ANNUAL REPORT .1 * 9 * 8 * 9

13331

Internai~onalFinaince

Corporation(4 8 W S A t > Qi !0,

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AIMS AND OBJECTIVES

The International Finance Corporation (IFC) is amultilateral development institution. An affiliate ofthe World Bank, IFC was established in 1956 to fur-ther economic growth in its developing membercountries by promoting productive private invest-ment. Its equity capital is provided by its 133 mem-ber countries-both developed and developing-which collectively determine its policies and activi-ties.

IFC's principal tasks are to provide and bring to-gether the financing, technical assistance, and man-agement needed to make good use of investmentopportunities in the developing world. IFC provideslong-term loans and risk capital without governmentguarantees to enterprises in the private sector. Its fi-nancial assistance is designed to fit the special re-quirements of its client companies and takes intoaccount their ability to raise funds from othersources on reasonable terms. In all of its activities,IFC works to raise investor confidence and employsits status as an international institution to facilitatethe process by which investors and governments ar-rive at mutually satisfactory agreements.

IFC also seeks to encourage the flow of privatecapital, both domestically and internationally, to de-veloping countries through the establishment or ex-pansion of capital markets and financial institutions.It offers technical assistance to member governmentsin support of their efforts to create an environmentthat will encourage domestic and foreign investment.

HIGHLIGHTS OF THE YEAR

1989 1988

New investments approved 90 95Total investments (gross) $ 1.7 billion $ 1.3 billionNet investments for IFC's account $ 1.3 billion $ 1.0 billionTotal project costs $ 9.7 billion $ 5.0 billionNet commitments fior IFC's account $ 1.2 billion $ 1.1 billionNet disbursements lor IFC's account $ 870 million $ 762 millionNet income $ 196.5 million $100.6 millionPaid-in capital $ 948 million $ 850 millionAccumulated earninigs $ 635 million $ 438 millionBorrowings for the year $ 845 million $ 747 millionTotal disbursed 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 to1 7 record levels.

Net income doabled for the third successive year, mainly because of19 substantial capital 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 its43 activities in corporate restructurings and privatizations.

The Africa Enterprise Fund, which will finance small and medium-size44 projects in Africa, began operations in March 1989.

46 The African M[anagement Services Company was launched in April 1989 toprovide training and short-term management assistance to African enterprises.

Acronyms

AEF Africa Enterprise FundAMSCo African Management Services CompanyAPDF Africa Project Development FacilityASEAN Association of Southeast Asian NationsCPDF Caribbean Project Development FacilityEC The European CommunityEMDB Emerging Markets Data BaseFIAS Foreign Investment Advisory ServiceIBRD International Bank for Reconstruction and Development (The World Bank)IMF International Monetary FundMIGA Multilateral Investment Guarantee AgencyOECD Organisation for Economic Co-operation and Development, comprising Australia,

Austria, Belgium, Canada, Denmark, Finland, France, Federal Republic ofGermany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, the Netherlands,New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, theUnited Kingdom, and the United States

OPEC Organization of Petroleum Exporting CountriesUNDP United Nations Development Programme

Abbreviations

BOT build-operate-transferbpd barrels per dayFY fiscal yearGDP gross domestic productGNP gross national productLIBOR London interbank offered ratemmcfd million cubic feet per daymtpd metric tons per daymtpy metric tons per yearMW megawatttpy 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 theoriginal currency or currencies of the investment, based on the exchange rate in effect onJune 30, 1989.

4. Figures given in this report in connection with investments may refer to the following:

(a) Approvals Loans, guarantees, or equity investments approvedduring FY89.

(b) Commitments Loans, guarantees, or equity investments for whichagreements were signed by IFC during FY89.

(c) Disbursements Loans and equity investments (including under-written 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 orequity participation and funds provided by otherinvestors and lenders.

6. In some tables, totals may differ from the sum of individual figures because of rounding.

TABLE OF CONTENTS IntemationalLetter to the Board of Governors 2 FinanceThe Five-Year Program and Fiscal Year 1989 Reviewed 3

Program Objectives and Outcome Compared 3 CorporationMain Activities of the Five-Year Program 4Fiscal Year 1989 in Review 6Looking Ahead 9 Annual Report

Investment Climate 11 1989Report on Operations 15

Investment Review 15The Portfolio 17

Financial Review 19

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

Capital Markets 37

Other Operations 40Syndications 40Fee-Based and Other Advisory Services 43Africa Enterprise Fund 44Africa Project Development Facility 45African Management Services Company 46Caribbean Project Development Facility 47Foreign Investment Advisory Service 48Technical 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 Reportprepared 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 theBoard of Govemors.

