility stud- institutions (Papua New Guinea), and the implemen- ies, training programs, and short-term management tation of investment incentives (the Association of support, the TA funds enable IFC to develop promis- South East Asian Nations, Togo). FIAS also coming project proposals into bankable ventures and to pleted analyses of general foreign investment issues rehabilitate projects in difficulty both within and out- in Guinea, Lesotho, and Madagascar and identified side its portfolio. The Corporation expects to mobi- impediments to foreign direct investment in agricul- lize additional resources from other countries to set ture in Indonesia and Senegal. up similar TA funds in the near future. FIAS's research projects aim at developing exper- During FY89, IFC's Engineering Department sup- tise on issues that may come up in the context of ported 15 technical assistance projects, described in its advisory work. For example, research into the in- the box on p. 49, which were partially financed by centive effects of debt-equity swaps has served so $1.5 million from the trust funds. One of the TA far as the basis for advice to three countries on the projects laid the groundwork for a possible new IFC structuring of debt-equity swap programs. A study initiative-a facility to help entrepreneurs in the on the effectiveness of investment promotion tech- South Pacific island countries develop private sector niques was also completed during the year and ventures and obtain financing for them. Like IFC's served as the basis for two of the conferences organ- Africa and Caribbean Project Development Facilities ized by FIAS in FY89. (see pp. 45 and 47), the South Pacific Facility will FHAS'sactivities during the fiscal year were target mainly small and medium-size projects. funded by UNDP, IFC, MIGA, FIAS's trust fund, The Engineering Department also accepted an ad- and fees paid by clients. Contributions of about visory assignment during FY89 that calls for a feasi- $1.25 million to the trust fund were received from bility study for a modular carbon plant in Venezuela.

48 Technology Transfer tries to identify and acquire the technologies they need to launch successful new ventures or to mod- One of the Department's achievements in FY89 erni2e, expand, or diversify their operations. It can was a photovoltaic project in Shenzen, China that also help owners of technologies to locate applica- was developed through the efforts of its Technology tions and business partners in developing countries and Development Unit (TDU). Using U.S. know- for their technical processes and expertise. Technolo- how, the Chinese plant will manufacture a new gen- gies may be transferred not only from the developed eration of solar-powered consumer products, mainly countries to the developing countries, but also from for export to the United States. This project, which one developing country to another. involves the transfer of an emerging technology, can The range of technologies of interest to busi- be replicated in other countries. TDU is currently nesses in developing countries includes both well-es- pursuing possible commercial applications in Latin tablished processes and the latest developments in America for satellite telecommunication technology. areas such as biotechnology and electronics. IFC A new Technology Service was established on an can assist with the negotiation and implementation experimental basis in fiscal year 1989. Drawing on of technology transfers, which can be effected in a the Department's extensive international network of variety of ways such as licenses, joint ventures, turn- contacts, IFC acts as a broker in technology trans- key plant arrangements, or training programs, fers, helping businesses in developing member coun- amonagothers.

Nature of Activity Technical Assistance Projects Country

SectorStudy -Tourismprospects SouthPacific region -Automotivesector Global -Food preservation/processingtechnologies Global -Automotivesector Thailand

Projectidentification/ -Evaluationof gold mining project Ghana Pre-feasibility - Sewingthread project Egypt - Year-roundvacation resort India

Feasibilitystudy! - Integratedtransport system Tanzania Technicalaudit - Gold/coppermine Philippines - Agribusinessdiversification Nigeria - Export-orientedgarment plant Honduras

Pilot plant -Metallurgicaltesting of iiewU.S. Peru processto convertgold/silver concentrateto dore bars

Projectrehabilitation -Integratedtextile mill Honduras -Tungsten/tinmine Bolivia

Development -Facilityto help entrepreneurs SouthPacific of new initiative developbankable project:s islandcountries

49 *EL 3s *L LJ..L. IA L L

T o keep pace with the steady expansionof to serve part-time as Adviser to IFC in Scandinavia. its main business of financing private sec- Mr. Wilfried E. Kaffenberger assumed responsibility tor projects in the developing world and of for IFC's advisory services in addition to his duties its new, innovative fee-earning activities, on portfolio matters, and Mr. Peter C. Jones became the Corporation has increased its staffing and Head of the new Corporate Finance Services Group. adapted its organizational structure several times in There were also staffing changes in IFC's the past few years. In fiscal year 1989, three new London and Paris offices. Mr. Gunter Kreuter an- units requiring additional highly specialized staff nounced his intention to retire as IFC's Special were created: the Corporate Finance Services Representative in Paris, after 27 years of dedicated Group; the International Securities Group, which is service with the World Bank and the Corporation. part of the Capital Markets Department; and the Af- On September 1, 1989 Mr. Giovanni Vacchelli will rica Enterprise Fund. A new position-Operations take up the position vacated by Mr. Kreuter, and Adviser-reporting to the Vice President for Invest- Mr. Christopher Bam will succeed Mr. Vacchelli as ment Operations was also created. TFC's Special Representative in London. IFC's Foreign Investment Advisory Service be- At the end of the fiscal year, IFC had 541 staff came a joint venture of IFC and the Multilateral In- members on its payroll, compared with 523 on vestment Guarantee Agency, the newest member of June 30, 1988, in addition to a large number of full- the World Bank Group, in FY89. IFC opened a new time consultants and special staff at headquarters field office in Casablanca, Morocco early in the fis- and in the field. In keeping with its international cal year and the Caribbean Project Development Fa- character, some 74 nationalities were represented on cility opened an office in Bridgetown, Barbados in the Corporation's staff, including persons from 56 February 1989 to serve the Eastern Caribbean re- developing countries. More than 36 percent of IFC's gion. managers and 43 percent of higher-level staff are During the year, IFC mourned the death of Mr. from developing countries. Women currently occupy Naokado Nishihara, who gave invaluable service to 57 of the higher-level staff positions. The number of the Corporation as its Adviser in Tokyo (and later higher-level staff positions is expected to increase in as Senior Adviser) for over 20 years. the coming year in line with the continuing expan- FY89 saw a number of changes at the managerial sion of IFC's operations. level. Mr. Charles 0. Sethness succeeded Mr. David Recruitment activities during fiscal year 1989 fo- B. Gill, who retired as Director of the Capital Mar- cused on increasing global awareness of IFC and its kets Department. Mr. Nicholas Noon, the personnel needs through advertisements placed in Department's Deputy Director, resigned to take a leading international journals and presentations position in the private sector in the United States; made at major business schools in Europe and he will be succeeded by Mr. Robert Graffam on North America. In FY89, IFC recruitment teams vis- July 17, 1989. Mr. Andreas M. Raczynski was pro- ited Geneva, London, Mexico City, Milan, Monter- moted to Deputy Director of the Engineering Depart- rey, Ottawa, Paris, Rio de Janeiro, Sao Paulo, and ment, replacing Mr. David Minch, who returned to Toronto and participated in World Bank recruitment the private sector in the United Kingdom. Mr. Pho missions to the Far East and the Middle East. IFC Ba Quan will become Director of the Department of faces the need to recruit substantial numbers of suc- Investments, Asia 1, on July 1, 1989 when Mr. cessful professionals from the private sector who are Torstein Stephansen retires after 22 years of distin- interested in the challenge posed by IFC's develop- guished service in IFC. Mr. Stephansen has agreed ment work and wish to make a contribution to it.

50 FINANCIAL STATEMENTS

InternationalFinance Corporation Annual Report 1989

BalanceSheet 52

Statementof Income 53

Statementof CashFlows 54

Statementof CapitalStock and VotingPower 55

Notesto FinancialStatements 56

Reportof IndependentAccountants 60

51 InternationalFinance Corporation BalanceSheet Exhibit A June 30, 1989 and June 30, 1988 In thousandsof United Statesdollars-See Notes to Financial Statements, Exhibit E 1989 1988 ASSETS

Cash, depositsand securities-Note B ...... $1,313,404 $1,278,202 Receivables-Note C ...... 93,276 65,634 Loan and equity investmentsdisbursed and outstanding-Note D Loan investments ...... 2,320,267 1,873,733 Equity investments ...... 472,454 414,451 Totalinvestments ...... 2,792,721 2,288,184 Less: Reserve against losses ...... (257,927) (223,590) 2,534,794 2,064,594 Net receivablefrom currencyswaps-Note G ...... - 2,036 Other assets ...... 53,161 16,486 TOTALASSETS ...... $3,994,635 $3,426,952

LIABILITIESAND EQUITY

Liabilities: Payablesand other liabilities-Note F ...... $ 79,253 $ 74,090 Borrowingswithdrawn and outstanding-Note G From market sources ...... 1,560,703 1,276,221 From International Bank for Reconstruction and Development ...... 694,503 770,795 Totalborrowings ...... 2,255,206 2,047,016

Net payable on currencyswaps-Note G ...... 44,937 Deferredincome ...... 32,592 17,394 Total Liabilities ...... 2,411,988 2,138,500 Capital and AccumulatedEarnings: Capital stock, authorized 1,300,000 shares of $1,000 par value each-Note H Subscribed ...... $1,112,817 $1,085,208 Less: Portion for which payment is not yet due ...... 164,915 234,984 947,902 850,224 Payment on account of pending subscription ...... 67 33 Accumulated earnings ...... 634,678 438,195 TotalEquity ...... 1,582,647 1,288,452 TOTAL LIABILITIES AND EQUITY ...... $3,994,635 $3,426,952

52 Intemational Finance Corporation Statementof Income Exhibit B For the fiscal years ended June 30, 1989 and June 30, 1988 In thousands of United States dollars-See Notes to Financial Statements, Exhibit E 1989 1988 INCOME Incomefrom loan and equity investments: Interestand financialfees-Note I ...... $244,357 $217,049 Dividendsand profitparticipations ...... 30,830 15,507 Capitalgains on equitysales ...... 118,616 32,949 Servicefees ...... 25,303 11,765 Incomefrom depositsand securities ...... 101,517 67,691 Translation(losses) gains net ...... (1,554) 582 Other(losses) income ...... (574) 32 TOTALINCOME ...... 518,495 345,575

EXPENSES Chargeson borrowings ...... 184,649 132,545 Administrativeexpenses ...... 76,827 71,586 Provisionfor losses-Note D...... 59,635 40,389 Contributionsto specialprograms-Note J...... 900 500 TOTALEXPENSES ...... 322,011 245,020 NET INCOME ...... $196,484 $100,555

53 InternationalFinance Corporation Statementof Cash Flows Exhibit C For the fiscal years endedJune 30, 1989 and June30, 1988 In thousandsof United Statesdollars-See Notes to Financial Statements, Exhibit E 1989 1988

Cashflows from investing activities: Loan and equity disbursements ...... $ (870,045) $ (761,918) Loan repayments and equity redemptions ...... 234,287 315,871 Sales of loans and equity investments at cost ...... 36,328 22,148 Net cash used in investingactivities ...... (599,430) (423,899)

Cash flowsfrom financingactivities: Draw-down of IBRD borrowings and new issues ...... 502,792 551,223 Repayments on borrowings ...... (184,723) (88,769) Capital subscription payments ...... 97,680 128,644 Net cash providedby financingactivities ...... 415,749 591,098

Cash flowsfrom operatingactivities: Net income ...... 196,484 100,555 Adjustments to reconcile net income to net cash provided by operating activities: Provision for losses ...... 59,635 40,389 Translation(gains) losses ...... 1,554 (582) Increases in accrued income on loans, deposits and securities ...... (26,627) (12,266) Increase (decrease)in accounts payable and other liabilities ...... 27,267 (78,164) Decrease (increase) in other assets ...... (30,447) 33,946 Net cash providedby operatingactivities ...... 227,866 83,878

Increasein cash, depositsand securities ...... 44,185 251,077 Effectof exchange rate changes on cash, depositsand securities ...... (8,983) 7,142 Net increase in cash, depositsand securities ...... 35,202 258,219 Cash, depositsand securitiesat beginningof year ...... 1,278,202 1,019,983 Cash, depositsand securitiesat end of year ...... $1,313,404 $1,278,202

Supplementaldisclosure of non cash activities: Increase (decrease)resulting from exchange rate fluctuation: Loans outstanding ...... (60,398) 3,641 Cash, deposits and securities ...... (8,983) 7,142 Borrowings and swap activities ...... (65,732) 9,269

54 InternationalFinance Corporation Statement of Capital Stock and Voting Power Exhibit D June 30, 1989 and June 30, 1988 In thousands of United States dollars CapitalStock VotingPower CapitalStock VotingPower Amount Percent Number Percent Amount Percent Number Percent Members Paid of Total of Votes of Total Members Paid of Total of Votes of Total Afghanistan ...... $ 1i1 .01 361 .04 Liberia ...... I...... $ 83 .01 333 .03 Antigua and Barbuda ...... 13 263 .03 Libya ...... 55 .01 305 .03 Argentina ...... 19,205 2.03 19,455 1.98 Luxembourg ...... 1,078 .11 1,328 .14 Australia ...... 23,839 2.51 24,089 2.46 Madagascar ...... 11.....i .01 361 .04 Austria ...... 9,943 1.05 10,193 1.04 Malawi ...... 853 .09 1,103 .11 Bahamas,The ...... 142 .01 392 .04 Malaysa ...... 7,668 .81 7,918 .81 Bangladesh ...... 4,552 .48 4,802 .49 Maldives ...... I .... I.. 8 * 258 .03 Barbados ...... 159 .02 409 .04 Mali ...... 116 .01 366 .04 Belgium ...... 24,702 2.61 24,952 2.54 Mauritania...... 55 .01 305 .03 Belize ...... 44 294 .03 Mauritiius...... 736 .08 986 .10 Benin ...... 67 .01 317 .03 Mexicc ...... I.. 10,306 1.09 10,556 1.08 Bolivia ...... 841 .09 1,091 .11 Morocco ...... 4,552 .48 4,802 .49 Botswana ...... 64 .01 314 .03 Mozarrbique ...... 182 .02 432 .04 Brazil...... 19,885 2.10 20,135 2.05 Myanmar** ...... 666 .07 916 .09 Burkina Faso ...... 432 .05 682 .07 Nepal ...... 306 .03 556 .06 Burundi ...... 100 .01 350 .04 Nether ands ...... I ..... 28,273 2.98 28,523 2.91 Cameroon...... 885 .09 1,135 .12 NewZealand ...... 1,583 .17 1,833 .19 Canada...... 41,087 4.35 41,337 4.21 Nicaragua ...... 184 .02 434 .04 Chile ...... 4,552 .48 4,802 .49 Niger ...... I...... 131 .01 381 .04 China ...... 8,122 .86 8,372 .85 Nigeria ...... 10,900 1.15 11,150 1.14 Colombia ...... 4,073 .43 4,323 .44 Norway ...... 8,865 .94 9,115 .93 Congo, People's Republic Oman .598 .06 848 .09 of the ...... 131 .01 381 .04 Pakistan ...... 8,626 .91 8,876 .90 Costa Rica ...... 362 .04 612 .06 Panarra ...... 426 .04 676 .07 C6ted'lvoire ...... 1,349 .14 1,599 .16 Papua New Guinea ...... I 490 .05 740 .08 Cyprus ...... 1,077 .11 1,327 .14 Paraguay ...... 270 .03 520 .05 Denmark ...... 9,347 .99 9,597 .98 Peru ...... I.. 1,777 .19 2,027 .21 Djibouti ...... 21 * 271 .03 Philippines ...... 3,247 .34 3,497 .36 Dominica ...... 18 268 .03 Polancl ...... 4,090 .43 4,340 .44 Dominican Republic ...... 598 .06 848 .09 Portugal ...... 4,194 .44 4,444 .45 Ecuador ...... 1,479 .16 1,729 .18 Rwanda ...... 306 .03 556 .06 Egypt, Arab Republic of ..... 6,108 .64 6,358 .65 St. Lucia ...... 37 * 287 .03 El Salvador ...... 11 261 .03 Saudi Arabia ...... 14,447 1.52 14,697 1.50 Ethiopia...... 33 * 283 .03 Senegal ...... 1,106 .12 1,356 .14 Fiji ...... 108 .01 358 .04 Seychelles ...... 15 * 265 .03 Finland ...... 7,907 .83 8,157 .83 Sierra Leone ...... I .... 83 .01 333 .03 France ...... 57,741 6.09 57,991 5.91 Singapore ...... 177 .02 427 .04 Gabon ...... 664 .07 914 .09 Solomon Islands ...... 19 269 .03 Gambia, The ...... 35 * 285 .03 Somalia ...... 83 .01 333 .03 Germany Federal Republic South Africa .8,108 .86 8,358 .85 of ...... 64,929 6.85 65,179 6.64 Spain ...... 11,740 1.24 11,990 1.22 Ghana ...... 2,242 .24 2,492 .25 Sri Lanka ...... I.. 3,594 .38 3,844 .39 Greece ...... 3,051 .32 3,301 .34 Sudar ...... 111 .01 361 .04 Grenada ...... 46 296 .03 Swaziland...... I .... 404 .04 654 .07 Guatemala ...... 598 .06 848 .09 Sweden...... 13,539 1.43 13,789 1.41 Guinea ...... 294 .03 544 .06 Syriar Arab Republic ...... 72 .01 322 .03 Guinea-Bissau...... 18 * 268 .03 Tanzaiia ...... 724 .08 974 .10 Guyana ...... 406 .04 656 .07 Thailand ...... 4,837 .51 5,087 .52 Haiti ...... 306 .03 556 .06 Togo ...... 720 .08 970 .10 Honduras ...... 184 .02 434 .04 Tonga 1...... 13 * 263 .03 Hungary ...... 4,253 .45 4,503 .46 TrinidadandTobago ...... 1,818 .19 2,068 .21 Iceland ...... 11 261 .03 Tunisia...... 1,576 .17 1,826 .19 India ...... 38,696 4.08 38,946 3.97 Turkev...... 5,985 .63 6,235 .64 Indonesia ...... 14,375 1.52 14,625 1.49 Uganda ...... 735 .08 985 .10 Iran, Islamic Republic of ..... 372 .04 622 .06 United Arab Emirates ...... 1,838 .19 2,088 .21 Iraq ...... 131 .01 381 .04 United Kingdom ...... 62,300 6.57 62,550 6.38 Ireland ...... 650 .07 900 .09 United States ...... 206,885 21.83 207,135 21.11 Israel...... 1,076 .11 1,326 .14 Uruguay ...... I ...... 1,797 .19 2,047 .21 Italy ...... 37,215 3.93 37,465 3.82 Vanuatu ...... 55 .01 305 .03 Jamaica ...... 1,893 .20 2,143 .22 Venezuela:...... 13,895 1.47 14,145 1.44 Japan ...... 49,954 5.27 50,204 5.12 VietlNam ...... 166 .02 416 .04 Jordan ...... 633 .07 883 .09 Western Samoa ...... 20 270 .03 Kenya ...... 1,529 .16 1,779 .18 YemenArab Republic ...... 272 .03 522 .05 Kiribati ...... 7 * 257 .03 Yugoslavia...... I .... 3,937 .42 4,187 .43 Korea, Republic of ...... 4,791 .51 5,041 .51 Zaire ...... 2,159 .23 2,409 .25 Kuwait...... 4,533 .48 4,783 .49 Zambia ...... 1,286 .14 1,536 .16 Lebanon ...... 50 .01 300 .03 Zimbabwe ...... 546 .06 796 .08 Lesotho...... 18 * 268 .03 TotalJune30,1989 $947,902 100.00t981,152 100.0ot

Total June30, 1988 $850,224 1 0.0t 883,474 100.00t

*Lessthan .005 percent. tMay differfrom thesum of the individualpercentages shown because of rounding. *FormerlyBurma.

55 InternationalFinance Corporation Notes to Financial Statements June 30, 1989 and June30, 1988 NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING AND RELATED POLICIES The accounting and reporting policies of the Corporation conform to generally accepted accounting principles in the United States and International Accounting Standards. The Corporation carries its assetsand liabilities principally on the historical cost basis and follows the accrual method of accounting except where noted otherwise. The significant accounting policies are summarized as follows: Financial StatementPresentation-Certain amounts in the prior year have been reclassifiedto conform to the current year's presentation. Translationof Currencies-All assets and liabilities not denominated in United States dollars, with the exception of equity investments, are expressed in United States dollars atthe approximate market rates prevailing at June 30, 1989 and 1988. Equity investments disbursed in currencies otherthan United States dollars are expressed in United States dollars at the exchange rates which applied at the time of disbursement. Translation gains and losses are credited or charged to income. Investments-Investments are recorded at the date investment commitments are signed by the Corporation and are reflected as assets when disbursed. Loan investmentsare generally reported as the principal amounts outstanding. Equity investments are carried at cost. Guarantees extended by the Corporation assuring payment of principal and interest on debt issuances on behalf of commercial enterprises and other exposures relating to various contractual arrangements are not reflected in the balance sheet until such time as the guarantee is called. Reserve Against Losses-The reserve against losses represents management's judgment as to identifiable losses on specific investments with a significant and relatively permanent decline in value and an estimate of potential losses not specifically provided for. The reserve is established through annual charges to income in the form of provision for losses on investments. Investmentswritten off, as well as any subsequent recoveries, are recorded through the reserve. Revenue Recognition-Dividends and profit participations are recorded as income when received in freely convertible currencies. Gains on sales of investments are measured against the average cost of the investmentssold and are credited to income when received in freely convertible currencies. Interest and commitment fees are recorded as income on an accrual basis. All other fees are recorded as income when received. The Corporation does not recognize income on loans where collectibility is in doubt and payments of interest and principal are past due more than sixty days unless management anticipatesthat collection will occur in the near future. Any interest which has been accrued on a loan placed in nonaccrual status is reversed out of the current income. Interest on nonaccrual loans is thereafter recognized as income only when actual payment is received. When interest not previously recognized is capitalized as part of a debt restructuring, such interest is recorded as deferred income and credited to current income only when the related principal maturity is received. Fees and costs associated with loan origination are recognized when incurred as the net of these amounts is not material. Deposits and Securities-Deposits and securities are recorded at cost or amortized cost. Gains and losses on sales of deposits and securities, measured by the difference between average cost and proceeds of the sales, are recorded as an element of income from deposits and securities.At June 30, 1989 and 1988, the cost of securities held approximated market value. Due to the nature of the deposits and securities held by the Corporation and its policies governing the level and use of such assets, the Corporation classifiesthe deposits and securities portfolio as an element of liquidity in the Statementof Cash Flows. Currency and Interest Rate Swaps-The Corporation enters into various currency and interest rate swap arrangements for its own asset/liability management. Associated income or expenses are recognized over the life of the swap agreement as a component of charges on borrowings.

NOTE B-CASH, DEPOSITS AND SECURITIES Cash, deposits and securities comprise the following: AtJune 30 ($ thousands) 1989 1988 Cash $ 17,099 $ 5,327 Time deposits and other obligations of banks and financial institutions 890,348 467,717 Government securities 405,957 805,158 Total cash, deposits and securities $1,313,404 $1,278,202

NOTE C-RECEIVABLES Receivablesof the Corporation are summarized below: At June30 ($thousands) 1989 1988 Receivable from sales of deposits and securities $ 123 $ 5,572 Accrued income on deposit and securities 14,460 6,841 Receivablefrom purchasers of loan and equity investments 24,249 17,256 Accrued income on loans 54,444 35,965 Total receivables $93,276 $65,634

56 Exhibit E

NOTE D-LOAN AND EQUITY INVESTMENTS AND RESERVE AGAINST LOSSES Investmentsapproved by the Board of Directors to be held by the Corporation but not signed as investment commitments, and commitments signed but on which disbursements have not yet commenced are as follows:

At June30 ($ thousands) 1989 1988 Investmentsapproved but not committed Loans $ 310,560 $ 523,110 Equities 82,900 42,890 $ 393,460 $ 566,000 Investmentscommitted but not disbursed Loans 1,151,891 974,182 Equities 100,038 111,741 1,251,929 1,085,923 Totalapproved but not disbursed $1,645,389 $1,651,923 At June 30,1989 the currency compositions of loans disbursed are as follows ($ ihousands): US Dollars $1,603,802 NetherlandsGuilders $13,538 Deutsche Mark 510,653 I uropean Currency Unit 12,071 Swiss Francs 111,110 Pounds Sterling 6,123 Japanese Yen 29,579 .JamaicanDollars 1,409 French Francs 31,983

Loans on which the accrual of interest has been discontinued amounted to $174.9 million at June 30,1989 ($208.6 million-1 988). Interest income not recognized in the current period on nonaccruing loans totaled $17.2 million ($21.7 million-1988). During the fiscal year ending June 30, 1989, the Corporation collected $11.5 million ($26.1 million-1 988) in interest on loans in nonaccrual status of which $3.5 million related to the current fiscal year and $8.0 million to prior fiscal years. The Corporation has also entered into commitments to issue guarantees totaling $118.3 million at June 30, 1989 ($96.7 million-1988) of which $83.6 million ($18.1 million-1 988) is outstanding. Changes in the Reserve Against Losses are summarized as follows: At June30 ($ thousands) 1989 1988 Balance at beginning of year $223,590 $197,799 Investmentswritten off (25,449) (17,640) Investments recovered 151 3,042 Provision charged to income 59,635 40,389 Balance at end of year $257,927 $223,590 NOTE E-PARTICIPATIONS The Corporation mobilizes funds from commercial banks and other financial institutions through loan participations. Participations are sold without recourse to the Corporation. The Corporation administers and services such loan participations on behalf of its participants. The Corporation called and disbursed $207.3 and $109.6 million of participants' funds during the fiscal years ended June 30, 1989 and 1988, respectively At June 30, 1989 and 1988 undisbursed participants' commitments were $183.3 and $197.1 million, respectively In addition the Corporation has arranged to place with participants $121.8 million of investments approved by the Board but not yet signed as commitments at June 30,1989 ($415.3 million-1988).

NOTE F-PAYABLES AND OTHER LIABILITIES Payables and other liabilitiesof the Corporation are summarized below: At June30 ($thousands) 1989 1988 Accounts payable and accrued expenses $26,407 $27,095 Payable for purchase of deposits and securities - 7,283 Accrued charges on borrowings 49,393 38,195 Other liabilities 3,453 1,517 Total payables and other liabilities $79,253 $74,090

57 InternationalFinance Corporation Notes to FinancialStatements continued June 30, 1989 and June 30, 1988 NOTE G-BORROWINGS The Corporation's borrowings outstanding from market sources and currency swaps are summarized below:

MarketBorrowings CurrencySwaps NetCurrency PrincipalAmount Weighted Payable(Receivable) Obligations ($ millions) AverageCost ($ millions) ($millions) June30 June30 June30 June30 1989 1988 1989 1989 1988 1989 1988 US Dollars $ 657 $ 655 8.630/o $690 $337 $1,347 $992 Deutsche Mark 148 159 6.520/o 48 41 196 200 Japanese Yen 148 123 5.500/% (148) (123) - - Pounds Sterling 63 69 9.130/o (63) (68) - 1 Swiss Francs 60 66 4.750/o (9) 3 51 69 European Currency Unit 58 63 6.630/o (58) (63) - - Australian Dollars 45 48 12.50%o (45) (48) - Netherlands Guilders 24 25 6.640/o (12) (13) 12 12 Spanish Pesetas 226 68 12.06% (226) (68) - - 0 Finnish Markkaa 57 - 9.63 /o (57) - Swedish Kroner 75 - 10.500/% (75) - - $1,561 $1,276 $ 45 $ (2) $1,606 $1,274

The weighted average cost of borrowings after currency swaps at June 30,1989 was 8.460/o. Principal and interest are payable in the currency borrowed. Under its borrowing agreements, the Corporation is not permitted to mortgage or allow a lien to be placed on its assets(other than purchase money security interests)without extending equivalent security to the holders of such borrowings. Under the currency swaps, proceeds of borrowings are converted into a different currency and, simultaneously,a forward exchange agreement is executed in order to recover the currency converted. Net payables on currency swaps of $45 million at June 30, 1989 result from exchange rate movements occurring subsequent to the dates of the swaps (net receivables of $2.0 million-1 988). The net receivable or payable will not be realized if the swaps are held to maturity. The Corporation has also entered into interest rate swap agreements with respect to notional principal amounts of $500 million ($500 million-1988) under which it is obligated to make interest payments on a variable rate basis, averaging 9.820/oat June 30, 1989, in exchange for fixed rate payments, averaging 8.720/oat June 30, 1989. As a result of these interest swap agreements and other currency swap agreements entered into by the Corporation, the charges on borrowings were reduced by $1.8 million ($6.4 million-1988). Borrowings outstanding from the International Bank for Reconstructionand Development (IBRD) are summarized below. No currency or interest rate swaps have been entered into with respect to these borrowings. Principal and interestare payable in the currency borrowed.

PrincipalAmount Weighted ($ millions) AverageCost June30 June30 1989 1988 1989 US Dollars $194 $293 8.080/% Deutsche Mark 311 294 8.050/% Swiss Francs 98 101 6.17% Japanese Yen 36 35 7.29% Other Currencies 56 48 9.78% $695 $771 In addition, undrawn balances on committed borrowings from the IBRD at June 30, 1989 and 1988 were $382.3 million and $478.7 million respectively A commitment fee is payable on the undrawn balances of the loans at rates from 2/5 to 3/4 of 1% per annum. For the fiscal year ended June 30,1989 such fees aggregated $2.5 million ($2.2 million-1988).

58 Exhibit E

Theprincipal amounts repayable on borrowingsoutstanding in all currenciesduring the fiscalyears ending June 30, 1990through June 30, 1994are as follows: ($millions) 1990 1991 1992 1993 1994 Thereafter Borrowingsfrommarket sources $ 0.8 $ 0.9 $ 1.0 $506.4 $317.4 $ 734.5 Borrowings from IBRD 75.3 75.0 78.0 81.0 108.0 277.7 $76.1 $75.9 $79.0 $587.4 $425.4 $1,012.2

NOTEH-CAPITAL STOCK On December26, 1985 the Board of Governorsapproved a resolutionincreasing the authorizedcapital to $1,300,000,000.The resolution,as amended,also allocated $650,000,000 for additionalsubscriptions by membersdut ing a subscriptionperiod ending August 1, 1991.Members may elect to pay subscriptionsin full or in installmentspayable not laterthan August 1, 1991or withinsix monthsthereafter. NOTEI-INTEREST ANDFINANCIAL FEES Interestand financial fees comprise the following: FiscalYears Ended June 30 ($thousands) 1989 1988 Interestincome $224,403 $200,467 Commitmentfees 10,468 8,040 Otherfinancial fees 9,486 8,542 Totalinterest and financial fees $244,357 $217,049

NOTEJ-CONTRIBUTIONS TO SPECIALPROGRAMS OnDecember 5, 1985the Boardof Directorsapproved a recommendation,modified on May21, 1986,under which the Corporationwill contributea totalof $2 millionto the AfricaProject Development Facility. As of June30, 1989ths Corporationhad contributed $1.5 million.The remainingamount of $500,000will bepaid duringthe fiscalyear ending June 30, 1990.In additionthe Boardhas authorized the Corporationto enterinto a joint programwith theMultilateral Investment Guarantee Agency to supportthe ForeignInvestment Adtisory Service(FIAS) activity. The Corporation's contribution to FIASin thefiscal year ended June 30, 1989was $400,000. A furthercontribution of $400,000will bemade in thefiscal year ending June 30, 1990.

NOTEK-OTHER MATTERS StaffRetirement Plan-The InternationalBank for Reconstructionand Development (IBRD) has a definedbenefit retirement plan covering substantially all of the staffof the Corporation,the IBRDand the MultilateralInvestment Guarartee Agency (MIGA). Under the Plan, benefitsare basedon yearsof serviceand average compensation, with the staffcontributing a fixedpercentage of pensionableremuneration, and the Corporation,IBRD and MIGA contributingthe remainderof the actuariallydeterrnined cost of futurePlan benefits. The total contribution is basedupon the aggregatefunding method. All contributionsto the Planand all other assetsand incomeheld for purposesof the Planare held separatelyfrom the otherassets and incomeof the Corporation,IBRD and MIGA and can beused only for the benefitof theparticipants in the Planand their beneficiaries,until all liabilitiesto themhave been paidor providedfor. The total expense allocated to the Corporationfor thefiscal yea' endedJune 30, 1989was $4,355,396 ($4,864,943-1988). Serviceand SupportPayments-The Corporation obtains some administrative and overheadservices from the InternationalBank for Reconstruction and Development(IBRD) in thoseareas where commonservices can be efficiertlyprovided by IBRD.This includesshared costsof the Boardsof Governorsand Directors,and other servicessuch as internalauditing, administratve support, office occupancy supplies and insurance.Payments for theseservices are made by IFCto IBRDbased on negotiatedfees, direct chargeback and allocatedcharges where chargeback is not feasible.Total of suchexpenses for the fiscalyear ended June 30, 1989amounted to $10.8million ($10.2 million-i 988).

59 Financial StatementsCovered by the Report of IndependentAccountants Foregoing Report

BalanceSheet Statementof Income Statementof CashFlows Statementof CapitalStock Ah band Voting Power Price Waterhouse 0 Notes to FinancialStatements July26, 1989

Presidentand Boardof Governors InternationalFinance Corporation

In our opinion,the financialstatements appearing on pages52 through 59 of this reportpresent fairly, in all materialrespects, in terms of UnitedStates dollars, the financialposition of the InternationalFinance Corporation at June 30, 1989and 1988,and the resultsof its operationsand its cashflows for the yearsthen ended in conformitywith generallyaccepted accounting principles in the UnitedStates and InternationalAccounting Standards.These financial statements are the responsibilityof managementof the InternationalFinance Corporation;our responsibilityis to expressan opinionon thesefinancial statements based on our audits.We conductedour auditsof thesestatements in accordance with generallyaccepted auditing standards which require that we plan and performthe auditto obtainreasonable assuranceabout whether the financialstatements are free of materialmisstatement. An auditincludes examining, on a testbasis, evidence supporting the amountsand disclosuresin the financialstatements, assessing the accountingprinciples used and significantestimates made by management,and evaluatingthe overallfinancial statementpresentation. We believethat our auditsprovide a reasonablebasis for the opinionexpressed above.

Washington,D.C.

60 APPENDICES

Governorsand Alternates 62

Directorsand Alternates and Their VotingPower 64

BankingAdvisory Panel and BusinessAdvisory Council 65

TheYear's Approvals 66

InvestmentPortfolio 76

Statementof Cumulative GrossCommitments 89

IFCManagement 90

61 Governorsand Alternates As of June 30, 1989

Member Governor Alternate

Afghanistan ...... Hamidullah Tarzi ...... Zalmai Ahmadi Antigua and Barbuda ...... John E. St. Luce ...... Ludolph Brown Argentina ...... Jesus Rodrrguez ...... Enrique Garcia Vazquez Australia ...... PJ. Keating...... Bob Dun Austria ...... Ferdinand Lacina ...... Othmar Haushofer Bahamas,The ...... Sir Lynden 0. Pindling ...... Ethelyn C. Isaacs Bangladesh ...... A.K. Khandker ...... Enam Ahmed Chaudhury Barbados ...... L. Erskine Sandiford ...... Winston A. Cox Belgium ...... Philippe Maystadt ...... Jean Godeaux Belize ...... Dean Barrow ...... Yvonne S. Hyde Benin ...... Simon Ifede Ogouma ...... Saliou Aboudou Bolivia ...... Fernando Romero ...... Jacques Trigo Botswana ...... PS. Mmusi ...... Baledzi Gaolathe Brazil ...... Mailson Ferreira da Nobrega ...... Elmo de Araujo Camoes Burkina Faso ...... PascalZagre ...... Henri Bruno Bessin Burundi ...... Gerard Niyibigira ...... Salvator Nkeshimana Cameroon ...... Elizabeth Tankeu ...... Simon Ngann Yonn Canada ...... Michael H. Wilson ...... Margaret Catley-Carlson Chile ...... Enrique Seguel Morel ...... Pablo Ihnen de la Fuente China ...... Wang Bingqian ...... Chi Haibin Colombia ...... Luis F.Alarc6n-Mantilla ...... Francisco J. Ortega Congo, People's Rep. of the ...... Dieudonne Diabatantou ...... Andre Batanga Costa Rica ...... Fernando E. Naranjo ...... Eduardo Lizano Fait Cote d'lvoire ...... Abdoulaye Kone ...... L6on Naka Cyprus ...... George Syrimis ...... Michael Erotokritos Denmark ...... Uffe Ellemann-Jensen ...... Ole Loensmann Poulsen Djibouti ...... Mohamed Djama Elabe ...... Ahmed Samireh Omar Dominica ...... _...... Mary Eugenia Charles.. Alick B. Lazare Dominican Republic ...... Roberto B. Saladin Selin ...... Manuel E. G6mez Pieterz Ecuador ...... Jorge Gallardo Zavala ...... Edison Ortiz Duran Egypt, Arab Republic of ...... Kamal El-Ganzoury ...... Maurice Makram-Allah El Salvador...... Remo Bardi Cevallos ...... Mauricio Antonio Gallardo Ethiopia ...... Wollie Chekol ...... Seyoum Alemayehu Fiji ...... J.N. Kamikamica ...... Rigamoto Taito Finland ...... Erkki Liikanen ...... Osmo Sarmavuori France ...... Jacques de Larosiere ...... Jean-Claude Trichet Gabon ...... Pascal Nze ...... Jean-Felix Mamalepot Gambia, The ...... Saihou S. Sabally ...... Mamour M. Jagne Germany Fed. Rep. of ...... Juergen Warnke ...... Hans Tietmeyer Ghana ...... Kwesi Botchwey ...... Kwesi Bekoe Amissah-Arthur Greece ...... PanagiotisRoumeliotis ...... Yannis Papantoniou Grenada ...... Herbert Augustus Blaize ...... Lauriston F.Wilson, Jr. Guatemala ...... Rodolfo PaizAndrade ...... Oscar Pineda Robles Guinea ...... Edouard Benjamin ...... KerfallaYansane Guinea-Bissau ...... Pedro A. Godinho Gomes ...... Jose Lima Barber Guyana ...... Carl Greenidge ...... Winston Murray Haiti ...... Leonce F Thelusma ...... Jacques Vilgrain Honduras ...... Carlos Falck Contreras ...... Gonzalo Carfas Pineda Hungary...... Imre Tarafas...... Tibor Melega Iceland ...... Jon Sigurdsson ...... Olafur R. Grimsson India ...... S.B. Chavan ...... G.K. Arora Indonesia ...... J.B. Sumarlin ...... Hasudungan Tampubolon Iran, Islamic Rep. of ...... Mohammad Javad Iravani ...... Ali Majedi Iraq ...... Hikmat Omar Al-Hadithi ...... Subhi Frankool Ireland ...... Albert Reynolds ...... Sean P Cromien Israel ...... Michael Bruno ...... Yaacov Lifshitz Italy ...... Carlo Azeglio Ciampi ...... Mario Sarcinelli Jamaica ...... Seymour Mullings ...... Harold W. Milner Japan ...... Tatsuo Murayama ...... Satoshi Sumita Jordan ...... Taher H. Kanaan ...... Mohammad H. Al-Saqqaf Kenya ...... George Saitoti ...... Charles S. Mbindyo Kiribati ...... Teatao Teannaki ...... Baraniko Baaro Korea, Republic of ...... Kyu Sung Lee ...... Kun Kim Kuwait ...... Jassim Mohamed Al-Kharafi ...... Bader Meshari Al-Humaidhi Lebanon ...... Habib Abou-Sakr ...... Raja Himadeh Lesotho ...... Michael M. Sefali ...... Tom Liphapang Tuoane Liberia ...... Elijah E. Taylor ...... G. Pewu Subah Libya ...... Mohamed El Madni Al-Bukhari ...... Bashir Ali Khallat Luxembourg ...... Jacques Santer ...... Raymond Kirsch

62 Appendix A

Member Governor Alternate

Madagascar...... PascalRakotomavo ...... JeanRobiarivony Malawi ...... L. Chimango...... C.D. Nthenda Malaysia...... DaimZainuddin ...... ZainAzraai Maldives ...... FathullaJameel ...... KhadeejaHassan Mali ...... AnthioumaneN'Diaye ...... OumarKassongue Mauritania...... MohamedOuld Nany ...... MohamedouOuld Michel Mauritius ...... BeergoonathGhurburrun ...... MadhukarlallBaguant Mexico...... PedroAspe .J...... Jos AngelGurrFa Morocco ...... MohamedBerrada ...... MustaphaFaris Mozambique...... AbdulMagid Osman ...... Eneasda ConceicaoComiche Myanmarl ...... D.O.Abel ...... MinAung Nepal ...... BharatBahadur Pradhan ...... Lok BahadurShrestha Netherlands...... H.O.Ruding ...... P Bukman New Zealand...... GrahamC. Scott ...... ChrisN. Pinfield Nicaragua...... JoaqufnCuadra Chamorro ...... PedroAntonio Bland6n Lanzas Niger ...... YahayaTounkara ...... Ali Sabo Nigeria...... ChuS.P Okongwu ...... AliyuMohammed Norway ...... GunnarBerge ...... ArneArnesen Oman...... QaisAbdul-Munim Al-Zawawi ...... MohammedBin Musa Al Yousef Pakistan...... VA. Jafarey...... l..zharul Haque Panama...... GustavoR. GonzalezJ...... OrvilleK. Goodin PapuaNew Guinea ...... PaulPora ...... MoreaVele Paraguay...... EnzoDebernardi ...... OscarJacinto Obelar Peru...... CesarVasquez Bazan ...... PedroCoronado Lab6 Philippines...... VicenteR. Jayme...... SolitaC. Monsod Poland...... ZdzislawPakula ...... GrzegorzWojtowicz Portugal...... MiguelCadilhe ...... (Vacant) Rwanda...... BenoitNtigulirwa ...... EmmanuelNdahimana St.Lucia ...... John G.M.Compton ...... DwightVenner SaudiArabia ...... MohammadAbalkhail ...... HamadAl-Sayari Senegal...... DjiboLaity Ka ...... YoussoufDiop Seychelles...... Daniellede St.Jorre ...... BertrandRassool SierraLeone ...... HassanG. Kanu ...... A.M. Doherty Singapore ...... RichardHu TsuTau ...... LeeEk Tieng SolomonIslands ...... ChristopherC. Abe ...... LeonardPalmer Maenu'u Somalia ...... MohamedSheikh Osman ...... AbdulkadirAden Mohamud SouthAfrica ...... G.PC. de Kock ...... J.A. Lombard Spain...... CarlosSolchaga ...... MarianoRubio Jimenez Sri Lanka ...... D.B.Wijetunge ...... R. Paskaralingam Sudan ...... OmerNour Eldaim ...... ElSayid All Zaki Swaziland...... AndreasFakudze ...... NoreenN. Maphalala Sweden...... Kjell-OlofFeldt ...... LenaHjelm-Wallen SyrianArab Republic ...... MohammedKhaled Mahayni ...... MarwanKodsi Tanzania...... CleopaD. Msuya ...... SimonMbilinyi Thailand...... PramualSabhavasu ...... PanasSimasathien Togo...... BarryMoussa Barque ...... KwassiKlutse Tonga...... JamesCecil Cocker ...... SelwynPercy Jones Trinidadand Tobago ...... SelbyWilson ...... WilliamDemas Tunisia...... MohamedGhannouchi ...... ZeinMestiri Turkey ...... NamikKemal Kilic ...... MahfiEgilmez Uganda ...... JoshuaMayanja Nkangi ...... SuleimanKiggundu UnitedArab Emirates ...... Hamdanbin Rashid Al Maktoum...... AhmedHumaid Al-Tayer UnitedKingdom ...... RobinLeigh-Pemberton ...... JohnCaines 2 UnitedStates ...... NicholasF Brady...... RichardT McCormack Uruguay...... RicardoZerbino Cavajani ...... ArielDavrieux Vanuatu...... SelaMolisa ...... GeorgePakoa Venezuela...... MiguelRodriguez ...... EduardoQuintero VietNam ...... CaoSi Kiem ...... (Vacant) WesternSamoa ...... TuilaepaS. Malielegaoi...... KoloneVa'ai YemenArab Republic ...... MohammedSaeed Al-Attar ...... KaidMohammed Al-Hirwi Yugoslavia...... BranimirZekan ...... BorisSkapin Zaire ...... KatangaMukumadi ya Mutumba ...... MbongaMagalu Engwanda Zambia ...... GibsonG. Chigaga...... LeonardNkhata Zimbabwe...... B.TG.Chidzero ...... K.J. Moyana 1. FormerlyBurma. 2. To besucceeded, effective July 1, 1989,by TimothyLankester.