The Directors are pleased to report that in fiscal year 1989 IFC continued to expand its invest-ment and advisory activities in its developing member countries while further strengthening itsfinancial position. The Corporation reached a major milestone when its first public issue of debtsecurities was awarded AAA and Aaa ratings by the two leading rating agencies in the UnitedStates.

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

Board of Directors

Directors Alternates

Fawzi Hamad Al-Sultan Mohamed W. HosnyPaul Arlman Cvitan DujmovicMourad Benachenhou Salem Mohamed OmeishGerhard Boehmer Michael von HarpeFrank Cassell J.A.L. FaintE. Patrick Coady Mark T. Cox, IVJacques de Groote Bahar SahinMario Draghi Rodrigo M. GuimaraesJ.S.A. Funna Jabez A. LangleyJonas H. Haralz Veikko KantolaChang-Yuel Lim Robert G. CarlingAndre Milongo Jean-Pierre Le BouderRaymundo Morales Felix Alberto CamarasaJorge Pinto Francisco VanninilHelene Ploix Stephane PallezFrank Potter Clarence EllisMohd. Ramli Wajib Le Van ChauC.R.Krishnaswamy Rao Sahib M. Mustafizur RahmanMasaki Shiratori Yukio YoshimuraJobarah E. Suraisry Abdulaziz Al-SehailEduardo Wiesner Pedro Sampaio MalanZhang Junyi Jin Liqun

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

2

THE FIVE-YEAR PROGRAMAND FISCAL YEAR 1989 44

REVIEWED

1..

ISCAL year 1989 marks the completion of -

lFC's present Five-Year Program. Despitedifficult economic conditions in the devel-oping world, particularly during FY85-86,

most of the Program's objectives were achieved andsome were surpassed. IFC's growth over the period,supported by the doubling of its authorized capitalfrom $650 million to $1,300 million in December1985, has made the Corporation a significantlylarger and stronger institution, able to offer its devel-oping member countries a greater volume and vari-ety of services.

IFC is working with the Government of Gabon and project

PROGRAM OBJECTIVES AND sponsors to minimize disruption to the natural environment in

OUTCOME COMPARED connoction with the development of the Rabi-Kounga oil field.

This review left investment plans little changed, butThe FY85-89 Program called for the Corporation reonzdtesoe-ha-xetdicesso

to undertake more than 400 investments, at a total precognized the slower-than-expected increases of

cost for the account of IFC of $4,400 million. This project approvals in Africa and the energy explora-meantaverge aual gowthrate overthe ive-tion sector; a reduction in those two areas was coun-meant average annual growth rates over the five-

year period of over 20 percent in the volume of in- terbalanced by increases in Latin American andvestments approved and 7.5 percent in the number Caribbean projects, capital markets activities, andof projects. The underlying expectation was that corporate restructuring work. The expected levels ofIFC investment activities would expand strongly, in total disbursements over the five-year period, and ofline 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 bydeveloping 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 assetachieved its overall operational objectives in terms income more than offsetting reduced loan incomeof 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 almostnomic 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 yearsIFC's annual disbursements and levels of disbursed ($2.551 million) and the disbursed portfolio at theportfolio were adversely affected by prepayments of end of FY89 ($2,793 million) exceeded mid-termfixed-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 volumecific 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 andwas 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 havegram, 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 endexpectations by wide margins. Although loan in- of FY89. In FY84 IFC disbursed $212 million income 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 aboutthe original Five-Year Program. JIFC's paid-in capital 37 percent per year-from $2,092 million in FY84and accumulated earnings reached an above-target to $8,403 million in FY89-despite the reluctancefigure 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 aver-

age, IFC mobilized five dollars from other sourcesof 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 in-creased. The portfolio has benefited from closersupervision and the restructuring of a number ofcompanies in difficulty. The Corporation has also in-

3,000 - - _ _ _ troduced a variety of new lending instruments andpolicies to enable its clients to benefit from develop-ments in world financial markets. It broadened anddiversified the range of equity-type instruments of-

2,000 - - fered to its clients. In addition to continuing to takestraight equity positions, the Corporation has increas-ingly emphasized financing through equity-type in-struments including subordinated and convertible

1,000 g gloans, income notes, put options, and preferredshares.

Several special initiatives undertaken by IFC dur-igthe Five-Year Program 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 in-stitutions in developing member countries were ap-

Held for Others proved. In line with the goal of encouraging flows

of equity capital to developing countries, includingsome heavily indebted countries, IFC promoted vari-ous new types of international portfolio investment.