63 Directors and Alternates and Their Voting Power Appendix B June30, 1989

Director Alternate CastingVotes of TotalVotes % of Total

Appointed E. PatrickCoady ...... Mark T Cox, IV ...... United States ...... I...... 207,135 21.29 GerhardBoehmer ...... Michael von Harpe ...... FederalRepublic of Germany ...... 65,179 6.70 Frank Cassell ...... J.A.L. Faint ...... United Kingdom ...... 62,550 6.43 HelenePloix ...... StephanePallez ...... France ...... 57,991 5.96 MasakiShiratori ...... YukioYoshimura ...... Japan ...... 50,204 5.16 Elected Mario Draghi ...... Rodrigo M. Guimaraes ...... Greece, Italy,Poland, Portugal ...... 49,550 5.09 (Italy) (Portugal) C.R. KrishnaswamyRao Sahib .... M. MustafizurRahman ...... Bangladesh,India, Sri Lanka ...... 47,592 4.89 (India) (Bangladesh) Frank Potter ...... ClarenceEllis ...... Antiguaand Barbuda, The Bahamas, (Canada) (Guyana) Barbados, Belize,Canada, Dominica, Grenada,Guyana, Ireland, Jamaica, St. Lucia ...... 47,245 4.86 Jacques de Groote ...... BaharSahin ...... Austria, Belgium,Hungary Luxembourg, (Belgium) (Turkey) Turkey ...... 47,211 4.85 Jonas H. Haralz ...... VeikkoKantola ...... Denmark,Finland, Iceland, Norway, (Iceland) (Finland) Sweden...... 40,919 4.21 Jorge Pinto ...... FranciscoVannini 1 ...... Costa Rica, ElSalvador, Guatemala, (Mexico) (Nicaragua) Honduras, Mexico, Nicaragua, Panama, Spain, Venezuela ...... 39,956 4.11 PaulArlman ...... Cvitan Dujmovic ...... Cyprus, Israel, Netherlands,Yugoslavia ... 35,363 3.64 (Netherlands) (Yugoslavia) Eduardo Wiesner...... PedroSampaio Malan ...... Brazil,Colombia, DominicanRepublic, (Colombia) (Brazil) Ecuador,Haiti, Philippines,Trinidad and Tobago ...... 33,156 3.41 Chang-YuelLim ...... Robert G. Carling ...... Australia,Kiribati, Korea (Republic of), New (Republic of Korea) (Australia) Zealand, PapuaNew Guinea,Solomon Islands, Vanuatu,Western Samoa ...... 32,804 3.37 Mohd. RamliWajib ...... Le Van Chau ...... Fiji, Indonesia,Malaysia, Myanmar 2, Nepal, (Malaysia) (Viet Nam) Singapore,Thailand, Tonga,Viet Nam ... . 30,566 3.14 Raymundo Morales ...... FelixAlberto Camarasa ...... Argentina, Bolivia, Chile, Paraguay Peru, (Peru) (Argentina) Uruguay ...... 29,942 3.08 Fawzi Hamad Al-Sultan ...... Mohamed W. Hosny ...... Egypt (Arab Republicof), Iraq, Jordan, (Kuwait) (Arab Republicof Egypt) Kuwait, Lebanon, Maldives,Oman, Pakistan,Syrian Arab Republic, United Arab Emirates,Yemen Arab Republic ..... 25,619 2.63 J.S.A. Funna ...... Jabez A. Langley ...... Botswana,Burundi, Ethiopia,The Gambia, (Sierra Leone) (The Gambia) Guinea,Kenya, Lesotho, Liberia, Malawi, Mozambique,Nigeria, Seychelles,Sierra Leone, Sudan, Swaziland,Tanzania, Uganda, Zambia, Zimbabwe ...... 22,745 2.34 Jobarah E. Suraisry...... AbdulazizAl-Sehail ...... Saudi Arabia ...... 14,697 1.51 (SaudiArabia) (SaudiArabia) Andre Milongo ...... Jean-PierreLe Bouder ...... Benin, BurkinaFaso, Cameroon, Congo (People'sRepublic of the Congo) (CentralAfrican Republic) (People'sRepublic of the), Cote d'lvoire, Djibouti, Gabon, Guinea-Bissau, Madagascar,Mali, Mauritania,Mauritius, Niger, Rwanda,Senegal, Somalia, Togo, Zaire ...... 13,590 1.40 Mourad Benachenhou...... Salem MohamedOmeish ...... Afghanistan,Ghana, Iran (IslamicRepublic (Algeria) (Libya) of), Libya, Morocco, Tunisia ...... 10,408 1.07 Zhang Junyi ...... Jin Liqun ..... China ...... 8,372 0.86 (China) (China) In additionto the Directorsshown in the foregoinglist, the followingalso served after October31, 1988:

Director Endof periodof service:

MitsukazuIshikawa ...... June 7, 1989 (Japan) RobertB. Keating...... May 18, 1989 (United States) Murray A. Sherwin ...... May 31,1989 (NewZealand) Note: SouthAfrica (8,358 votes) did not participatein the 1988Regular Election of ExecutiveDirectors. 1. Tobe succeededby EdgarAyales (Costa Rica), effective July 1, 1989. 2. FormerlyBurma.

64 The Banking Advisoiy Panel Appendix C IFC's BankingAdvisory Panel meets regularlywith the Corporation'smanagement to discussIFC's activitiesand policies.The Corporation wishesto expressits appreciationfor the valuableadvice the panel members have given.

Abdiatify Al-Hamad Director General Yusuka Kashiwagi Chairman Arab Fundfor Economicand Social The Bank of Tokyo,Ltd. Development Tokyo,Japan Kuwait Dr. Cc nradOort' Memberof the ManagingBoard Jan Ekman Vice Chairman AlgemeneBank Nederland SvenskaHandelsbanken Amsterdam,Netherlands Stockholm,Sweden Lord Rollof lpsden Chairman Dr.Wilfried Guth Chairmanof the SupervisoryBoard S.G.Warburg and Co. Ltd. DeutscheBank A.G. London, England Frankfurt,Federal Republic of RobeitV. Roosa Partner Germany Brown BrothersHarriman and Co. Jean-YvesHaberer President New York,N. Y, UnitedStates Credit Lyonnais Anthcny Solomon Chairman Paris,France S.G.Warburg (USA)Inc. New York, N. Y, UnitedStates

*Dr. Oortresigned from the Paneleffective June 12, 1989. The Business Advisory Council

The BusinessAdvisory Council, which advises IFC's managementon the needsand views of business and industryin connectionwith the Corporation'sactivities, held its Annual Meetingin May 1989.

S. BabarAli Adviser CarloPatrucco Vice President PackagesLimited Confindustria Lahore,Pakistan Rome,Italy ThomasJ. Bata Chairmanof the Board Jose Pinera ExecutiveChairman Bata Limited Asset-ChileLtd. Don Mills.Ontario, Canada Santiago,Chile Sir MichaelCaine Chairman Ronc Yiren Chairman Bookerplc China InternationalTrust and London, England InvestmentCorporation Suck-RaiCho Chairman Beijing,China HyosungGroup Antoiio Ruiz Galindo,Jr. FormerlyChairman of DESC Seoul,Republic of Korea Sociedadde FomentoIndustrial MustaphaFaris PresidentDirector General Mexico D.F.Mexico Banque Nationalepour le IsmailSabry President DeveloppementEconomique SocieteEgypto-Francaise pour les Rabat,Morocco IndustriesAgro-Alimentaires Javierl. Gamboa Chairman Cairo, Egypt AlpargatasS.A.I.C IbrahimA. Salamah Vice Chairmanand Chief Executive BuenosAires, Argentina Officer Dr.Carl H. Hahn Chairman,Board of Management Saudi Basic IndustriesCorporation VolkswagenA.G. Riyadh,Saudi Arabia Wolfsburg,Federal Republic of JankoSmole FormerFederal Minister of Finance Germany Belgrade,Yugoslavia OlororunMichael C.O. lbru, OFR Chief Executive PaulSoppo Priso DirectorGeneral lbru Group Soppo Priso Lagos,Nigeria Douala,Cameroon W SidneyKnox Chairmanand ChiefExecutive JuliLs Tahija Chairman,Board of Commissioners Neal& MassyHoldings Limited P T Caltex PacificIndonesia Portof Spain, Trinidad Jakarta, Indonesia RahmiM. Koc Chairman, Boardof Directors Tostio Takeuchi SeniorAdviser Kog HoldingA.S. ToyoMenka Kaisha, Ltd. Istanbul,Turkey Tokyo,Japan KeshubMahindra Chairman Jean-LouisVilgrain President Mahindra& MahindraLimited Grands Moulinsde Paris Bombay,India Paris,France EugenioA. Mendoza Presidentof the Corporate PauloD. Villares Chairmanof the Board and ManagementCommittee of the President Mendoza Enterprises IndustriasVillares S.A. Caracas,Venezuela SaoPaulo, Brazil TarrinNimmanahaeminda Presidentand ChiefExecutive Joseph B. Wanjui Chairman Officer EastAfrica IndustriesLtd. SiamCommercial Bank, Ltd. Nairobi,Kenya Bangkok,Thailand Jairie Zobel de Ayala Presidentand Chairmanof the DanielParker Formerlyof ParkerPens Inc. Board of Directors Charleston,South Carolina, United AyalaCorporation States Makati, Metro Manila Philippines

65 The Year's Approvals

InvestmentsApproved IFC's Project inFiscal Year 1989 Investment Cost (US$millions)'

Argentina

ArgentineInvestment Company S.A. (A/C) will makedirect investments in newequity and Loan quasi-equityissues of privateArgentine enterprises, through the conversionof eligible Equity 2.10 Argentinesovereign debt, with a viewto long-termcapital appreciation. AIC will beman- Quasi-equity - agedby CompaniaGeneral de InversionesS.A., a companyin whichIFC has also Syndications - invested. Total 2.10 34.40

BancoFrances del Rio de/a PlataS.A. (Banco Frances) will provide term financing to Loan 15.00 medium-sizeenterprises through an IFC line of credit. Equity - Quasi-equity Syndications - Total 15.00 30.00 IFChas approved a lineof creditand an equityunderwriting facility which will beman- Loan 10.00 agedby BancoGeneral de NegociosS.A., * to helpmedium-size Argentine businesses Equity - seekingfinance for capitalinvestment projects. Quasi-equity Syndications - Total 10.00 20.00 BancoRoberts S.A. * will managean agencyline of creditand an equity underwriting line Loan 10.00 providedby IFCto financemedium-size Argentine businesses and to supportnew equity Equity - issuesin the Argentinestock market. Quasi-equity Syndications - Total 10.00 20.00

TheChihuidos Oil ExplorationProgram consists of seismicacquisition and the drillingof Loan - twowells in the Neuquenbasin, a well-knownoil-producing province. Provision has been Equity 4.95 madefor twoappraisal wells inthe eventof success.Trend International is theoperator; Quasi-equity - the otherpartners are independent U.S. oil companiesand a localArgentine company Syndications - IFCholds a 15 percentinterest in the venture. Total 4.95 32.40

CompahltaArgentina de PetroleoS.A. (Astra)* has a three-yearinvestment program con- Loan 20.00 sistingof oil fielddevelopment, modernization and expansion of engineeringservices Equity - and petrochemicals,and distribution and retailing of relateddownstream products. Quasi-equity 5.00 Syndications - Total 25.00 97.00 ComparliasAsociadas Petroleras S.A. (CAPSA) will increase oil productionthrough pri- Loan 6.00 marydrilling, secondary recovery well repairs, and electrification of facilities. Equity - Quasi-equity 3.00 Syndications - Total 9.00 31.00 Terminal6 S.A.* willexpand its port storagecapacity and unloadingarea, allowing it to Loan 3.00 increasethroughput by morethan 50 percent. Equity - Quasi-equity Syndications Total 3.00 10.90

Bolivia CompaniaMinera del Sur S.A. (Comsur) will modernize its facilities,develop additional Loan 7.00 orereserves, expand its mineralprocessing capacity, and explore for mineralresources Equity 3.00 injoint ventures with other companies. Quasi-equity - Syndications - Total 10.00 26.10

Brazil AdiboardS.A. will buildand operatea greenfieldplant to manufacture120,000 square Loan 5.00 metersper year of printedcircuit boards for the electronicsindustry About 60 percentof Equity - the outputwill besold as componentsof autoradios for export. Quasi-equity 2.50 Syndications - Total 7.50 31.90

66 Appendix D

InvestmentsApproved IFC's Project inFiscal Year 1989 Investment Cost (US$millions)'

AracruzCelulose S.A. (Aracruz) will expandits existingcapacity for manufactureoi Loan 20.00 bleachedeucalyptus pulp from 495,000 to 1,020,000tpy Theproject includes the instal- Equity - lationof a plantthat will manufacturechemicals used in the processand the purchaseof Quasi-equity generatorsets enabling the companyto produceits ownpower Syndications - Total 20.00 1,024.00

ElumaS.A. Industria e Comercio(Eluma) will rationalizeand modernize its two production Loan 10.00 facilities. Equity - Quasi-equity 5.00 Syndications - Total 15.00 79.80

Papele CeluloseCatarinense S.A. (PCC) will expandits long-fiberpulp and paper mill Loan 15.00 from 85,200tpy to 182,000tpy Itwill alsoredeploy some of its machinesand change the Equity - bleachingsystem to relievethe existing overload on millcapacity Quasi-equity Syndications - Total 15.00 173.00

Petroquimicado NordesteS.A. (Copene) will almostdouble its ethylene capacity and Loan 45.00 increaseits productioncapacity for all basicpetrochemical products. The project Equity - includesa methyltertiary butyl ether plant, the expansionof a utilitiesplant for dovin- Quasi-equity - streamindustries, and a 600-kmethylene pipeline linking the projectto a chloro- Syndications 20.00 chemicalscomplex in a neighboringstate. Total 65.00 810.80

PolitenoLinear S.A. (Politeno) will construct and operate a plantto manufacture130,000 Loan 18.50 tpy of linearlow-density polyethylene and high-densitypolyethylene. Equity 6.50 Quasi-equity - Syndications - Total 25.00 139.00

Chile CelulosaArauco y Constituci6nS.A. (Arauco)* will constructa new1 000-mtpd pU Ip line Loan 40.00 to produce350,000 mtpy of fullybleached softwood kraft pulp for export. Equity - Quasi-equity 15.00 Syndications 55.00 Total 110.00 600.00 Celulosadel Pacifico S.A. (CELPAC) will construct a new900-mtpd pulp mill to produce Loan 40.00 315,000mtpy of fullybleached softwood kraft pulp for theexport market. Equity 10.00 Quasi-equity - Syndications 50.00 Total 100.00 587.00

InternationalInvestment Company of Chile,the second debt-equity conversion ft nd Loan - establishedunder Chapter XIX, Annex II of the nationaldebt conversion program, is Equity 7.26 managedby the InvestmentManagement Company of Chile,which IFC also helped Quasi-equity - establish.The Fund will invest the proceedsfrom the conversionsin listedChileart Syndications - securities. Total 7.26 30.00

MineraEscondida Limitada (Escondida) will develop a largeopen-pit mine and support Loan 70.00 facilitiesto produceand export 334,000 mtpy of copperin concentrates. Equity 15.00 Quasi-equity - Syndications - Total 85.00 1,143.20 China Shenzhen-ChronarSolar Energy Co., Ltd. willestablish a plantin Shenzhen,Chira to Loan 2.00 manufacture1.2 megawattsor 300,000sq.ft. per year of amorphoussilicon photovoltaic Equity 1.00 panels(solar energy devices), principally for export.IFC is a 20 percentshareholder in Quasi-equity - thisproject, which will transfera newtechnology to China. Syndications - Total 3.00 10.20

67 The Year's Approvals continued

InvestmentsApproved IFC's Project inFiscal Year 1989 Investrment Cost (US$millions)'

Colombia IFC'sloan to FrigorificosColombianos, S.A. * hasbeen restructured and IFChas pro- Loan videdthe companywith an additional equity investment of $183,300to saveit from invol- Equity 0.18 untaryreorganization and bankruptcy Quasi-equity - Syndications - Total 0.18 0.18

2 LeasingBolivar S.A. * madea newoffer of sharesin which IFC subscribed its pre- Loan - emptiverights. Equity 0.03 Quasi-equity - Syndications - Total 0.03 0.03

Promotorade /a/nterconexi6n de los Gasoductos de/a CostaAt/antica S.A. (Promigas)* Loan 10.00 isa successfulgas transporter in northern Colombia. It is expandingits pipelinenetwork Equity - by buildinga seriesof small(2"-1 0") pipelinesto makegas availableto a numberof Quasi-equity townsin the northernand northwestern provinces. In additionto IFC'sloan, the Andean Syndications - DevelopmentCorporation is consideringa loanof $9.5million. Total 10.00 34.70

Dominica IFChas approved an equity investment of $600,000to helpfinance the construction of Loan theFort Young Hotel, a $3.64million, 53-room hotel. Equity 0.60 Quasi-equity - Syndications = Total 0.60 3.64

Ethiopia TheRed Sea Oil ExplorationProgram consists of seismicreprocessing and acquisition, Loan oneexploratory well, and, inthe eventof success,two additional wells. BP Petroleum, EquLity 7.80 whichholds 75 percentof this project,is the operator.IFC holds 25 percent. Quasi-equity - Syndications - Total 7.80 31.00

Gabon IFCapproved a loanto ElfGabon and structured the financialplan for a jointventure by Loan 10.00 ElfGabon, Shell Gabon (see below), S.N. ElfAquitaine, and the Governmentof Gabonto Equity - developthe Rabi-Koungaoil field. Quasi-equity Syndications - Total 10.00 352.00

IFCapproved a subordinatedloan and arrangeda syndicatedloan to ShellGabon and Loan structuredthe financialplan for a jointventure by ShellGabon, Elf Gabon (see above), Equity - S.N.Elf Aquitaine, and the Governmentof Gabonto developthe Rabi-Koungaoil field. Quasi-equity 50.00 Syndications 110.00 Total 160.00 395.00

Ghana CanadianBogosu Resources Limited* will develop the Bogosugold mineto increase Loans 14.00 goldsales to 100,000ounces per yearby 1991.IFC approved two equityinvestments in Equity 1.10 theproject as well asshareholder's advances, and arranged a financingpackage for the Quasi-equity 3.75 productionphase. Syndications 29.00 Guarantee 0.75 Total 48.60 92.00 ContinentalAcceptancesLimited, a newmerchant banking firm, was established by IFC Loan incooperation with Vanguard Assurance of Ghanaand two African merchant banks to Equity 0.98 meetthe strongdemand in Ghanafor specializedprofessional financial services. Quasi-equity - Syndications - Total 0.98 3.51

68 Appendix D

InvestmentsApproved IFC's Project inFiscal Year 1989 Investment Cost (US$millions)'

WahomeSteel Ltd. willestablish a steelplant in Temafor the productionof reinforcement Loan 2.70 bars,wire rods, wire, andother steel products. Equity - Quasi-equity 0.50 Syndications - Total 3.20 8.30

Hungary Withtechnical assistance from WildenKG of the FederalRepublic of Germany,Parnnon- Loan 2.54 plastwill use advanced computer-aided design and manufacturing technology to pro- Equity 0.82 ducehigh-quality molds for the plasticsprocessing industry Quasi-equity - Syndications - Total 3.37 11.84

2 IFCexercised its pre-emptiverights in SalgotarjanGlass Wool Ltd. * to maintainth 3 same Loan - levelof ownershipin thecompany in responseto higher-than-anticipatedproject irnple- Equity 0.14 mentationcosts. Quasi-equity - Syndications - Total 0.14 0.98

Tetrapak,in ajoint venturewith the NationalSavings Bank of Hungary,will builda pack- Loan 6.23 agingmaterial plant with a nominalcapacity of 500million one-liter cartons for improving Equity 2.66 the packagingof milkand fruitjuices for the domesticmarket. Quasi-equity - Syndications - Total 8.89 48.00

India AhmedabadElectricity Company Ltd. will expandits generatingcapacity to 410 MWby Loan 19.46 installinga new100-MW gas-based combined-cycle unit. The new unit will improvethe Equity - reliabilityand efficiencyof powersupply to commercialand industrialusers in Ahrmeda- Quasi-equity badand Ghandinagar. Syndications - Total 19.46 83.30

DeepakFertilisers and Petrochemicals Corporation Limited* asked I FC to exerciseits Loan - pre-emptiverights in a convertibledebenture issue of $40 million.IFC presently h lds Equity 2.80 1.15million equity shares, which is equivalentto approximately7.8 percentof the com- Quasi-equity - pany'sequity share capital. Syndications - Total 2.80 40.00 GujaratState Fertilisers Company Ltd., currentlyIndia's sole producer of caprolactam, Loan 27.05 the principalintermediate used in themanufacture of Nylon6, willexpand its cap olac- Equity - tamcapacity of 25,000mtpy by establishinga new50,000-mtpy facility The facili :y will Quasi-equity alsoproduce 116,000 mtpy of thefertilizer ammonium sulphate. Syndications - Total 27.05 280.00

JM Shareand StockbrokersPrivate Limited (JSB) is India'sfirst nationwidestockbroker- Loan - agefirm. Becauseof undercapitalization,Indian stockbrokers have been unable to Equity 0.55 establishthe infrastructuresystems needed to serveclients in India's15 regionalstock Quasi-equity - exchanges.In cooperation with J.M. Financialand Consultancy Services Pvt. Ltc. Invest- Syndications - ment,IFC has capitalized JSB, which will be headquarteredin Bombay,for thispurpose. Total 0.55 3.90 Asa retailsecurities institution able to providesecurities distribution, underwritinc, market-making,and portfolio management services throughout India, JSB will at emptto attractsemi-urban communities to the capitalmarkets. TataElectric Companies Ltd. will installoverhead lines, underground cables, switch Loan 35.46 gears,and transformers at threeswitching stations, which will augment the capacityof Equity - transmissionlines and substationsenabling them to distributeadditional power more effi- Quasi-equity ciently,reduce transmission losses, and enhance the quality and reliability of supplyto Syndications - the cityand suburbs of Bombay. Total 35.46 79.70

TheTata Iron and Steel Company Limited* will modernize its ironmakingfacilities by Loan 17.81 installinga one-million-mtpyblast furnace. The furnace will resultin higher-qualitvhot Equity - metal,lower production costs, increased hot metaloutput, and additional revenL es from Quasi-equity 21.29 scrapsavings and sale of castpig iron. Syndications - Total 39.11 122.00

69 The Year's Appmvals cononued

InvestmrentsApproved IFC's Project in FiscalYear 1989 Investment Cost (US$millions)'

India(continued)

UCALFuel Systems Ltd., ajoint venturebetween Mikuni Corporation, Japan, and Carbu- Loan - retors Limited,India, will manufacture110,000 carburetors and 100,000 fuel pumps Equity 0.79 annuallyfor the domesticautomobile industry These carburetors will be morefuel- Quasi-equity - efficientand less polluting than those currently produced in India. Syndications - Total 0.79 7.50

Indonesia PTAgroMuko will establish a newmixed plantation projectwith 5,700 hectares of oil Loan 10.50 palm,2,000 hectares of rubberand 800 hectaresof cocoa,along with facilities for pri- Equity 2.20 maryprocessing. Quasi-equity - Syndications - Total 12.70 54.00

PT Astra InteMational, Inc. (Astra) is embarking on an investmentprogram to strengthen Loan 25.00 itscompetitive position in the automotiveand plantation sectors; it is alsoundergoing a Equity - gradualfinancial restructuring. IFC's investment in the closelyheld enterprise is a step Quasi-equity 12.50 towardsthe company'seventual listing in the localstock exchange. Syndications - Total 37.50 117.00

PT JakartaInternational Hotel (JIH), * whichis listedin the JakartaStock Exchange, Loan - madea newoffer to the publicin whichIFC subscribed its pre-emptiverights. Equity 1.25 Quasi-equity - Syndications - Total 1.25 15.50

Jamaica A financialsector credit line, a jointeffort of two of IFC'sinvestment departments-Capital Loan 15.00 Marketsand Latin America and the CaribbeanI-was approved.Three loans, for a total Equity - of $15.0million, will be providedto threeof Jamaica'sleading commercial and merchant Quasi-equity banks.These banks will provideforeign exchange financing for enterprisesundertaking Syndications - rehabilitationinvestments in theaftermath of HurricaneGilbert, as well asexpansion and Total 15.00 15.00 upgradingprojects.

Kenya PanafricanPaper Mills (E.A.) Limited* is increasingits capacityby installinga third paper Loan 15.00 machineand a de-inkingplant and expanding hs mechanical pulp mill. Equity - Quasi-equity Syndications Total 15.00 40.20

Korea,Republic of

GoldStar Company Ltd., * whichis listedin the KoreanStock Exchange, made a new Loan - offerto the publicin whichIFC subscribed its pre-emptiverights. Equity - Quasi-equity 4.44 Syndications - Total 4.44 166.00

KoreaInvestment and FinanceCompany* made two separate offers of sharesin the Loan - courseof FY89in whichIFC subscribed its pre-emptiverights. Equity 4.88 Quasi-equity - Syndications Total 4.88 54.50

TongYang Nylon Company Limited,* whichis listedin the KoreanStock Exchange, Loan - madea newoffer to the publicin whichI FC subscribed its pre-emptiverights. Equity 1.59 Quasi-equity - Syndications - Total 1.59 25.00

70 Appendix D

InvestmentsApproved IFC's Project inFiscal Year 1989 Investment Cost (US$millions)'

LatinAmerica (Regional)

The New WorldInvestment Fund (NWIF) is a $62.50million privately placed fund r ead- Loan - quarteredin the UnitedStates and managed by CapitalInternational Inc. It willallcw U.S. Equity 12.50 institutionsto investin LatinAmerican securities. Quasi-equity - Syndications - Total 12.50 62.50

Madagascar La Cotonniered'Antsirabe (Cotona)* will increaseproduction of qualitycombed yarn Loan 1.50 andfabrics for exportby installingnew combingand supporting equipment. Equity - Quasi-equity Syndications _ Total 1.50 6.50

LesPecheries de Nossi-B8S.A. * will purchasethree freezer trawlers and modern ze its Loan 3.56 shorefacilities to increaseproduction and quality of the company'sshrimp catch. Equity 0.15 Quasi-equity Syndications _ Total 3.71 14.50

Malaysia TheMalaysia Growth Fund is aimedat stimulatingJapanese portfolio investment in Loan Malaysia.Established under Malaysian law, it is anopen-ended unit trust with an nitial Equity three-yearclosed-end period. It is managedby the ArabMalaysian Merchant Bank Quasi-equity (AMMB)with Nikko International Capital Management Co., Ltd.acting in anadvis;ory Syndications _ capacityThe Fund, which seeks long-term capital appreciation through investmE!nt Total - 45.25 mainlyin listedsecurities of Malaysiancompanies, is modeledon thesuccessful IFC- sponsoredMalaysia Fund, Inc., launched on the NewYork Stock Exchange in May 1987.

Mexico IFC'sMultipurpose Credit Line to BancaSerfin, S.N.C. is animportant segment cf IFC's Loan 60.00 corporaterestructuring initiative in Mexico.Serfin will providefunds-in the form of long- Equity term loans,equity, or quasi-equity-andfinancial engineering expertise to smalland Quasi-equity medium-sizeprivate firms. The line may also be usedto supportprivatizations ar d Syndications _ export-orientedsectors like mining, industry, agro-processing, and tourism. Total 60.00 180.00

A termloan of up to $100million was approved for the CementosMexicanos (Cemex) Loan 60.00 Groupto helpthe companyfinance its modernizationand expansion program. T he pro- Equity gramis expectedto increaseCemex's operating efficiency and competitiveness inthe Quasi-equity Mexicanand international cement markets. Syndications 8.00 Total 68.00 264.00

IFCplayed a centralrole in the restructuringof theVisa Group, one of Mexico'slargest Loan 80.00 industrialconglomerates, whose activities consist of the productionof beverages,,distri- Equity bution,packaging, and food processing.In IFC'smost significant corporate restructuring Quasi-equity effortto date,the Corporationdeveloped debt-reduction options, and also provided a Syndications _ loanto Visa'slargest subsidiary, Fomento Mexicano Econ6mico S.A. de C. V (FEMSA). Total 80.00 455.00 TheGroup's debt was reduced by about$1.3 billionto approximately$400 million throughdebt buy-outs, debt-for-debt swaps, debt-equity swaps, and asset divestitures. Therestructuring also reduced Mexico's foreign debt by closeto $1.1billion. Morocco CompagnieMaritime Maroco-Norv6gienne (COMARIT) will acquire a secondsl ip, ena- Loan 4.30 blingit to offeryear-round ferry serviceacross the Straitof Gibraltarbetween Spain and Equity Morocco. Quasi-equity Syndications 2.00 Total 6.30 12.40

71 The Year's Approvalscontinued

InvestmentsApproved IFC's Project inFiscal Year 1989 Investment Cost (US$millions)'

Nigeria

ArewaTextiles, Ltd. * willmodernize and rehabilitateexisting equipment to reduceoper- Loan 5.88 atingcosts while maintaining quality Equity 0.12 Quasi-equity - Syndications - Total 6.00 12.00 MimiFisheries Nigeria Ltd. willexpand its shrimpand fish production capacity by 150 Loan 3.60 percentthrough the acquisitionof sevennew fishing vessels and additional on-shore Equity 1.20 transportfacilities. Quasi-equity - Syndications - Total 4.80 15.90 IFCapproved a guaranteefacility for TigerBattery Company (Nigeria) Limited* to cover Loan principaland interestpayments on a lineof creditfrom a localmerchant bank to be used, Equity as required,to refinancepayments due on IFC'sexisting loans. Quasi-equity - Syndications 0.27 Guarantee 2.99 Total 3.26 5.30 Pakistan

PakistanIndustrial Credit and Investment Corporation Limited (PICIC)*2requested IFC's Loan participationin a rightsissue in connectionwith a 25 percentincrease in theCompany's Equity 0.09 paid-upshare capital. The share issue was made to supportthe expansionof PICIC's Quasi-equity - industriallending and diversification into other financial services. Syndications - Total 0.09 1.57

The Thatta Oil Exploration Program*: Following encouraging results from the second well Loan drilledin the Thattablock, IFC made its secondinvestment in this oil and gasventure as Equity 2.50 part of theongoing exploration program. Quasi-equity - Syndications - Total 2.50 11.20

Philippines

The All Asia Capital and Leasing Corporation (AACL)* was established with IFC's assis- Loan tancein 1979to makelong-term funds available for the purchaseof industrialequipment Equity 0.28 to be leasedby smalland medium-scaleenterprises. The capital increase approved in Quasi-equity - FY89will support the expansionof AACL'sleasing and merchantbanking activities. Syndications - Total 0.28 2.00 Hambrechtand QuistVenture Capital Fund is a $15million venture capital fund thatwill Loan makeequity investments in smalland medium-size enterprises in the Philippines.The Equity 2.42 principalsponsors are Hambrechtand QuistInternational, one of the leadingventure Quasi-equity - capitalcompanies in the UnitedStates, IFC, and theAsian Development Bank. The Fund Syndications - willbe managedby a separatemanagement company Hambrecht and Quist Philippine Total 2.42 15.00 Investments,which is 80 percentowned by Hambrechtand Quist International. HopewellEnergy (Philippines) Ltd. hasa 12-yearagreement with the NationalPower Loan 10.00 Corporation,a government-ownedagency, to build,operate, and transfer a 200-MW Equity 1.10 powerplant using gas turbines. Quasi-equity - Syndications - Total 11.10 40.00

Intemational Container Terminal Services, Inc. (ICTSI) has a 25-year contract to manage, Loan operate,and develop the ManilaContainer Terminal, a 69-hectarecontainer port and Equity 0.81 oneof the threeharbors in the portof Manila. Quasi-equity - Syndications - Guarantee 8.06 Total 8.87 55.00

Philippine Long Distance TelephoneCompany (PLDT),* an IFCclient since 1969, is Loan 30.00 embarkingon its fifthexpansion program, which will add 130,000new telephone lines Equity - throughoutthe country IFCassisted PLDT in structuringand mobilizingforeign currency Quasi-equity - financingtotaling $154 million. Syndications 40.00 Total 70.00 400.00

72 AppendixD

InvestmentsApproved IlC's Project inFiscal Year 1989 Investment Cost (US$millions)'

Poland

Centrala Spoldzielni Ogrodniczych i Pszczelarskich(Hortex Cooperative Enterprises)is Loan 14.76 expandingits frozenfruit- and vegetable-processing facilities to producehigh-quality fro- Equity - zen productsfor exportto the WesternEuropean market. Quasi-equity Syndications - Total 14.76 56.90 Portugal

Finantia-Sociedadede Investlmentos,S.A. * madea newoffer of sharesin whichIFC Loan - subscribedits pre-emptiverights. Equity 0.25 Quasi-equity - Syndications - Total 0.25 1.70 Senegal

Africamer,S.A. will modernize and expand its seafoodprocessing facilities in Dake.r. Loan 3.00 Equity - Quasi-equity Syndications - Total 3.00 16.10 Swaziland

SpintexSwaziland Ltd. will establisha yarn spinningmill to producecotton and cctton- Loan - and-polyesteryarns for export. Equity 0.72 Quasi-equity 2.90 Syndications - Total 3.62 22.20 Tanzania TanganyikaSisal Spinning Company Ltd. will rehabilitatea sisalestate and expand a Loan 2.00 spinningmill to diversifyproduct lines. Equity - Quasi-equity Syndications - Total 2.00 5.90

Thailand

SiamCommercial Bank will providematching equity financing for medium-sizeThai Loan - enterpriseswith the $15million equity agency line established by IFC. Equity 15.00 Quasi-equity - Syndications - Total 15.00 30.00

ThaiFarmers Bank will providematching equity financing for smallThai enterprises with Loan - the $5million equity agency line established by IFC. Equity 5.00 Quasi-equity - Syndications - Total 5.00 5.00

IFCacted as a sponsorand co-lead underwriter in establishingThe Thai Prime hfnd Lim- Loan - ited,a $155million closed-end investment company incorporated in Singaporeand Equity - quotedon the InternationalStock Exchange in Londonand the SingaporeStock Quasi-equity - Exchange.The Fund's principal objective is to makelong-term investments in listedThai Syndications - companies. Underwriting 15.50 Total 15.50 155.00 Trinidadand Tobago

Thefinancial restructuring and privatizationof Trinidadand TobagoDevelopment Loan - FinanceCompany Limited will reduce,over time, the Government'sshare in the com- Equity 0.47 panyand allow the companyto expandthe rangeof its operationsand improve its port- Quasi-equity - folio.IFC subscribed equity capital and provided a guaranteeon a local-currencvbond Syndications - issueprivately placed with local financial institutions. Guarantee 4.68 Total 5.15 7.30

73 The Year'sApprovals conud

InvestmentsApproved IFC's Project inFiscal Year 1989 Investment Cost (US$millions)'

Turkey

Isko TekstilSanayi ve TicaretA.S.will builda 400-loomweaving mill in Inegol.The project Loan 32.27 representsan important step in the diversificationprogram of the KonukogluGroup, Equity - whosemain activity is in spinning.It will producecloth primarily for domesticmanufactur- Quasi-equity ers of garmentsfor export. Syndications - Total 32.27 81.00

KirklareliCam Sanay#iA.S. * will expand its glasstableware manufacturing facilities by 75 Loan 19.45 percentto 22,200tpy (104million pieces), to servethe domesticand export market. Equity - Quasi-equity Syndications - Total 19.45 55.00 IFCexercised its pre-emptiverights in the sharecapital increase of NasasAluminyum Loan Sanayiive TicaretA.S. *2to supportthe company'sefforts to improveits financial struc- Equity 0.03 tureby increasingequity and reducing reliance on short-termbank loans. Quasi-equity - Syndications - Total 0.03 5.90 IFCco-managed with J.R Morgana DM30million note issue-the firstof its kindfor a Loan 2.75 Turkishcompany-for RamDis Ticaret(Ram), a memberof the Koc Group.The pro- Equity - ceedswill beused for exportfinancing and will beon-lent to otherexporting companies Quasi-equity inthe Groupwith foreign currency needs. The success of thisissue should increase Syndications - accessto capitalmarkets not onlyfor Koc,but also for otherTurkish companies, diversify- Underwriting 4.84 ingtheir sources of foreigncurrency funding and lowering their borrowing costs. Total 7.59 16.50

SankoSantral Konfeksiyon Sanayii ve TicaretA.S. plans to doubleits trouser capacity to Loan 6.11 about1.2 millionpieces per yearand to add a newline to produce315,000 jackets per Equity - yearfor export. Quasi-equity Syndications - Total 6.11 14.00

SantralDikis SanayiiA.S., a 75:25joint venture between Coats Viyella pic. of the United Loan 7.12 Kingdomand severalTurkish shareholders, will expandits sewingthread capacity to Equity - 2,000tpy, to supportTurkey's growing export-oriented garment industry. Quasi-equity Syndications - Total 7.12 15.10

IFC'sinvestment will enable Sariville Turistik TesislerA.S. to expandthe scopeof a resort Loan hotelproject and complete the projecton schedule. Equity - Quasi-equity 0.28 Syndications - Total 0.28 1.50

TrakyaCam Sanayii A.S. * willdouble its float glass capacity to 380,000mtpy. The com- Loan 32.98 pany whichIFC helped establish in 1979,now exports 45 percentof its totalsales. Equity 2.51 Quasi-equity - Syndications 20.01 Total 55.50 141.70

IFChelped arrange a Euro-CommercialPaper (ECP) facility for TurkDis TicaretBankasi Loan 12.50 A.S.(Disbank). The facility will provideDisbank with medium-term funding for export Equity - financing,allow it to takeadvantage of short-termrate movements, and give it accessto Quasi-equity - non-traditionalsources of funds,such as corporations,insurance companies, and invest- Syndications 47.50 mentmanagers. IFC also approved a loanto Disbankfor its ownaccount and arranged a Total 60.00 60.00 syndicatedbank backstop line for the ECPfacility

Uruguay MigranjaS.A. is a greenfieldagricultural project which will produceabout 24,000 tpy of Loan 2.35 freshapples and other deciduous fruits mainly for exportto the EC. Equity 2.00 Quasi-equity - Syndications - Total 4.35 19.40

74 AppendixD

InvestmentsApproved IFC's Project inFiscal Year 1989 Investment Cost (US$millions)'

Venezuela

IFC has approved a loan to Polipropileno de VenezuelaPropilven, S.A. (Propilven)to con- Loan 40.00 struct a 70,000-mtpy polypropylene plant at the El Tablazo petrochemical complex, near Equity - Maracaibo. The plant will serve mainly the domestic market. Quasi-equity - Syndications 7.00 Total 47.00 165.30

Yemen Arab Republic

Bilquis Poultry Co. Ltd. will establish three parent stock breeding farms to produce 14 Loan 3.00 million hatching eggs per year for its own hatcheries, instead of importing them. Equity - Quasi-equity Syndications - Total 3.00 8.70

Yugoslavia

Sozd Iskra* will expand and modernize production facilities of electric and servo motors Loan 9.06 and electro optics. More than half of the incremental output will be for export to hard- Equity - currency markets. Quasi-equity Syndications - Total 9.06 23.00

VojvodjanskaBanka-Udrezena Banka* is implementing a second investment package to Loan 23.82 assistexport-oriented industries. Equity - Quasi-equity - Syndications 7.47 Total 31.29 88.60

Zambia

Zambia Hotel Properties Limited* (ZHP) received an additional loan from IFC to help Loan finance the increased cost of a project consisting of the construction of a new 192-i oom Equity wing of the Lusaka Intercontinental Hotel, the refurbishment of the hotel's old wing, and Quasi-equity - the rehabilitationof another hotel owned by ZHR Syndications 1.38 Total 1.38 5.70

Zimbabwe

udc Ltd. * made a new offer of shares in which IFC subscribed its pre-emptive rights. Loan Equity 0.33 Quasi-equity - Syndications - Total 0.33 2.50

World

In FY89 IFC participated in a privately placed capital increase for the Emerging Markets Loan Investment Fund (EMIF),* which was launched in FY88. The Fund is managed by Capital Equity 5.00 International,K.K., the Tokyo-basedsubsidiary of the Capital Group. Quasi-equity - Syndications - Total 5.00 76.50

Total Loan 1,017.26 Total Equity 130.66 Total Quasi-equity 126.16 Total Syndications 397.63 Total Underwriting 20.34 Total Guarantee 16.48 GrandTotal 1,708.53 9,694.10

*IFChas madea previousinvestment in thiscompany. 1. Investmentsdenominated in currenciesother than U.S. dollars are valuedat exchangerates prevailing on June30, 1989. 2. Asa rightsissue below $250,000, this project is notincluded in the total number of approvals. Note:Quasi-equity investments are a rangeof financinginstruments falling between senior loans and commonstock and include instruments such as preferredstock, subordinatedand convertible loans, income notes, puts, loans with conversion features.