MAIN ACTIVITIES OF THE FIVE- It pioneered the successful development of privatelyYEARPROGRAM placed investment funds-like the Emerging Mar-

kets Growth Fund and the Emerging Markets 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 develop-ment approvals grew by 28 percent per year on aver- ment of country funds-like the publicly placedage. In FY84, IFC approved $391 million in Thai Fund, Inc. and the privately placed Equityinvestments of all types for its own account; in Fund of Brazil-which invest in the securities of aFY89, 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

OPERATIONSInvestments HeldNumber of firms 288 314 333 341 3Z9 366 377 409 454 468Loans 1,159 1,374 1,551 1,588 1,6z4 1,748 2,001 2,347 2,848 3,472Equity 245 273 284 294 3z-6 368 386 409 526 573Total 1,404 1,647 1,835 1,882 1,990 2,116 2,387 2,756 3,374 4,045

DisbursementsIFC's own account 190 292 246 228 238 266 325 328 762 870Participants 122 295 284 146 1Z.3 84 140 166 110 207Total 312 587 530 374 381 350 465 493 872 1,077

CommitmentsIFC's own account 402 347 300 218 355 354 513 742 1,098 1,207Participants 248 390 80 115 415 127 168 255 63 314Total 650 737 380 333 770 481 681 997 1,161 1,521

ApprovalsNumber of projects 55 56 65 58 (2 75 85 92 95 90Gross investments 681 811 612 845 696 937 1,156 920 1,270 1,709Total project costs 2,377 3,340 2,936 2,894 2,473 2,768 3,588 4,343 5,010 9,694

RESOURCES AND INCOMECapitalizationBorrowings 438 509 531 536 582 825 1,223 1,581 2,047 2,255Paid-in capital 307 392 497 544 5Z.4 546 602 722 850 948Accumulated earnings 140 159 181 204 23,0 258 284 338 438 635

EarningsNet 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 AEFkets 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 Companyformation on these markets previously unavailable (AMSCo) (p. 46), launched in April 1989, will givein one volume. Afri can 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 theority 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, previouslyrican countries, whose enterprises are often too provided as part of the Corporation's investmentsmall to be the object of direct investment by IFC. packages, began to be offered on an independentThrough two initiatives-the Africa Project Develop- fee-earning basis as well. IFC also advised govern-ment Facility (APDF) (p. 45), launched in coopera- merits of developing member countries on capitaltion with UNDP, the African Development Bank, markets development, privatization of public sectorand 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 directassistance to small and medium-size enterprises. For investment. Fee income from services increasedthree 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 sectorfor the five-year period, the Corporation succeededin establishing a credible presence in the industiy.In addition to supporting projects in oil and gas de-velopment, pipelines, and coal mining, IIFC partici- pated in oil and gas exploration ventures, using itsability to invest equity to encourage private compa- |nies to expand their activities in developing coun-tries. A total of 22 projects with costs of over$3 billion were approved. Loans and equity invest-ments for IFC's own account came to $385 million.

Dmuring the Five-Year Programn IFC began to sup-plement its traditional borrowings from the WorldBank by raising funds directly in the intermationalcapital markets. The Corporation made its debut inthese markets through a private placement in FY85. Its market borrowings began at $129.4 million inFY85 and rose to $595 million in FY89-,over 70percent of total bofrowings this year. The Corpora-tion has borrowed in a wide variety of capital mar-kets and has used new borrowing techniques,moving from the use of small private placements tolarger Euromarket club deals and finally to public is-sues supported by credit ratings. This broadenedmarket access enables InFC in turn to offer its clientsa wider range of financing instrumrents.

$IFC also began to offer variable-rate loans inFY85, having previously made loans for its own ac-count 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 tohedge against interest and exchange rate fluctuations.