75 International Finance Corporation InvestmentPortfolio June 30, 1989 Expressed in United States dollars (in thousands) Investmentheld for the Original CorpoTaston(inCuding Fiscalyears in Commitments undisbursedbalances) COUNTRY,REGION OR OTHER AREA whichcommitments Tota Total Equity Totalloans AND OBLIGOR Sector weremade IFC Syndications Loans (atcost) and equity Argentina AlpargatasS.A.I.C ...... Textiles FY77,84,86,88 42,935 7,500 30,993 5,000 35,993 Alpesca,S.A...... Foodandagribusiness FY79,83,84 6,811 0 1,538 1,611 3,150 ArcorS.A.l.C...... Generalmanufacturing FY88 12,000 0 12,000 0 12,000 ArgentineInvestment Company ...... Financialservices FY89 2,000 0 0 2,000 2,000 Astra-CompaniaArgentina de PetroleoS.A ...... Energy FY88,89 37,375 0 37,375 0 37,375 BancoFrances del Rio de la PlataS.A. Capitalmarkets FY89 15,000 0 15,000 0 15,000 BancoGeneral de NegociosS.A ...... Capitalmarkets FY88,89 20,000 0 20,000 0 20,000 BancoRio de la Plata,S.A ...... Capitalmarkets FY88 30,000 0 30,000 0 30,000 BancoRoberts S.A ...... Capitalmarkets FY86,89 20,000 0 18,779 0 18,779 BridasS.A.Pl.C...... Energy FY88 20,625 0 19,788 0 19,788 Bungey BornS.A ...... Generalmanufacturing FY88 40,000 0 40,000 0 40,000 CelulosaArgentina, S.A...... Timber,pulp and paper FY65,72 8,250 4,000 634 0 634 ChihuidosOil ExplorationProgram ... Energy FY89 4,950 0 0 4,950 4,950 Chirete/Morillo/OllerosOil Exploration Program...... Energy FY88 5,200 0 0 5,200 5,200 CompafhiaGeneral de Inversiones .... Financialservices FY89 100 0 0 100 100 HidraOil DevelopmentProject ...... Energy FY87 60,000 20,000 60,000 0 60,000 InversionesIndustriales S.A. and RobertsParticipaciones S.A ...... Capitalmarkets FY86 1,275 0 0 1,275 1,275 IpakoIndustrias Petroquimicas ArgentinasS.A ...... Chemicalsand petrochemicals FY78,79, 82,87 20,308 0 1,385 2,000 3,385 JuanMinetti S.A ...... Cementand construction materials FY78,81, 82,86 35,500 67,500 18,165 0 18,165 MassuhS.A ...... Timber,pulp and paper FY78,85,87,88 26,948 3,000 17,200 2,448 19,648 PetroquimicaCuyoS.A.l.C...... Chemicalsandpetrochemicals FY84,86 25,000 21,197 21,000 4,000 25,000 SoyexS.A ...... Foodand agribusiness FY77,85 21,000 0 2,300 0 2,300 S.A.GarovaglioyZorraquin ...... Chemicalsandpetrochemicals FY87 13,000 0 13,000 0 13,000 Terminal6 S.A...... Services FY87 5,500 0 5,042 0 5,042 364,198 28,584 392,782 Bangladesh BataShoe Company (Bangladesh) Limited ...... Generalmanufacturing FY85,86 3,551 1,415 2,538 509 3,047 Industrial Development Leasing Companyof BangladeshLimited .. . Capitalmarkets FY85 3,187 0 2,198 163 2,361 IndustrialPromotion and Development Companyof BangladeshLimited .. . Developmentfinancing FY80 1,051 0 0 1,051 1,051 4,735 1,723 6,458 Barbados CaribbeanFinancial Services Corporation...... Capitalmarkets FY84 300 0 0 300 300 Townand Commercial Properties Limited ...... Tourism FY87 1,250 0 1,184 0 1,184 1,184 300 1,484 Bolivia Banco Industrial, S.A...... Development financing FY76, 88 10,550 0 10,000 0 10,000 CompaniaMinera Concepci6n S.A... . Mining FY87 1,200 0 840 0 840 Plasmar,S.A ...... Generalmanufacturing FY73 400 0 0 100 100 10,840 100 10,940 Botswana BotswanaDevelopment Corporation Limited ...... Developmentfinancing FY79,85 607 0 0 607 607 Brazil AqosVillares,S.A ...... Ironand steel FY66,68,72 6,382 3,544 0 116 116 AmapaFlorestal e Celulose S.A.-AMCEL...... Timber,pulp and paper FY87 14,000 0 14,000 0 14,000 BancoBozano, Simonsen de InvestimentoS.A ...... Capitalmarkets FY88 20,000 0 20,000 0 20,000 BancoItau S.A...... Capitalmarkets FY88 30,000 0 30,000 0 30,000 BrasilparComercio e Participacoes S.A...... Capitalmarkets FY81 1,500 0 0 1,185 1,185 BrasitalS.A. para a Industria e o Comercio...... Textiles FY88 100 0 100 0 100 CapuavaCarbones Industriais, Ltda. Chemicalsand petrochemicals FY75,79 3,673 0 0 841 841 Cebrace-CompanhiaBrasileira de Cristal ...... Industrialequipment and machinery FY88 45,000 0 40,000 5,000 45,000 CimentoCaue S.A ...... Cementand constructionmaterials FY82,87 25,000 20,000 12,325 3,255 15,580 CimetalSiderurgiaS.A...... Ironandsteel FY78,84 11,380 0 0 3,000 3,000 CIMINAS-CimentoNacional de Minas,S.A ...... Cementandconstruction materials FY72,75, 81,87 51,084 154,756 26,667 6,619 33,285

76 Appendix E

Investmentheld for the Original Corporation(ncluding Fiscalyerars in Commitments undisbursedbalances) COUNTRY,REGION OR OTHER AREA whichcomrr itments Total Total Equity Totalloans ANDOBLIGOR Sector weremade IFC Syndicatons Loans (atcost) and equity Brazil (continued) Companhia Alcoolqu/mica Nacional-Alcoolqu(mica ...... Chemicalsandpetrochemicals FY84 24,000 0 6,856 3,719 10,574 Companhia Brasileirade AgropecuAria-COBRAPE ...... Food and agribusiness FY81 8,500 0 4,500 3,000 7,500 COPENE-Petroquimica do Nordeste S.A...... Chemicals and petrochemicals FY89 45,000 0 45,000 0 45,000 Dende do Para S/A-DEN PASA- Agricultura, Industria e Comercio de Oleaginosas ...... Food and agribusiness FY80 4,500 0 722 1,000 1,722 Duratex, S.A...... Timber, pulp and paper FY88 7,370 0 7,370 0 7,370 Eluma S.A. Industria E Comercio ..... Nonferrous metals FY89 15,000 0 15,000 0 15,000 Empresade Desenvolvimento de RecursosMinerais "CODEMIN" S.A...... Iron and steel FY73,78,8' 26,140 67,600 0 4,340 4,340 Equity Fund of Brazil ...... Financialservices FY88, 89 20,291 0 0 17,791 17,791 Fabrica Carioca de CatalisadoresS.A. . Chemicals and petrochemicals FY88 20,500 0 20,500 0 20,500 Fabrica de TecidosTatuape S.A ...... Textiles FY88 16,550 0 8,800 0 8,800 HeringdoNordesteS.A.-MALHAS Textiles FY80 2,000 0 271 0 271 lochpe S/A-Arrendamento Mercantil ("IAM") ...... Capital markets FY82 10,450 20,000 3,000 0 3,000 Mineracoes Brasileiras Reunidas S.A. Iron and steel FY88 20,000 0 20,000 0 20,000 Nitroclor Productos Quimicos S.A. Chemicals and petrochemicals FY86, 88 8,700 0 2,700 5,700 8,400 PapeleCeluloseCatarinense,S.A. Timber, pulp and paper FY89 19,561 2,631 15,000 0 15,000 Perdigao S.A. Comercio e Industria ... Food and agribusiness FY88 20,000 0 20,000 0 20,000 PetroquimicaTriunfoS.A ...... Chemicalsand petrochemicals FY81, 87 19,106 31,000 5,332 3,065 8,397 PISA-Papel de lmprensaS.A ...... Timber, pulp and paper FY83, 85, 88 58,800 31,670 22,000 8,200 30,200 Polisul Petroquimica S.A...... Chemicals and petrochemicals FY80, 81, 87 20,999 28,000 6,500 5,999 12,499 Politeno Linear Industria e Comerclo de Pruductos ...... Chemicals and petrochemicals FY89 25,000 0 18,500 6,500 25,000 PPH-Companhia Industrial de Poliopropileno...... Chemicals and petrochemicals FY80 33,000 0 17,258 1,643 18,901 Quimica da Bahia Industria e Comercio S.A...... Chemicals and petrochemicals FY85 5,286 0 308 1,800 2,108 Santista Industria Textilede Sergipe S.A...... Textiles FY88 4,500 0 3.200 1,300 4,500 Sao Paulo Alpargatas S.A...... Textiles FY87 30,000 0 30,000 0 30,000 SOCOCOS/A-Agroindustrias da Amazonia ...... Food and agribusiness FY83 5,500 0 2,100 2,500 4,600 Sotave AmazoniaQuimica e Mineral S/A ...... Fertilizers FY80, 83 28,000 13,000 14,200 0 14,200 S.A. Moinho SantistaIndustrias Gerais . Textiles FY88 4,000 0 4,000 0 4,000 Tecanor S.A.-Textil Catarinense do Nordeste ...... Textiles FY76, 80 16,200 0 1,233 0 1,233 Toalia.S.A.IndustriaTextil ...... Textiles FY88 1,900 0 1,900 0 1,900 Unibanco-Uniao de Bancos Brasileiros S.A...... Capital markets FY88 30,000 0 30,000 0 30,000 Villares I ndustriasde Base S.A.-VIBASA ...... Iron and steel FY80 5,000 0 1,250 0 1,250 Volvo do Brasil Motores e VeiculosS.A. Automotive industry FY79,83. 87 16,954 50,000 0 6,954 6,954 470,592 93,526 564,118 Burundi Verreriesdu Burundi,S.A.R.L...... Generalmanufacturing FY81,82,87 5,878 0 0 1,108 1,108 Cameroon Alucam-Compagnie Camerounaise de 'Aluminum Pechiney-Ugine..... Nonferrous metals FY79 7,932 0 0 932 932 Cotonniere Industrielle du Cameroun (CICAM) ...... Textiles FY86 2,981 0 2,996 0 2,996 Prestige Bottling Company ...... General manufacturing FY88 3,036 0 2,502 302 2.804 SocibteCamerounaise de Minoteries . . Food and agribusiness FY81 1,308 0 281 186 467 Socibtb Camerounaisede Verrerie .... General manufacturing FY81 1,802 0 0 102 102 Socibtb des Palmeraiesde la Ferme Suisse, S.A...... Food and agribusiness FY85 2,536 0 954 558 1,513 Socibtb des PlantationsNouvelles du Penja . Foodandagribusiness FY88 2,250 0 1,798 341 2,139 Socibtb Industrielle Laitiere du Cameroun "SILAC"...... Food and agribusiness FY87 2,851 0 2,060 571 2,631 Soci6t6 Sucrieredu Cameroun ...... Food and agribusiness FY83 1,444 0 1,075 0 1,075 11,667 2,992 14,659

77 InternationalFinance Corporation InvestmentPortfolio (continued) June30, 1989 Expressedin UnitedStates dollars (in thousands) Investmentheld for the Original Corporaeion(indudmng Fiscalyears in Commitments undisbursedbalances) COUNTRYREGION OR OTHER AREA whichcommitments Total Total Equity Totalloans AND OBLIGOR Sector weremade IFC Syndications Loans (atcost) and equity Chile Cape Horn Methanol Ltd ...... Chemicals and petrochemicals FY86, 88 100,000 0 45,000 5,000 50,000 CelulosaArauco y Constitucion S.A. . . Timber, pulp and paper FY87, 88 85,000 35,500 85,000 0 85,000 Comparia Chilena de Inversiones S.A. Agente de Valores ...... Capital markets FY82 200 0 0 120 120 Compania de Carbones de Chile COCARS.A...... Mining FY86 18,700 0 8,708 2,200 10,908 Empresa Minera de Mantos Blancos S.A...... Nonferrous metals FY58, 59,66,84 23,851 15,500 0 7,476 7,476 International InvestmentCompany of Chile S.A...... Financial services FY89 3,750 0 0 3,750 3,750 InvestmentManagement Company ... Capital markets FY88 60 0 0 60 60 Minera Escondida Limitada ...... Nonferrous metals FY89 85,000 0 70,000 15,000 85,000 The Chile InvestmentCompany S.A. . . Financial services FY88 4,650 0 0 4,650 4,650 208,708 38,256 246,964 China China Bicycles Company Limited ..... General manufacturing FY88 5,000 0 5,000 0 5,000 Crown (China) Electronics Co. Ltd..... General manufacturing FY89 15,000 0 15,000 0 15,000 Guangzhou PeugeotAutomobile CompanyLid ...... Automotive industry FY86 18,225 0 15,000 3,225 18,225 JF China InvestmentCompany Limited Development financing FY88 3,036 0 3,000 36 3,036 Shenzhen-ChronarSolar Energy Co., Ltd...... General manufacturing FY89 3,000 0 2,000 1,000 3,000 40,000 4,261 44,261 Colombia Carbonesdel Caribe, S.A ...... Mining FY84,87 14,782 0 13,324 0 13,324 Cementos Rioclaro S.A...... Cement and construction materials FY84 16,000 11,473 1,550 1,400 2,950 Corporacion Financiera del Norte .... Developmentfinancing FY69, 73 454 0 0 449 449 Corporacion Financiera del Valle ..... Developmentfinancing FY88,89 9,784 0 5,000 4,784 9,784 Corporacion Financiera Nacional ..... Development financing FY62,63,85 8,042 0 0 211 211 Enka de Colombia, S.A ...... Textiles FY67,70, 74,85, 86, 87,89 43,816 17,103 34,078 0 34,078 FrigorificosColombianos S.A...... Services FY83,89 1,576 0 367 724 1,090 Leasing Bolfvar,S.A ...... Capital markets FY81, 85, 87 7,195 7,000 3,414 195 3,609 PetrbleosColombianos Limited ..... Energy FY81, 82 6,750 9,259 1,790 3,435 5,225 Productos Derivados de la Sal,S.A. (PRODESAL) ...... Chemicalsand petrochemicals FY87 7,180 0 6,000 1,180 7,180 Promotora de la Interconexion de los Gasoductos de la Costa Atlantica S.A...... Services FY77 18,000 7,000 10,000 2,000 12,000 San Fernando/ChucuriOil Exploration Program ...... Energy FY86 5,000 0 0 4,186 4,186 75,523 18,563 94,087 Congo, People's Republic of the Congolaise des BoisImpregn6s, S.A. Timber, pulp and paper FY87 2,134 0 1,678 272 1,950 Congolaise Industrielle des Bois (C.I.B.),S.A ...... Timber, pulp and paper FY85,86 2,134 0 2,697 0 2,697 4,375 272 4,647 Costa Rica Matas de Costa Rica, S.A...... Food and agribusiness FY83,88 1,524 0 1,805 0 1,805 Scott Paper Company de Costa Rica, S.A...... Timber, pulpand paper FY78,87 4,000 0 1,125 0 1,125 2,930 0 2,930 Cote d'lvoire EtablissementsR. Gonfreville,S.A ..... Textiles FY77,87 9,656 0 8,390 885 9,275 Industrial Promotion Services (C6te d'lvoire) ...... Capital markets FY88 833 0 0 833 833 Omnium Chimique et Cosmetique (COSMIVOIRE)...... Food and agribusiness FY87 2,129 0 1,755 0 1,755 Societe des Industries Alimentaires et Laitieres "SIALIM" ...... Food and agribusiness FY88 3,654 0 2,922 524 3,446 Societelvorienned'Engrais(Siveng) . . Fertilizers FY80 6,392 0 3,837 1,272 5,109 16,904 3,513 20,418 Cyprus Dome Investments Limited ...... Tourism FY83 2,058 0 0 274 274 Dominica Fort Young (1986) Ltd...... Tourism FY89 700 0 0 700 700

78 AppendixE

Investmentheld for the Orignal Corporation (including FiscalyEars In Commitments undisbursedbalances) COUNTRYREGION OR OTHER AREA whichcommitments Total Total Equty Totalloans AND OBLIGOR Sector weretr ade IFC Syndications Loans (atcost) and equity DominicanRepublic CementosNacionales, S.A ...... Cementand construction materials FY74,81, 88 7,828 0 0 1,828 1,828 CompaniaDominicana de Leasing, S.A...... Capital.... markets FY84 3,150 0 0 52 52 ProductoraNacional de Algodon,C. por A...... Foodand agribusiness FY83,84,89 2,936 2,400 1,363 728 2,091 TransamericanHoteles, Dechiaro, Siskind,Vincent & Co.S. en C. por A...... Tourism FY87 6,000 0 6,000 0 6,000 7,363 2,607 9,971 Ecuador ComrpafiiaFinanciera Ecuatoriana de Desarrollo,S.A ...... Developmentfinancing FY69,73, 75, 77, 81 4,589 0 4,000 375 4,375 FacturasInternacionales S.A ...... Capitalmarkets FY88 88 0 0 88 88 MineraKollaS.A ...... Mining FY87 13,400 0 5,500 4,400 9,900 9,500 4,863 14,363 Egypt,Arab Republic of AlexandriaNational Iron & Steel CompanyS.A.E ...... Iron andsteel FY84 38.400 64,000 0 7,200 7,200 Aluminum Sulphate Company of Egypt S.A.E...... Chemicals and petrochemicals FY86 565 0 0 565 565 Arab CeramicCompany S.A ...... Cementand construction materials FY76,82 6,243 1,500 1,801 954 2,755 BechtelEgypt S.A.E ...... Services FY88 100 0 0 100 100 CrocodileTourist Project Company SAE ...... Tourism FY82 5,131 0 715 721 1,436 DeltaSugar Company S.A.E ...... Foodand agribusiness FY78,83 15,506 8,000 7,500 3,506 11,006 EgyptInvestment Finance Corporation, S.A.E...... Capitalmarkets FY85 1,640 0 0 140 140 Ismailia Fish Farming Company, S A.E. Food and agribusiness FY80, 81,8(3 5,009 0 1,930 100 2,030 IsmailiaMisrPoultryCompany,S.A.E.. Food and agribusiness FY79,83 14,353 0 0 1,645 1,645 MeleihaOil Developmentand Exploration Project ...... Energy FY87, 88 28,700 0 0 20.691 20,691 Phoenix ResourcesCompany of Egypt Energy FY88 20,000 0 20,000 0 20,000 Suez Cement Company ...... Cement and construction materials FY80 30.000 0 11,450 0 11,450 43,396 35,623 79,019 Ethiopia Red Sea Oil Exploration Program .. .. Energy FY89 7,800 0 0 7,800 7,800 Fiji CaposLimited...... Tourism FY86 8,818 0 8,719 0 8,719 Fiji Forest Industries Limited ...... Timber, pulp and paper FY87 3,627 0 1,989 1,638 3,627 MerchantBank of FijiLimited ...... Capitalmarkets FY87 2,347 0 0 347 347 10,708 1,985 12,692 Gabon CompagnieMiniere de l'Ogooue.... Mining FY89 32,000 0 32,000 0 32,000 ShellGabonS.A...... Energy FY89 50,000 110,000 50,000 0 50,000 Societede Placagesd'Essassa S.A. .. Timber,pulp and paper FY88 3.671 0 3,671 0 3,671 85,671 0 85,671 Gambia,The KomboBeach Hotel Limited ...... Tourism FY84 2,823 0 3,913 0 3,913 Ghana Ashanti Goldfields Corporation (Ghana) Limited ...... Mining FY85 27,500 27,500 27,500 0 27,500 Canadian Bogosu Resources Limited . Mining FY88,89 1,000 0 0 1,000 1,000 KetaBasin Oil ...... Energy FY87 4.500 0 0 2,900 2,900 27,500 3,900 31,400 Greece Aluminiumde Grece,Societe Anonyme IndustrielleetCommerciale...... Nonferrousmetals FY70,72 4,922 3,731 0 577 577 Grenada IssaNicholas (Grenada) Limited ...... Tourism FY86 6,000 0 4,500 0 4,500 Guinea BanqueInternationale pour le Commerceet l'lndustrie de la Guinee ...... Capital markets FY87 1,000 0 0 1,000 1,000 SocieteAurifere de GuineeS A...... Mining FY88 7,500 0 7,500 0 7,500 Societ6MixteAredor-GuineeS.A..... Mining FY83 14,835 0 7,873 1,228 9,101 15,373 2,228 17,601

79 Intemnational Finance Corporation InvestmentPortfolio (conind) June 30, 1989 Expressedin UnitedStates dollars (in thousands) Investmentheld for the Original Corporation (including Fiscal years in Commitments undisbursed balances) COUNTRY,REGION OR OTHER AREA which commitments Total Total Equity Totalloans AND OBLIGOR Sector were made IFC Syndications Loans (atcost) and equity Guyana Industrial Domesticand Electrical Appliances Limited ...... General manufacturing FY79 2,000 0 1,367 0 1,367 Haiti Promoteurset InvestisseursAssocies, S.A...... Food and agribusiness FY82 1,500 0 350 114 464 Honduras GranjasMarinas San Bernardo S.A. de C.V ...... Food and agribusiness FY87 575 0 0 575 575 TextilesRfo Lindo, S.A. de C.V ...... Textiles FY78 4,000 6,000 2,400 1,000 3,400 2,400 1,575 3,975 Hungary Agroferm Hungarian-Japanese Fermentation Industry Ltd ...... Food and agribusiness FY87 11,250 0 8,550 2,700 11,250 DunamontPolisztirolgyartoRt ...... Textiles FY89 17,209 11,375 13,063 3,579 16,642 Salgotarjan Glass Wool Limited ...... Industrial equipment and machinery FY88 4,972 0 3,440 1,532 4,972 Unicbank Rt...... Capital markets FY87 3,227 0 0 3,227 3,227 25,053 11,037 36,090 India Ahmedabad Electricity Company Limited ...... Services FY89 19,455 0 19,455 0 19,455 BajajTempoLimited ...... Automotiveindustry FY86 15,077 15,459 750 0 750 Bihar Sponge Iron Limited ...... Iron and steel FY85 15,440 0 14,096 630 14,726 Deepak Fertilisersand Petrochemicals Corporation Limited ...... Fertilizers FY80, 82,87,89 11,722 0 4,686 2,852 7,538 Export-lmport Bank of India ...... Capital markets FY87 15,000 0 14,805 0 14,805 Gujarat Narmada ValleyFertilizers CompanyLimited ...... Fertilizers FY87 33,911 0 33,179 0 33,179 Gujarat StateFertilizers ...... Chemicals and petrochemicals FY89 27,161 0 27,049 0 27,049 Hero Honda Motors Limited ...... Automotive industry FY87 7,738 0 7,330 0 7,330 Hindustan Motors Limited ...... Automotive industry FY87 36,886 0 28,590 0 28,590 Housing Development Finance Corporation Limited ...... Capital markets FY78,87 5,608 0 600 1,001 1,601 India Equipment Leasing Limited ..... Capitalmarkets FY86 2,817 0 0 317 317 India LeaseDevelopment Limited .... Capital markets FY85 5,351 0 0 351 351 Invel TransmissionsLimited ...... Automotiveindustry FY88 1,067 0 0 1,067 1,067 Keltron TelephoneInstruments Limited . Industrial equipment and machinery FY89 258 0 0 258 258 Mahindra Ugine Steel Company Ltd ... Iron and steel FY64,75,79 13,000 142 0 1,176 1,176 Modi Cement Limited ...... Cementandconstructionmaterials FY85 13,047 0 18,829 0 18,829 Nagarjuna Coated Tubes Limited ..... Iron and steel FY81 0 0 1,500 245 1,745 Nagarjuna Signode Limited ...... Iron and steel FY86 0 0 1,509 300 1,809 Nagariuna Steels Limited ...... Iron and steel FY87 8,150 0 484 241 725 The Great EasternShipping Company Limited ...... Services FY86 11,866 0 5,975 5,891 11,866 The Gujarat Rural Housing Finance Corporation Limited ...... Capital markets FY87 195 0 0 195 195 The Indian Rayon Corporation Limited . Cement and construction materials FY82,87 14,554 0 4,073 0 4,073 The TataIron and Steel Company Limited ...... Iron and steel FY81, 86, 89 70,844 20,000 25,444 21,383 46,827 Titan Watches Limited ...... General manufacturing FY87, 89 22,000 0 19,381 391 19,772 WBI Advanced Technology ...... General manufacturing FY89 200 0 0 200 200 227,735 36,496 264,231 Indonesia PT Asuransi Jiwa Dharmala Manulife Capital markets FY88 321 0 0 321 321 PT Bali Holiday Village ...... Tourism FY88 9,325 2,000 3,500 0 3,500 PT Jakarta International Hotel ...... Tourism FY73, 89 5,498 7,000 0 2,664 2,664 PT Monterado Mas Mining ...... Mining FY88 5,500 4,500 3,500 2,000 5,500 PT PapanSejahtera ...... Capital markets FY80 5,202 0 0 1,202 1,202 PT Private Development Finance Company of Indonesia ...... Developmentfinancing FY74 483 0 0 362 362 PT Saseka Gelora Leasing ...... Capital markets FY82,85 3,371 2,000 0 371 371 PT Semen Andalas Indonesia ...... Cement and construction materials FY80, 88 27,658 25,898 20,871 0 20,871 PT Unitex ...... Textiles FY71 1,550 1,750 0 800 800 27,871 7,721 35,592

80 Appendix E

Investment held for tne Original Corporaton (ncludng Frscal years in Commntments undisbursed balances) COUNTRY,REGION OR OTHER AREA which commitments Total Total Equity Totalloans AND OBLIGOR Sector wtpremade lFC Syndications Loans (at cost) and equity Jamaica Eagle Merchant Bank of Jamaica Limited ...... Capital markets FY89 5,000 0 5,000 0 5,000 Jamaica Citizens Bank Limited ...... Capital markets FY89 5,000 0 5,000 0 5,000 Jamaica Flour Mills Limited ...... Food and agribusiness FY82 5,000 0 833 0 833 Mutual Security Bank Limited ...... Capital markets FY89 5,000 0 5,000 0 5,000 Pegasus Hotels of Jamaica, Ltd...... Tourism FY69 1,987 926 0 669 669 St. Mary Banana EstatesLimited ..... Food and agribusiness FY87 4,660 0 3,749 911 4,660 The Falcon Fund (1985) Limited ...... Financialservices FY86 2.555 0 1,409 0 1,409 20,992 1,580 22,571 Jordan Al-Hikma PharmaceuticalsCompany . Generalmanufacturing FY87 2,193 0 2,118 0 2,118 Jordan Ceramic Industries Company Ltd ...... Cement and construction materials FY74 1,576 250 0 226 226 Jordan Leasing Company Ltd ...... Capital markets FY82 290 0 0 290 290 Jordan Lime and Silicate Brick Industries Company Limited ...... Cement and construction materials FY79, 85 3,848 0 1,539 0 1,539 Jordan Phosphate Mines Company Limited ...... ,...... Fertilizers FY75, 78.,82 38,229 50,000 7,476 0 7,476 11,132 516 11,647 Kenya Bamburi Portland Cement Company Limited ..... ,...... Cement and construction materials FY82 4,430 0 1,749 0 1,749 Development Finance Company of Kenya Limited...... Developmentfinancing FY80, 84 6,381 0 3,563 1,314 4.878 Diamond Trust of Kenya Limited ...... Capital markets FY82 804 0 0 804 804 Equatorial Beach Properties Limited . Tourism FY86 3,671 0 5,111 0 5,111 Industrial Promotion Services (Kenya) Limited ...... Capital markets FY82, 87 2,046 0 0 2,046 2,046 Kenya Commercial Finance Company Limited ...... Capital markets FY81 5,000 0 2,024 0 2,024 Leather Industriesof Kenya Limited ... General manufacturing FY84 2,713 0 1,029 595 1,624 Panafrican Paper Mills (E.A.) Ltd...... Timber, pulp and paper FY70, 74. 77,79,81 28,049 3,965 4,333 4,510 8,844 RiftValleyTextilesLimited ...... Textiles FY76 9,638 1,296 4,466 0 4,466 Tetra Pak Converters Limited ...... Timber, pulp and paper FY83 2,540 0 611 0 611 TourismPromotion Services (Kenya) Ltd ...... Tourism FY72 1,629 791 0 45 45 22,887 9,314 32,202 Korea, Republic of Anam IndustrialCompany Limited .... Industrialequipment and machinery FY88 15,747 0 0 15,747 15,747 Gold Star Company, Ltd...... General manufacturing FY75,76,77,79,80, 84,85,87.88 35,908 13,635 0 15,531 15,531 Hae Un Dae DevelopmentCompany, Ltd...... Tourism FY75 3,450 0 0 700 700 Korea Development Investment Corporation ...... Capital markets FY83,85 5,952 0 0 5,952 5,952 Korea Development Leasing Corporation...... Capital markets FY77, 79,37 5,862 10,000 0 331 331 Korea Investmentand Finance Corporation ...... Capital markets FY71, 74, 76, 79, 80, 82, 85, 89 8,509 0 0 6,920 6,920 Korea Long TermCredit Bank ...... Development financing FY68, 74, 7'6, 77, 78, 80,88 16,283 8,938 0 5,810 5,810 KoreaSecurities FinanceCorporation . Capitalmarkets FY75, 77, 80, 82, 84 8,392 0 0 2,014 2,014 KoreaZincCompany, Ltd ...... Nonferrousmetals FY76, 86 26,612 0 5,368 5,612 10,980 TaihanBulk TerminalCo., Ltd ...... Services FY81 6,000 3,500 0 2,500 2,500 Tong Yang Nylon Company, Limited ... Textiles FY75,88, t9 12,060 0 0 4,545 4,545 5,368 65,662 71,030 Liberia Liberian Bank for Development and Investment ...... Development financing FY66, 77, 84 702 1 0 70 70 Liberian Timber and Plywood Operation Company ...... Timber, pulp and paper FY88 8,500 0 8,500 0 8,500 8,500 70 8,570 Madagascar La Cotonniere d'Antsirabb (COTONA) S.A...... Textiles FY86 9,475 0 9,025 184 9,209 Les Pcheries de Nossi-Bb, S.A...... Food and agribusiness FY84 2,669 0 957 99 1,057 SocibtbTextiledeMajungaS.A ...... Textiles FY77,87 15,026 0 3,985 309 4,294 13,967 593 14,560

81 InternationalFinance Corporation InvestmentPortfolio (continued) June 30, 1989 Expressedin United States dollars (in thousands) Investmentheld for the Original Corporation(including Fiscalyears in Commitrments undisbursedbalances) COUNTRYREGION OR OTHER AREA whichcommitments Total Total Equity Totalloans AND OBLIGOR Sector weremade IFC Syndications Loans (atcost) and equity Malawi David Whitehead and Sons (Malawi) Ltd...... Textiles FY76, 82 10,784 0 2,864 0 2,864 Dwangwa Sugar Corporation Limited .Food and agribusiness FY77, 81, 85 11,306 0 8,812 0 8,812 Ethanol Company Limited ...... Chemicals and petrochemicals FY81, 82 2,458 0 476 245 721 Investment and Development Bank of Malawi Limited ...... Development financing FY79 605 0 0 605 605 The Leasing and Finance Company of Malawi, Limited ...... Capital markets FY86 747 0 672 76 747 Viphya Plywoods and Allied Industries Limited ...... Timber, pulp and paper FY87 4,427 0 3,308 500 3,808 16,132 1,426 17,558 Malaysia Aquabio (Sabah) Sdn. Bhd...... Food and agribusiness FY88 4,000 0 4,000 0 4,000 SEAVIProject ...... Capital markets FY85 1,000 0 0 1,000 1,000 4,000 1,000 5,000 Mali Societe Industrielle de Karit6 du Mali, S.A...... Food and agribusiness FY82, 83 2,297 0 1,756 0 1,756 Societe Mamadou Sada Diallo et Freres SARL (SOMACI)...... General manufacturing FY78 636 0 137 0 137 1,893 0 1,893 Mauritius Socota TextileMills Ltd...... Textiles FY87 5,993 0 5,000 993 5,993 Mexico Agro Industrial Exportadora,S.A. de C.V ...... Food and agribusiness FY87 2,001 0 1,500 501 2,001 Apasco, S.A. de C.V ...... Cement and construction materials FY88, 89 51,000 0 5,000 0 5,000 BancaSerfin,SNC .N ...... Developmentfinancing FY89 60,000 0 60,000 0 60,000 Celulosa y Papel de Durango, S.A. de C.V ...... Timber, pulp and paper FY86, 89 13,069 0 10,000 3,069 13,069 Cementos Veracruz,S.A...... Cement and construction materials FY73, 79 11,352 4,500 1,338 0 1,338 Conductores Monterrey S.A ...... Industrial equipment and machinery FY79 5,000 13,000 4,677 0 4,677 Crescent MarketAggregates Project Mining FY88 37,000 0 14,000 0 14,000 EmpresasToltecadeMexico,S.A .. Cementand construction materials FY79, 84 37,950 138,000 7,941 3,427 11,369 Fomento Economico Mexicano S.A. de C.V (Visa) ...... General manufacturing FY89 80,000 0 80,000 0 80,000 Hotel Camino Real Ixtapa, S.A .. . Tourism FY79, 81,87 4,201 0 0 4,198 4,198 IndustriasResistol, S.A...... Chemicals and petrochemicals FY80 8,000 17,000 500 0 500 IndustriasSultamex, S.A. deC.V ..... Fertilizers FY87 2,500 0 2,000 500 2,500 Metalsa,S.A ...... Automotive industry FY84, 88 9,400 0 6,500 1,400 7,900 Minera Real de Angeles, S.A. de C .V. Mining FY80 30,000 80,000 2,000 0 2,000 Papeles Ponderosa, S.A...... Timber, pulp and paper FY79, 81,84 11,157 4,500 680 0 680 Polimar,S.A. de C.V ...... Chemicals and petrochemicals FY89 14,500 0 14,500 0 14,500 Prompciones Industriales Mexicanas, S.A. de C.V ...... Chemicals and petrochemicals FY85 12,000 4,400 3,333 0 3,333 Proteison,S.A. de CY ...... Food and agribusiness FY85 2,770 0 0 820 820 Salumi, S.A. de C.V...... Food and agribusiness FY88 22,061 0 19,861 2,000 21,861 Sealed Power de Mexico, S.A. de C.V and Spimex, S.A. de C.V ...... Automotive industry FY88 9,000 0 9,000 0 9,000 The Cemex Group ...... Cement and construction materials FY89 60,000 8,000 60,000 0 60,000 TereftalatosMexicanos, S.A...... Chemicals and petrochemicals FY78 19,000 0 2,375 0 2,375 Universalde Valores,S.A. de C,V.V.... Food and agribusiness FY81 9,300 5,000 994 1,670 2,664 Vidrio Plano de Mexico, S.A. and Vitro Flotado,S.A ...... Industrial equipment and machinery FY80 15,000 99,900 4,800 0 4,800 311,000 17,585 328,585 Morocco Asment de TemaraS.A ...... Cement and construction materials FY77, 80 8,328 0 255 0 255 Banque Nationale pour le Developpement Economique ...... Development financing FY63,78, 84,86 46.690 40,240 46,358 1,544 47,903 Cimenterie Nouvelle de Casablanca-Cinouca, S.A...... Cement and construction materials FY82,83 17,844 0 7,900 2,044 9,944 Compagnie Maritime Maroco-Norvegienne (COMARIT) Services FY89 4,300 2,000 4,300 0 4,300 Creditlmmobilieret tt5elier ...... Developmentfinancing FY87 27,385 26,480 24,293 0 24,293 Fruitibre Marocaine de Transformation (FRUMAT) ...... Food and agribusiness FY86 7,583 0 5,792 0 5,792 Settat Filature SETAFIL...... Textiles FY88 4,864 0 2,996 919 3,916 Societe Miniere du Bou-Gaffer SOMIFER ...... Nonferrous metals FY80 15,335 0 877 2,348 3,225 92,771 6,855 99,627

82 Appendix E

Investmentheld for the Or ginal Corporation (including Fiscal years in Commitments undisbursed balances) COUNTRY,REGION OR OTHER AREA which comrnitments Total Total Equity Totalloans AND OBLIGOR Sector werenrade IFC Syndications Loans (at cost) and equity Mozambique Companhia Agro-Industrial Lonrho-Mogambique Limitada ..... Food and agribusiness FY87 2,500 0 2,250 0 2,250 XaiXai ...... Energy FY88 7,750 0 0 5,412 5,412 2,250 5,412 7,662 Nepal Nepal Orind Magnesite(Private) Limited ...... Mining FY82 4,966 0 7,379 0 7,379 Soaltee Hotel Limited ...... Tourism FY75 3,128 0 0 428 428 7,379 428 7,806 Niger Les Moulins du Sahel, S.A...... Food and agribusiness FY82 2,267 0 2,036 0 2,036 Nigeria Arewa Textiles,Ltd . . Textiles FY64, 67, 70 847 728 0 442 442 Dunlop Nigerian Industries Limited . . Automotive industry FY88 12,500 0 12,500 0 12,500 Ikeja Hotel Limited ...... Tourism FY81,85,838 12,131 0 7,717 1,491 9,208 Nigeria Engineering Works Limited . .. Automotive industry FY87 11,250 0 170 0 170 Nigerian TextileMills Limited ...... Textiles FY80, 87 21,503 0 1,580 735 2,315 Tiger Battery Company (Nigeria) Limited ...... General manufacturing FY85 2,850 2,276 3,954 0 3,954 25,922 2,668 28,590 Oman OmanDevelopmentBankS.A.0 ...... Developmentfinancing FY79 2,029 0 0 1,014 1,014 Pakistan Attock Refinery Limited ...... Energy FY79,82, 84 8,357 7,500 1,500 857 2.357 Dawood Hercules Chemicals, Ltd . . Fertilizers FY69, 89 21,223 0 17,300 2,923 20,223 HabibArkady Limited ...... Food and agribusiness FY81 3,315 0 3,150 165 3,315 HalaSpinningLimited ...... Textiles FY89 3,217 0 3,217 0 3,217 Mari Gas Company Limited ...... Energy FY86 24,982 21,543 5,627 0 5,627 MillatTractors Limited ...... Industrial equipment and machinery FY88 4,898 0 4,601 0 4,601 Packages Limited ...... Timber, pulp and paper FY65, 80, 82,87,88 16,932 10,087 6,750 705 7,455 Pakistan IndustrialCredit and Investment Corporation Limited .... Development financing FY63, 69, 75, 89 3,629 0 0 592 592 Pakistan Oilfields Limited ...... Energy FY79, 82,84 8,183 7,000 0 1,183 1,183 Pakistan Paper Corporation, Ltd...... Timber, pulp and paper FY67,76 6,855 546 4,511 0 4,511 Pakistan Petroleum Limited ..... Chemicalsand petrochemicals FY83,85 26,856 79,200 14,982 1,560 16,542 Shams TextileMills Limited .. Textiles FY89 2,719 0 2,719 0 2,719 Suraj Cotton Mills Limited ...... Textiles FY89 2,719 0 2,719 0 2,719 Thatta Oil ExplorationProgram ...... Energy FY87 6,800 0 0 2,014 2,014 67,076 9,999 77,075 Panama Banco Latinoamericano de Exportaciones, S.A ...... Capital markets FY79, 85, 86, 88 49,827 0 22,250 2,500 24,750 Vidrios Panamenos,S.A ...... General manufacturing FY78 3,800 0 0 1,280 1,280 22,250 3,780 26,030 Paraguay Empresa Hotelera de Encarnacitn S.A...... Tourism FY81, 8E 1,450 0 270 280 550 Sociedad Agricola Golondrina S.A. ... Food and agribusiness FY82 7,000 0 3,545 750 4,295 3,815 1,030 4,845 Peru Compafi(a Aurifera Rio Inambari, S.A. Mining FY86 6,500 0 6,000 500 6,500 Compania de Cemento Pacasmayo, S.A...... Cement and construction materials FY64, 67 248 1,357 0 91 91 Comnpan(ade Minas Buenaventura, S.A...... Mining FY79, 83,86 7,460 0 668 1,460 2,128 CompaFiade Minas Orcopampa, S.A. Mining FY86 9,000 0 6,750 0 6,750 Compania Minera San Ignacio de Morococha, S.A ...... Nonferrous metals FY80, 85 7,200 0 0 500 500 Consorcio Energetico de Huancavelica, S.A ...... Services FY82 4,500 0 1,732 0 1,732 S.A. Minera Regina ...... Nonferrous metals FY85 5,240 0 1,500 240 1,740 16,650 2,791 19,441