FISCAL YEAR 1989 IN REVIEW

The Five-Year Programn ended in FY89 with an-other record year, in terms of the volume of new in-vestments approved and IFC's own financialperformnance. LFC approved 90 investmnents duringthe fiscal year with a total value of $1,709 millionand overall project costs of $9,694 million. IIFC mo-bilized $8,403 million in funds from other investorsand lenders for its projects in FY89: this means thatfor every dollar LIFC invested or lent other sourcesprovided $6.5. In FY88 the Corporation mobilized$3,971 million, or $3.8 for every dollar invested forits own account. Disbursements for IFC's own ac-count increased by 14 percent, to $870 million, andthe 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, whichyielded exceptional capital gains of $118.6 million,comp.ared with $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 major s iilestone for arFC in FY89 wasI j -~ the decision to apply for a rating for a public issue

~2 > ~of the Cofporation's debt securities and the confer-z ~~~~~~~~~~~~ral of a Aaa-rating by Moody's and a AAA-rating

by Standard & Poor's. This achievement is recogni-tion of IIFC's superior financial status. Access to thepublic securities markets will help to minimnizeIFC's funding costs while broadening significantly

A~ its investor base-advantages that are also expectedto benefit iFC's clients. Moreover, the ratings willhelp I.FC's fund mobilization efforts by confirming

_ i -~ },s parto tae commercial banking community that EpC suc-cessfully combines financial strength with its

broader developmental role.

- D : \ _ for ~~~~~~~~~~Te structuingsheurties Copranateionsance placin

vices Group during the year strengthened the13 h lCorporation's capacity to provide advisory services

in two important areas: the restructuring of poten-tially viable enterprises needing assistance in copingwithi a difficult economic environment; and theprivatization of public sector enterprises, as develop-ing member countries seek to increase the role ofthe private sector in their economies.

ALs part of a continuing effort to assist corpora-tion s in developing countries to raise capital on inter-national markets, a new hintemnational Securities

Group was established within the Capital MarketsDepartment. This Group will be responsible, in col-laboration with the regional investment departments,for structuring securities transactions and placingwit, dealers, brokers, and investors shares of enter-prises in IFC's developing member countries. IFChas already reached agreements with the authoritiesinJ.apan and the United Kingdom permnitting it toplace securities in those financial markets.

IFC' has invested in a number of agribusiness projects in Africa*.7 ' wS - ; * ' " in tecent years, such as the Gwembe Valley Development

Comnpany Limited, which is developing a 2,100-hectareirrigated farm to produce cotton for export and wheat fordomestic sale.

7

Technical assistance activities aimed at helpingprivate enterprises in developing countries stay com- An Environmental Case Studypetitive and profitable were expanded. Trust funds In FY89, IFC approved an oil development project intotaling $4 million were set up in collaboration with Gabon that could be expected to have a significantfive bilateral donor agencies in IFC 's developed impact on the environment. IFC worked closely with themember countries to finance technical assistance pro- Government of Gabon and the project sponsors, Shelljects. IFC also established a new Technology Ser- Gabon, Elf Gabon, and Socite Nationale Elf Aquitaine,vice to help enterprises acquire appropriate to help the project meet financial and operational targetstechnologies, from developed as well as from other while respecting environmental concerns.developing countries. The development of the Rabi-Kounga oil field will

Sub-Saharan Africa continued to be one of the necessitate the drilling of over 80 wells and the construc-Corporation's priorities: AMSCo and AEF, dis- tion of four gathering stations, a central processing

cussed aoeweebhlucestation, a 130-kilometer pipeline to Shell Gabon'scussed abve, whereb ed in FY89. AMSCo Gamba terminal, and a 270-kilometer pipeline to Elfwill manadresnth aned oF Africlanlow enther ori porbet- Gabon's Cap Lopez Terminal in the north of the country,ter management, and AEF will allow the Corpora- as well as the expansion of both terminals. Additionaltion to increase its financial assistance to small and infrastructure required by the project includes accessmedium-size African enterprises. In light of the roads; storage yards; living quarters; air, road, and watergreat demand for the services of APDF, which transport facilities; and telecommunications systems.began operations in July 1986, an extension of its The Rabi-Kounga field is located in an area of rainforestactivity in a second phase is now being considered. and swamp that is the habitat of several threatened plant

During the fiscal year, the Corporation approved species and over 40 mammal species considered endan-its first investment in Poland, which became a mem- gered. Part of the area is already protected 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 onlycountries; the Caribbean Project Development Facil- about the disruptive effects of construction, but also, inity opened an office in Barbados to make its ser- the longer term, about the potential consequences of

operational accidents and the environmental impact ofvices more accessible to entrepreneurs in thevictesmoe Cacsble increased settlement, farming, and hunting in the areaE"astern Caribbean. by workers. The sponsors consulted IFC, the World