83 IntemnationalFinance Corporation InvestmentPortfolio (coninued) June 30, 1989 Expressedin UnitedStates dollars (in thousands) Investment held for the Original Corporation (including Fiscal years in Commitments und sbursed balances) COUNTRY,REGION OR OTHER AREA which commitments Total Total Equity Totalloans AND OBLIGOR Sector were made IFC Syndications Loans (atcost) and equity Philippines Acoje Mining Company Inc...... Mining FY77, 85 3,721 0 1,342 0 1,342 All Asia Capital and Leasing Corporation (AACL) ...... Capital markets FY80, 83, 85 5,585 6,000 1,857 491 2,348 BPI Agricultural Development Bank . . Developmentfinancing FY88 976 0 0 976 976 Cebu Shipyard and Engineering Works, Inc...... Industrial equipment and machinery FY78 2,100 0 131 0 131 Davao Union Cement Corporation .... Cement and construction materials FY81 16,000 0 4,503 0 4,503 First Philippine Capital Fund L.P ..... Financialservices FY88 4,200 0 0 4,200 4,200 General Milling Corporation ...... Food and agribusiness FY79 5,082 0 250 1,082 1,332 Hambrechl & Quist Venture Capital Fund ...... Capitalmarkets FY89 2,417 0 0 2,417 2,417 Manila Electric Company ...... Services FY89 36,926 2,958 27,884 0 27,884 Maria Cristina Chemical Industries, Inc. Iron and steel FY74, 79 2,190 0 0 436 436 NDC-Guthrie Plantations, Inc...... Food and agribusiness FY82 11,000 0 11,000 0 11,000 Philippine Associated Smelting and Refining Corporation ...... Nonferrous metals FY81 5,000 0 0 5,000 5,000 Philippine Long Distance Telephone Company ...... Services FY70, 82,87,88 58,530 0 54,000 0 54,000 Pure Foods Corporation ...... Food and agribusiness FY86 1,391 0 0 1,390 1,390 Venturesin Industry and Business Enterprises, Inc...... Capital markets FY80 245 0 0 14 14 100,967 16,005 116,972 Poland Centrala Spoldzielni Ogrodniczych i Pszczelarskich(Hortex) ...... Food and agribusiness FY89 15,044 0 14,758 0 14,758 Portugal Banco Portugues de Investimento .... Development financing FY82, 85, 87, 88 20,545 2,000 8,040 1,301 9,341 Finantia-Sociedadede Investimentos, S.A ...... Capital markets FY88,89 1,239 0 0 1,239 1,239 8,040 2,540 10,579 Rwanda Societe Rwandaise des Allumettes (SORWAL)S.A.R.L...... Timber, pulp and paper FY88 197 0 0 197 197 Societe Rwandaise pour la Production et la Commercialisationdu The ..... Food and agribusiness FY76, 79,85 1,111 0 92 0 92 92 197 289 Senegal African Seafood, S.A...... Food and agribusiness FY86, 88,89 4,201 0 2,505 906 3,411 Banque de l'Habitat du Senegal S.A. . . Capital markets FY80 465 0 0 465 465 IndustriesChimiques du Senegal, S.A. . Fertilizers FY82,88 37,145 0 14,100 145 14,245 Societe Financiere Senegalaisepour le Developpementde l'Industrie et du Tourisme ...... Development financing FY74,85 339 0 0 339 339 16,605 1,855 18,460 Seychelles AileeDevelopmentCCorporationLtd. .. Tourism FY87 9,132 0 8,864 0 8,864 Sierra Leone Sierra Cement Manufacturing Company Limited-"SERACEM" ... Cement and construction materials FY80 2,050 0 2,050 0 2,050 Somalia Somali Bag Company Limited ...... General manufacturing FY85 976 0 916 0 916 Somali Molasses Company Limited . . Services FY81 375 0 69 0 69 985 0 985 Spain Sociedad Espanola de Financiacidn de la Innovacidn, S.A...... Capital markets FY78 877 0 0 877 877 Sri Lanka Bank of Ceylon ...... Capital markets FY78,81 7,000 0 2,722 0 2,722 Development Finance Corporation of Ceylon ...... Developmentfinancing FY78, 80,83 457 0 0 457 457 Lanka Orix Leasing Company Limited Capital markets FY80,84,85 3,339 0 0 113 113 Taj Lanka Hotels Limited...... Tourism FY81 8,900 11,100 1,800 650 2,450 Union Assurance Limited ..... Capital markets FY88 485 0 0 485 485 4,522 1,704 6,226

84 AppendixE

Investmentheld for the Original Corporatlion(includmg Fiscalyea-s in Commitments undisbursedbalances) COUNTRY REGIONOR OTHER AREA whichcomm tments Total Total Equity Totalloans AND OBLIGOR Sector weremade LFC Syndications Loans (atcost) andequity Sudan Cotton TextileMills, Ltd...... Textiles FY76 9,979 0 8,714 0 8,714 Gezira Managil TextileCompany Limited ...... Textiles FY78 8,083 0 6,688 0 6,688 15,401 0 15,401 Swaziland Natex Swaziland Limited ...... Textiles FY88 8,770 0 5,000 1,270 6.270 Swaziland Industrial Development Company Limited ...... Developmentfinancing FY87, 89 3,000 0 2,300 700 3,000 The National TextileCorporation of Swaziland Limited ...... Textiles FY85 2,202 0 1,351 539 1,890 The Royal Swaziland Sugar Corporation Limited ...... Food and agribusiness FY78, 86 10,429 0 2,286 461 2,747 10,937 2,970 13,907 Tanzania Amboni Limited ...... Food and agribusiness FY85 4,379 712 3,089 0 3,089 Highland Soap and Allied Products Limited ...... General manufacturing FY78 1,741 0 660 0 660 3,748 0 3.748 Thailand Bangkok Glass Industry Co. Ltd ...... General manufacturing FY79,80,83 10,298 0 0 448 448 HMC PolymersCompany Limited ... . Chemicalsand petrochemicals FY88 16,499 11,000 15,000 1,499 16,499 National PetrochemicalCorporation Limited ...... Chemicals and petrochemicals FY84,86,88,89 35,512 0 35,000 512 35,512 NortheastAgriculture Company Limited ...... Food and agribusiness FY87 2,100 0 1,564 470 2.034 PeroxythaiLimited ...... _ . Chemicals and petrochemicals FY89 10,700 0 10,700 0 10,700 PhansrivivatCompany, Ltd ...... Food and agribusiness FY88 4,673 0 3,600 1,073 4,673 Sea Minerals Limited ...... Nonferrous metals FY83 556 0 0 482 482 SEAVIProject ...... Capital markets FY85 1,000 0 0 1,000 1,000 Siam CityCementCo., Ltd ...... Cementand construction materials FY79, 81,t85,87 56,169 68,000 0 5,644 5,644 Thailand TantalumIndustry Corporation, Limited ...... Nonferrous metals FY84 21,911 35,000 0 1,732 1,732 The Mutual Fund Company Limited ... Financial services FY77 294 0 0 294 294 The Siam Cement Co., Ltd ...... Cement and construction materials FY69, 76, ?8, 80, 85 16,878 15,874 0 1,422 1,422 World Aquaculture Company, Ltd..... Food and agribusiness FY84 3,711 0 0 561 561 65,864 15,137 81,001 Togo Ducros-Togo, S.A...... Food and agribusiness FY88 1,303 0 1,274 0 1,274 SocieteTogolaise de Siderurgie, S.A. .. Iron and steel FY88 850 0 779 0 779 2,053 0 2,053 Trinidad and Tobago Home Mortgage Bank ...... Capital markets FY87 411 0 0 411 411 Trinidadand Tobago Development Finance Company Limited ...... Developmentfinancing FY89 469 0 0 469 469 TrinidadNitrogen Company Limited . . . Fertilizers FY87 34,930 150,000 31,564 0 31,564 31,564 880 32,444 Tunisia AdwyaS.A ...... General manufacturing FY87 2,390 0 2,107 283 2,390 Banque de D6veloppement EconomiquedeTunisie ...... Developmentfinancing FY66, 70,78 2,305 0 0 2,305 2,305 Banque Nationale de Developpement Touristique ...... O...... Developmentfinancing FY69 9,081 1,167 0 2,248 2,248 Comete Engineering ...... Services FY87 38 0 0 38 38 Industries Chimiques du Fluor, S.A. Nonferrous metals FY74 640 0 0 640 640 Rozzi EdilizziaIndustrializ7ata de Tunisie(REIT) ...... Industrial equipment and machinery FY87 1,565 0 1,159 406 1,565 Societe des IndustriesTextiles Reunies, S.A...... Textiles FY88 4,393 0 2,247 2,146 4,393 Societe Industrielledes Textiles(SITEX) Textiles FY86 8,211 0 4,688 2,152 6,839 Societe Miniere de Spath-Fluor et Barytine (Fluobar),S.A ...... Mining FY85 245 0 0 245 245 Soci6teTunisienne de Leasing "Tunisie Leasing", S.A...... Capital markets FY85, 8E 3,938 0 1,475 471 1,946 Societes d'Etudes et de Developpement de Sousse-Nord ... Tourism FY73,7. 3,161 0 0 631 631 11,676 11,565 23,242

85 InternationalFinance Corporation Investnent Portfolio (conrinued) June30, 1989 Expressedin United States dollars(in thousands) Investmentheld for the Original Corporation(including Fiscalyears in Commitments undisbursedbalances) COUNTRYREGION OR OTHER AREA whichcommitments Total Total Equity Totalloans ANDOBLIGOR Sector weremade IFC Syndications Loans (atcost) andequity

Turkey Anadolu Cam Sanayii, A.S...... Industrialequipment and machinery FY70,86,87,88 19,454 3,294 10,686 1,956 12,643 Cam Elyaf Sanayii A.S...... Industrial equipment and machinery FY86 7,942 0 8,373 0 8,373 Dusa Endustriyel IplikSanayi ...... Textiles FY89 17,000 8,000 17,000 0 17,000 Elginkan Holding A.S...... General manufacturing FY88 16,454 0 14,758 0 14,758 EskaTurism veTicaretA.S ...... Tourism FY86,89 9,078 0 8,855 0 8,855 Guney Sanayi ve Ticaret Isletmeleri A.S...... Textiles FY87 16,478 0 15,535 0 15,535 Is Genel Finansal Kiralama A.S . ....-Capital markets FY88 478 0 0 478 478 Isko TekstilSanayi ve Ticaret A.S...... Textiles FY89 32,266 0 32,266 0 32,266 Kiris Otelcilik Ve TurizmA.S ...... Tourism FY89 7,804 0 7,328 0 7,328 Kirklareli Cam Sanayii A.S...... General manufacturing FY81,89 30,450 1,955 22,200 0 22,200 Man Kamyon ve Otobus Sanayi A.S. . Automotive industry FY85 6,466 0 8,143 0 8,143 M.A.N.MotorSanayiveTicaretA.S. Automotive industry FY82 7,886 0 5,171 0 5,171 Nasas-Aluminyum Sanayii ve Ticaret A.S...... Nonferrous metals FY71,76,83,84,89 10,074 0 0 1,499 1,499 Pinar Entegre et ve YemSanayii A.S. Food and agribusiness FY84 3,900 0 3,364 0 3,364 Ram DisTicaretA.S ...... Capitalmarkets FY89 3,249 1,505 3,130 0 3,130 Sanko Santral Konfeksiyonve Ticaret A.S...... Generalmanufacturing FY89 6,223 0 6,107 0 6,107 Santral DikisSanayiiA.S ...... Textiles FY89 7,338 0 7,124 0 7,124 Sariville TuristikTesisler A.S ...... Tourism FY89 4,811 0 2,544 2,151 4,696 SilkarTurizm Yatirim ve IsletmeleriA.S. Tourism FY86 5,806 0 6,361 0 6,361 Trakya Cam Sanayii A.S...... Industrial equipment and machinery FY79,81,83,84, 62,495 31,395 32,988 7,126 40,114 Turk Dis Ticaret Bankasi A.S...... Capital markets FY89 12,500 47,500 12,500 0 12,500 Turkiye Sinai Kalkinma Bankasi, A.S. . Development financing FY64,67,69,72,73, 75,76,77,80,83 19,742 45,028 0 2,698 2,698 Uluslararasi Endustri ve Ticaret Bankasi A.S. Financialservices FY85,88 15,000 45,000 15,000 0 15,000 Viking Kagit ve Seluloz, A.S...... Timber, pulp and paper FY70, 71, 82, 83 3,323 0 0 823 823 239,433 16,732 256,165 Uganda Development Finance Company of Uganda Limited ...... Development financing FY85 375 0 0 375 375 Sugar Corporation of Uganda Limited . Food and agribusiness FY84 8,000 0 8,000 0 8,000 The Toro and Mityana TeaCompany Limited ...... Food and agribusiness FY84 1,123 500 394 0 394 Uganda TeaCorporation Limited ..... Food and agribusiness FY85 2,808 0 2,814 0 2,814 11,208 375 11,583 Uruguay AstraPesqueriasUruguayasS.A. Food andagribusiness FY79,83,86,89 9,646 0 6,934 2,250 9,184 AzucitrusS.A...... Foodandagribusiness FY85 9,972 0 7,733 2,400 10,133 SurlnvestCasaBancariaS.A ...... Capitalmarkets FY89 12,586 10,000 2,730 1,786 4,516 17,396 6,436 23,832 Venezuela C.A. Venzolanade Cementos ...... Cement and construction materials FY88 10,000 0 10,000 0 10,000 Operaciones al Sur del Orinoco ...... Iron and steel FY89 37,375 35,750 37,375 0 37,375 PolipropilenodeVenezuela ...... Chemicals and petrochemicals FY89 33,000 14,000 40,000 0 40,000 87,375 0 87,375 Yemen Arab Republic Marib Agriculture Company, YS.C..... Food and agribusiness FY87 2,703 0 2,400 303 2,703 National Company for Vegetable Oil and Ghee Industries Limited ...... Food and agribusiness FY85 4,652 0 4,137 0 4,137 YemenBattery Manufacturing Company, YS.C...... General manufacturing FY84, 85 3,797 349 3,250 547 3,797 YemenHunt Oil Company ...... Energy FY86 9,000 0 3,375 0 3,375 13,162 851 14,012 Yugoslavia Belisce-BelTvornica Papira, Poluceluloze i Kartonaze-Belisce .. Timber, pulp and paper FY73,81 30,976 39,889 9,336 0 9,336 Frikom Ro IndustrijaSmrznute Hrane .. Food and agribusiness FY77,87 5,427 1,000 252 0 252 Ina-Naftaplin...... Energy FY85 28,873 8,909 15,023 0 15,023 lndustrija Za Avtomobilski Delovi i Traktori-"Ruen" Kocani ...... Automotive industry FY82 10,631 0 7,900 0 7,900 InstitutZa Fizikalnu Medicinu I Rehabilitaciju-Dr Simo Milosevic-Igalo...... Services FY82 19,149 0 17,224 0 17,224 International InvestmentCorporation forYugoslavia ...... Developmentfinancing FY70 1,813 188 0 1,105 1,105 Investiciona Banka Titograd-Udruzena Banka .. Tourism FY80 21,000 0 7,000 0 7,000 86 Appendix E

Investmentneld for the Or ginal Corporation(incluidingo Fiscalyears in Commtrments undisbursedbalances) COUNTRY,REGION OR OTHER AREA whichcomm tments Total Total Equity Totalloans ANDOBLIGOR Sector weremade IFC Syndications Loans (atcost) and equity

Yugoslavia (continued) ISKRA ...... Industrial equipment and mnachinery FY85, 89 22,668 10,600 22,562 0 22,562 Jugobanka-Udruzena Banka Beograd ...... F nancial services FY86 25,445 10,360 26,834 0 26,834 Ljubljanska Banka-Zdruzena Banka . Financialservices FY83, 86 71,149 30,117 67,554 0 67,554 Small-ScaleEnterprise Project (Loan to Eight Banks)...... Financial serv ces FY60 26,000 4,233 8,695 0 8,695 Radoje Dakic ...... Industrial equipment ano machinery FY80 18,700 0 7,013 0 7,013 Sour Energoinvest ...... Industrialequipment ano machinery FY85 15.160 0 13,603 0 13,603 Tovarna Avtomobilovin Motorjev Maribor ...... Automotive industry FY71, 80, 8-1' 35,390 869 25,698 0 25,698 Tovarna Avtopnevmatike "Sava-Semperit". .. II.... Automot ye industry FY72, 78, 8(1,88 26,815 1,341 12,722 0 12,722 Tvornica Kartona f Ambalaze Cazin ... Timber, pulp and paper FY77 10,821 7,366 3.766 0 3,766 UNIAL-Tovarna Glinice in Aluminija Boris Kidric ...... Nonferrous metals FY86 35,603 0 34,917 0 34,917 Vojvodjanska Banka-UdrezenaBanka . Financial services FY87, 89 51,940 31,094 50,023 0 50,023 330,122 1,105 331,228 Zaire Grands H6telsdu Zare, S.Z.A.R.L....Tourism FY85 15,000 0 12.000 0 12,000 Soci4tb Financi6re de D6veloppement . Developmentfinancing FY70, 85 1,297 0 0 1,297 1,297 Soci4t6 Textilede Kisangani, S.Z.A.R L Textiles FY85 9,065 0 8,863 575 9,438 Utexafrica, S.PR.L. and Usines Textiles Cotonni4res de Kinshasa (Utexco), S.Z.A.R.L...... Textiles FY88 12,909 0 12,117 0 12,117 32,960 1,872 34.853 Zambia Development Bank of Zambia.....Development financing FY76 545 0 0 545 545 GwembeValley Development CompanyLimited ...... Fooo and agribusiness FY88 4,500 0 3,700 800 4.500 Kafue Textile of Zambia Limited .... Textiles FY80, 85 10,746 0 11,593 0 11,593 Masstock Zambia Limitede...... Food and agribusiness FY89 8,000 0 8,000 0 8,000 Mpongwe Development Company Limited ...... Food and agribusiness FY85 2,121 0 2,216 293 2,509 Zambia Beta Shoe Company Limited . . General mnanufacturing FY72, 73 1,146 1,131 0 228 228 Zambia Consolidated Copper Mines Limited ...... Nonferrous metals FY80, 82 45,142 8,000 23,750 0 23,750 Zambia Hotel Properties Limited....Tourism FY84 7,500 13,509 7,500 0 7,500 56,759 1,866 58,625 Zimbabwe Crest Breeders International(Private) Limited ...... Food and agribusiness FY86 5,805 0 4,999 625 5.624 udc Limited ...... Capital markets FY85, 87,E9 11,911 0 9,972 416 10,387 Wankie Colliery Company Limited . ... Mining FY81 20,000 16,000 5,250 0 5,250 20,221 1,041 21,262 RegionalInvestments Africa SIFIDA InvestmentCompany, SA. .. Development financing FY71, 76, E;5 3,773 1,940 0 635 635 AfriGanManagement Services Company ...... Services FY89 1,400 0 0 1.400 1,400 Asia SEAVIProject ...... Capital markets FY85 1,050 0 0 1,050 1,050 Latin America New World InvestmentFund....Financial services FY89 12,500 0 0 12,500 12,500 0 15,585 15,585 WorldwideInvestments EmergingMarkets Investment Fund ... Financialservices FY88 10,000 0 0 10,000 10,000 EmergingMarkets Growth Funo, Inc. . Financialservices FY88 18,911 0 0 18,841 18,841 0 28,841 28,841 Other(Taiwan, China) 2 AsiaCement Corporation...... Cement andconstruction materials FY70 4,019 200 0 36 36 Total 3,472,158 572,492 4,044,650

87 InternationalFinance Corporation InvestmentPortfolio (continued) June 30, 1989 Expressedin United States dollars (in thousands)

Summary JUNE30, 1989 JUNE30, 1988 Equity Total Loans Equity TotalLoans Loans (at cost) and Equity Loans (atcost) and Equity INVESTMENTSHELD FOR THE CORPORATION $3,472,158 $572,492 $4,044,650 $2,847,915 $526,192 $3,374,107 Undisbursedbalances 1,151,891 100,038 1,251,929 974,182 111,741 1,085,923 Disbursed balances $2,320,267 $472,454 $2,792,721 $1,873,733 $414,451 $2,288,184 INVESTMENTSHELD BY THE CORPORATIONFOR PARTICIPANTS Total $ 923,030 $ 349 $ 923,379 $ 895,532 $ 460 $ 895,992 Undisbursed balances 183,293 - 183,293 197,139 - 197,139 Disbursed balances $ 739,737 $ 349 $ 740,086 $ 698,393 $ 460 $ 698,853 TOTAL INVESTMENTSHELD FOR THE CORPORATIONAND FOR PARTICIPANTS Total $4,395,188 $572,841 $4,968,029 $3,743,447 $526,652 $4,270,099 Undisbursedbalances 1,335,184 100,038 1,435,222 1,171,321 111,741 1,283,062 Disbursed balances $3,060,004 $472,803 $3,532,807 $2,572,126 $414,911 $2,987,037

Note 1 Commitments include funds to be provided by IFC for its own account, funds to be provided by participants through the purchase of an interest in IFC's investment, and funds to be provided by other financial institutionsin association with IFC, where IFC has rendered material assistance in mobilizing those funds. Original commitments are composed of disbursed and undisbursed balances. The undisbursed portion is revalued at current exchange rates while the disbursed portion representsthe cost of the commitment at the time of the disbursement. Loan investments held for the Corporation are revalued at the current exchange rates. Note 2 Representsinvestments made at a time when the authoritieson Taiwanrepresented China in the InternationalFinance Corporation (prior to May 15, 1980). General: The operational investments are represented by loans and equity, as stated. In addition, in certain investments,the Corporation has the right to acquire shares and/or participate in the profits of the enterprise.

88 IntemnationalFinance Corporation Statementof CumulativeGr-oss Commitments Appendix F June 30, 1989 In thousandsof United Statesdollars COUNTRY COUNTRY REGIONOR Numberof CumulativeGross Commitments (1) REGIONOR Numberof CumulativeGross Commitments(1) OTHERAREA Enterprises IFC Syndications Total OTHEFAREA Enterprises IFC Syndications Total Afghanistan ...... 1 $ 322 $ 0 $ 322 Malaysia ...... 8$ 37,742 $ 12,907 $ 50,649 Argentina ...... 34 518,837 127,058 645,895 Mali ...... 2 2,932 0 2,932 Australia...... 2 975 0 975 Mauritania...... 1 10,448 9,558 20,006 Bangladesh ...... 5 12,842 4,155 16,997 Mauritijs ...... 3 8,259 98 8,357 Barbados ...... 2 1,550 0 1,550 Mexicc...... 40 610,337 508,787 1,119,124 Bolivia ...... 7 19,487 1,000 20,487 Morocco...... 12 150,522 69,140 219,662 Botswana...... 1 607 0 607 Mozarrbique...... 2 10,250 0 10,250 Brazil...... 67 962,931 527,442 1,490,373 Nepal...... 2 8,094 0 8,094 Burkina Faso...... 1 542 0 542 Nicaragua...... 3 8,543 929 9,472 Burundi...... 1 5,878 0 5,878 Niger...... 1 2,267 0 2,267 Cameroon...... 12 28,595 253 28,848 Nigeria...... 10 65,004 3,521 68,525 Chile...... 13 336,965 52,100 389,065 Oman...... 1 2,029 0 2,029 China ...... 5 44,261 0 44,261 Pakistan...... 24 184,315 126,987 311,302 Colombia ...... 34 176,486 54,821 231,307 Panarm-a...... 3 55,100 0 55,100 Congo, People's ParagLuay...... 4 14,650 0 14,650 Republic ofthe .... 4 7,925 0 7,925 Peru ...... 16 81,695 3,621 85,316 Costa Rica...... 4 7,997 217 8,214 Philippines...... 33 228,691 23,533 252,224 C6te d'lvoire ...... 7 26,393 0 26,393 Polanc ...... 1 15,044 0 15,044 Cyprus ...... 4 5,270 597 5,867 Portugal...... 4 25,528 11,000 36,528 Dominica ...... 1 700 0 700 Rwanca...... 2 1,308 0 1,308 Dominican Republic .. 5 22,914 2,400 25,314 Senegal...... 8 51,899 755 52,654 Ecuador...... 8 44,360 1,236 45,596 Seychelles...... 1 9,132 0 9,132 Egypt, Arab Republic of .13 166,240 73,500 239,740 Sierra L-eone...... 1 2,050 0 2,050 El Salvador...... 2 1,074 0 1,074 Somalia...... 2 1,351 0 1,351 Ethiopia...... 4 20,078 3,490 23,568 Spain...... 5 19,048 1,685 20,733 Fijil...... 4 20,792 0 20,792 Sri Lanka ...... 8 25,526 13,672 39,198 Finland...... 4 1,075 2,073 3,148 Sudan ...... 6 26,511 6,489 33,000 Gabon ...... 3 85,671 110,000 195,671 Swaziland...... 4 24,401 0 24,401 Gambia, The...... 1 2,823 0 2,823 Tanzaria...... 4 12,288 712 13,000 Ghana ...... 4 33,000 27,500 60,500 Thailarnd...... 22 222,949 139,558 362,507 Greece ...... 7 26,006 41,107 67,113 Togo...... 3 10,242 0 10,242 Grenada...... 1 6,000 0 6,000 TrinidaJ and Tobago. .... 5 38,160 150,000 188,160 Guatemala ...... 3 18,200 0 18,200 Tunisia...... 13 40,241 2,324 42,565 Guinea ...... 4 23,443 0 23,443 Turkey ...... 37 402,249 196,176 598,425 Guyana...... 1 2,000 0 2,000 Uganca...... 6 15,836 1,588 17,424 Haiti ...... 1 1,500 0 1,500 Uruguay...... 5 36,954 10,000 46,954 Honduras ...... 4 4,927 6,101 11,028 VeneZLiela...... 11 110,585 51,661 162,246 Hungary...... 4 36,657 11,375 48,032 YemenArab Republic. .. 5 22,552 1,099 23,651 India ...... 44 514,193 96,474 610,667 Yugoslavia...... 25 510,274 200,339 710,613 Indonesia ...... 16 108,280 78,281 186,561 Zaire...... 7 42,704 0 42,704 Iran, Islamic Republic of .7 34,343 8,193 42,536 Zambia ...... 10 85,072 22,640 107,712 Israel...... 1 10,500 0 10,500 Zimbabwe...... 3 37,717 18,000 55,717 Italy ...... 1 960 0 960 Emerging Markets Jamaica...... 10 35,749 926 36,675 Growth Fund/ Jordan ...... 6 46,810 50,250 97,060 Emerging Markets Kenya ...... 15 95,334 35,667 131,001 lnve3tmentFund ... 3 41,411 0 41,411 Korea, Republic of....19 185,188 45,135 230,323 Regionial: Lebanon ...... 4 6,505 2,600 9,105 Africa...... 2 5,173 1,940 7,113 Lesotho...... 1 330 0 330 LatirnAmerica..... 1 10,000 0 10,000 Liberia ...... 2 9,202 1 9,203 Asia ...... 1 1,050 0 1,050 Madagascar...... 4 28,420 0 28,420 Other (2)...... 1 8,444 1,400 9,844 Malawi ...... 7 32,413 0 32,413 TOTAL ...... 786 $7,120,127 $2,954,071 $10,074,198

Note(1): Cumulative commitments are composed of disbursedand undisbursedbalances. Thea undisbursed portion is revaluedat currentexchange rates while the dis- bursedportion represents the cost of thecommitment at thetime of disbursement. Note(2): Represents investments made at a timewhen the authorities on Taiwanrepresented Chine in the internationalFinance Corporation (prior to May1 5,1 980).

89 IFC Management

* President ...... Barber B. Conable Executive Vice President .William S. Ryrie Vice President,Investment Operations ...... Judhvir Parmar Vice President,Portfolio and Advisory Operations ...... Wilfried E. Kaffenberger Vice President,Finance and Planning ...... Richard H. Frank Vice President and General Counsel ...... Jose E. Camacho Vice President,Engineering ...... Makarand V. Deheiia

* Secretary ...... Timothy T Thahane

INVESTMENTDEPARTMENTS' Director, Department of Investments,Africa I ...... Andre G. Hovaguimian DivisionalManager-Benin, Burkina Faso, Cameroon, Congo (People's Republic of the), C6te d'lvoire, Gabon, Ghana, Mali, Niger,Togo ...... Philippe Lietard DivisionalManager-Gambia, Guinea, Guinea-Bissau, Liberia, Mauritania, Morocco, Senegal, Sierra Leone, Tunisia ...... G.K. van der Mandele Director, Department of Investments,Africa 1/...... M. Azam K. Alizai DivisionalManager-Botswana, Ethiopia, Kenya, Lesotho, Malawi, Mauritius, Mozambique, Seychelles, Swaziland, Tanzania,Uganda, Zambia ...... Michael Dixon DivisionalManager-Burundi, Djibouti, Madagascar, Nigeria, Rwanda, Somalia,Sudan, Zaire, Zimbabwe Karl V...... Voltaire Director, Department of Investments, AsiaI ...... Torstein Stephansen 2 Divisional Manager-China, Indonesia, Kiribati, Papua New Guinea, Thailand, Vanuatu,Viet Nam ...... Sakdiyiam Kupasrimonkol Divisional Manager-Fiji, Malaysia, Philippines, Republic of Korea, Solomon Islands, Tonga, Western Samoa ...... Vijay K. Chaudhry Director, Department of Investments,Asia /1 ...... Jemal-ud-din Kassum Divisional Manager-India, Myanmar* *, Nepal ...... Athishdam Tharmaratnam DivisionalManager-Afghanistan, Bangladesh, Maldives, Pakistan, Sri Lanka ...... Damian von Stauffenberg Director,Department of Investments, Europe and the Middle East ...... Douglas Gustafson Divisional Manager-Cyprus, Greece, Portugal, Spain, Turkey,Yugoslavia ...... Jean-Philippe F.Halphen Divisional Manager-Egypt (Arab Republic of, Hungary, Iran, Iraq, Jordan, Kuwait, Lebanon, Oman, Poland, Saudi Arabia, Syrian Arab Republic, United Arab Emirates, YemenArab Republic ...... Edward A. Nassim Director, Department of Investments, Latin America and the Caribbeanl ...... Helmut Paul Divisional Manager-Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua ...... Varel Freeman Divisional Manager-Antigua and Barbuda, the Bahamas, Barbados, Belize,Colombia, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Panama, St. Lucia, Trinidad and Tobago, Venezuela ...... Pho Ba Quan3 Director,Department of Investments, Latin America and the Caribbean 11 ...... Everett J. Santos Divisional Manager-Bolivia, Brazil, Paraguay,Uruguay ...... VivekTalvadkar Divisional Manager-Argentina, Chile, Ecuador, Peru ...... Manuel Nunez Director,Capital Markets Department ...... Charles 0. Sethness Deputy Director ...... Nicholas W. Noon4 Divisional Manager-Afghanistan, Argentina, Bahrain, Bangladesh, Chile, China, Cote d'lvoire, Gambia, Ghana, Guinea, Hungary, Jordan, Kuwait, Liberia, Maldives, Mali, Mauritania, Morocco, Myanmar* *, Pakistan, Panama, Peru, Portugal,Saudi Arabia, Senegal, Sierra Leone, Sri Lanka, Spain, Tunisia,Uruguay, Yugoslavia,Zaire ...... Khalid A. Mirza Divisional Manager-ASEAN, Central America; Botswana, Colombia, Cyprus, Ecuador,Egypt (Arab Republic of), Ethiopia, Fiji, Greece, Madagascar, Malawi, Malta, Malaysia, Mauritius, Mexico, Mozambique, Oman, Philippines, Republic of Korea, Seychelles, Somalia,Sudan, Swaziland, Tanzania,Thailand, Uganda, Venezuela,Viet Nam, YemenArab Republic, Zambia, Zimbabwe ..... Cesare Calari Divisional Manager-Barbados, Bolivia, Brazil, Burkina Faso,Dominican Republic, Cameroon, Congo (People's Republic of the), Gabon, Ghana, India, Indonesia, Jamaica, Kenya, Nepal, Nigeria, Niger, Papua New Guinea, Paraguay, Poland, Togo, Trinidad and Tobago,Turkey, United Arab Emirates; other Caribbean countries ...... Farida Khambata Manager, InternationalSecurities Group ...... R. Michael Barth

SUPPORTDEPARTMENTS Director, BusinessDevelopment and Syndications' ...... Irving Kuczynski Manager, Public Relationsand Syndications ...... Francis de C. Hamilton Manager, BusinessDevelopment ...... Bruce H. MacLeod Manager, Energy Unit ...... Hugh Henry-May Director,Economics Department, and Chief Economic Adviser ...... Guy R Pfeffermann Manager, Foreign InvestmentAdvisory Service ...... Dale R. Weigel Lead Economist ...... Javed Hamid Chief Operations EvaluationOfficer ...... Walter 1.Cohn

90 Appendix G

DeputyDirector, Engineering ...... AndreasRaczynski TechnicalManager, Agriculture and Forest Products ...... FriedrichLuhde TechnicalManager, Chemicals and Petroleum ...... GilbertHunt TechnicalManager, General Manufacturing ...... GopiNath Puri TechnicalManager, Mining and Metals ...... ClausA. Westmeier Manager,Technology and Development ...... AlakadriK. Bose Manager,Caribbean Project Development Facility ...... PaulR. Hinchey Coordinator,Africa Project Development Facility ...... AlexanderN. Keyserlingk Manager,Africa Project Development Facility (Abidjan) ...... AndreJ. Cracco Manager,Africa Project Development Facility (Nairobi) ...... RichardP Parry6 Financeand Planning PrincipalFinancial Adviser ...... VasantH. Karmarkar SeniorAdviser, Information Technology ...... AllenF Shapiro Manager,Accounting ...... FayezulH. Choudhury Director,Finance and Budgeting ...... EduardoCosta Manager,Financial Planning and Policy...... HaroldRosen Manager,Financial Operations ...... BernardoFrydman Manager,Planning and Budgeting ...... PeterA. Dickerson

Legal DeputyGeneral Counsel ...... WalterF Norris ChiefCounsel ...... FernandoCabezas ChiefCounsel ...... DavidG.T d'Adhemar ChiefCounsel ...... DaoudL. Khairallah ChiefCounsel ...... HumphreyC. Winterton Other OperationsAdviser ...... NissimH. Ezekiel Coordinator,Africa Enterprise Fund ...... GuyC. Antoine Personneland Administration Manager...... RobertM. Voight Portfolioand Advisory Operations Head,Corporate Finance Services ...... PeterC. Jones Manager,Special Operations ...... RolandoM. Zosa Manager,Portfolio Operations Support Unit ...... JohnW Lowe SPECIAL REPRESENTATIVES AND REGIONAL MISSIONS7 SpecialRepresentative in Tokyo ...... SugioHatanaka DeputySpecial Representative in Tokyo ...... MitchellAlland SpecialRepresentative in Europe(London) ...... GiovanniVacchelli 8 SpecialRepresentative in Europe(Paris) ...... GunterH. Kreuter' RegionalMission in Easternand Southern Africa (Nairobi) ...... ErnestM. Kepper RegionalMission in India(New Delhi) ...... MohanWikramanayake RegionalMission in Indonesia(Jakarta) ...... MumtazKhan RegionalMission in the MiddleEast (Cairo) ...... John H. Stewart ResidentMission in Nigeria(Lagos) ...... BahaduraliJetha RegionalMission in NorthAfrica (Casablanca) ...... SamiHaddad RegionalMission in the Philippines(Manila) ...... RichardL. Ranken RegionalMission in Thailand(Bangkok) ...... CarlosM. Tan ResidentMission in Turkey (Istanbul) ...... ReynaldoOrtiz RegionalMission in Western Africa (Abidjan) ...... HungNguyen IFCAdviser, Australasia (Sydney) ...... NeilPaterson

These officers hold the same position in the InternationalBank for Reconstructionand Development Formerly Burma. 1 Drectors of investmentdepartments and the Capital Markets Department report to the Vice President, Irivestment Operations,on new business, and to the Vice President,Portfolio and Advisory Operations,on portfolio superv sion matters. 2. EffectiveJuly 1,1989. Mr. Stephansenwill retire after 22 years with theeCorporation.Mr Pho Ba Quan wmusucceed h m in this posit on. 3. EffectiveJuly 1, 1989, Mr. Quan will become Director, Department of Investments,Asia 1,and Mr Richard P Parry wilt hold this postion 4. EffectiveMay 19, 1989, Mr Nicholas W Noon resigned from IFC toloin the private sector; effective July 17,1989, Mr. Robert Graffam w 11occupy this position. 5. The D rector of the BusinessDevelopment and Syndications Department reports to the Vice President,Engineering, on energy matters 6 EffectiveJuly 1, 1989, Mr. Parry will become Divisional Manager, Department of Investments,Latn Amerca and theCaribbean l. Mr Ignacio D Maramba will replace him on September1, 1989 7. EffectiveJuly 1, 1989, Mr. TorsteinStephansen will hold the new position of IFC Adviser in Scandinavia (Dslo). 8. EffectiveSeptember 1, 1989, Mr Christopher Bam will occupy this position. 9. EffectiveSeptember 30, 1989. Mr. Kreuter will retire after 27 years with the Corporation. Mr G ovanni Vavcheliiwill occupy this position effective September 1, 1989

91 InternationalFinance Corporation

Headquarters Regional Mission in Jakarta Regional Mission in Western 1818 H Street, N.W. LIPPO Building, 3rd floor Africa Washington, D.C. 20433, U.S.A. JI. Rasuna Said, Kav. B-10 Corner of Booker Washington and Telephone: (202) 477-1234 Kuningan 12940 Jacques Aka Streets Telex: ITT 440098 P.O. Box 324/JKT Cocody RCA 248423 Jakarta, Indonesia B.P. Box 1850 WU 64145 Telephone: 5207316 Abidjan-01, C6te d'lvoire Cable: CORINTFIN Telex: 62141 Telephone: 44 32 44, 32 90 61 Fax: (202) 477-6391 Cable: CORINTFIN Telex: 28132 Fax: 5200438 Cable: CORINTFIN London Office Fax: 441687 New Zealand House, 15th Floor Regional Mission in Manila Haymarket Room 300, Multi-Storey Building Africa Project Development London SWIY 4TE, England Central Bank of the Philippines Facility (APDF) Telephone: 930-8741 Mabini, Manila 1818 H Street, N.W. Telex: 919462 Philippines Washington, D.C. 20433, U.S.A. Cable: CORINTFIN Telephone: 521-1664, 521-5507 Telephone: (202) 473-0508 Fax: 930-8515 Telex: 40541 Telex: 440098 Cable: CORINTFIN Fax: (202) 334-8632 Paris Office Fax: 5220156 66 Avenue d'Iena hnmeuble C.C.I.A., 17th Floor 75116 Paris, France Regional Mission in the 01 B.P. 8669 Telephone: 40-69-30-60 Middle East Abidjan-01, C6te d'Ivoire Telex: 620628 5 El Falah Street Telephone: 219697, 212303, Cable: CORINTFIN Mohandessin 216859 Fax: 47207771 Guiza, Egypttf Telex: 22264 Telephone: 347-3739, 347-8081 Fax: 216151 Tokyo Office Telex: 93110 I o Kokusai Building, Room 913 Cable: IFCAI PO Box 46534 1-1, Marunouchi 3-chome Fax: 347-3738 |

International Finance Corporation 1818 H Street, N.W. Washington, D.C. 20433, U.S.A.

0-8213-1312-6