IFC's projects must satisfy stringent environmen- Bank, the Government of Gabon, the World Wildlifetal standards, and an environmental impact assess- Fund, and the International Union for the Conservationment is frequently an integral part of the project of Nature and Natural Resources with a view to devel-appraisal process. In FY89, the Corporation ap- oping an environmental management plan. IFC consul-pointed an environmental adviser to ensure that pro- tants reviewed Shell Gabon's environmental impact as-jects conform with local environmental sessment, which included a detailed ecological studyrequirements, as well as with the World Bank's done by the University of Wageningen in 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 thecals, wildlands, resettlement, and worker health and project's environmental impact. One recommendationsafety. IFC provides advice to project sponsors to as- called for the development of a joint plan with thesist them in meeting World Bank guidelines in a Government to ensure protection of the area as a nationalcost-efficient manner and requires them to provide park. Shell Gabon prepared oil spill contingency andceportst-ef entironmann tan perenuires them tohprve lwaste management plans and appointed a full-time en-reports on environmental performance over the long v.omna spcals tooeseoeatosa.aiterm. It is now IFC policy not to support projects vironenta_speialis_to_verse_opeatios _atRabi

that are unable to comply with the Bank's environ-mental guidelines.

8

LOOKING AHEAD privaltization of public sector enterprises; improve-ment of the environment for private sector develop-

For FY90 and beyond the Corporation's Board ment and private investment; and research andpolicy studies laying the groundwork for future oper-

has adopted a rollmng three-year planning process, to:.W ilpa nipratrl nalowith 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 nacorpecosonrevlpigiemeocunrisshareholders-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 financialtary, and often overlapping, roles. The largest is its intermediaries in developing countries, the Worldtraditional investment role, involving the commit- Bank Group will seek to ensure that its activitiesment of IFC's own capital and borrowed resources. are consistent with the strategy of encouragingA particular effort will be made to increase equity grealter reliance 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 alsoother. 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 privatizationnamic and innovative ande make 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 servicesvide 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. IFCcome, 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. Theclientele attracted by the Corporation's financial and Corporation's new Corporate Finance Servicestechnical 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 theWorld Bank will achieve closer and more effective World Bank Group will be in the encouragement ofcooperation. During FY89 the report of the Private foreign investment to support development. In theSector Development Review Group, a body ap- course of FY89, IFC's Foreign Investment Advisorypointed 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 managementa number of distinguished outsiders, was completed. of both institutions (p. 48).It recommended increased assistance to the private In addition to operational collaboration, the Worldsector, with the Bank helping governments to create Bank and IFC will jointly undertake research andan "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 ofand institutions. Following this report, a Private Sec- the World Bank Group will complement a greattor Development Action Program was prepared. deal of day-to-day cooperation which already existsThe Action Program identified four areas in which between IFC and the World Bank and which willcollaboration within the World Bank Group (the gradually be developed between IFC and MIGA asWorld Bank, IFC, and MIGA) will be emphasized: MIGA's operations grow. It is expected that therefinancial sector development; restructuring and will be many cases in which investors participating

9

IFC's Impact on 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 inport of sound private sector initiatives is a key part of mobilizing close to $21 billion in additional financingthe 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 placedsuccess 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 20they were, in the main, profitable for the investors as similar funds sponsored by other institutions, whichwell 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 othermeasure of impact on national income) of 10 to 11 per- productive private sector businesses is of clear benefitcent 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 itfor 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 designingmany developing countries during this decade. The projects, choosing technologies, analyzing markets,earnings performance of IFC's investments reveals that dealing with environmental problems, keeping costsprofitability 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 EFC pro-not come about by chance. The Corporation invests only jects, leading other local businesses to make similarin projects that offer a satisfactory ex-ante economic rate investments. IFC's corporate restructuring projects haveof 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 ofing, technical, and financial skills are applied on a technical assistance and advice, have also contributed tocase-by-case basis; it is this feature, plus the fact that development. The oldest of these activities is technicalIFC 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 inaverage, 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 22panies benefit substantially from protection and subsi- countries, and ways to increase access to internationaldies. 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 growthpenalize 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 overvalued exchange rates tilateral Investment Guarantee Agency), the Africa andcombine to outweigh any financial assistance the pro- Caribbean Project Development Facilities, the Africajects may receive through subsidies or protection from Enterprise Fund, the African Management Servicesimports. Company, and the Technology Service.

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

10

INVESTMENT CLIMATE

Business Climate and Prospects

1988 was the sixth year of uninterrupted expan-sion in the industrialized countries, with strong eco-nomic growth, averaging 4.2 percent. Growth wasled by investment demand-a healthy sign-andwas widespread across countries. As 1992 ap-proaches, concern over "eurosclerosis" has givenway to a new impetus in the European Community.Growth of demand in the United States (the largestimporter of manufactured goods from the develop-ing countries) slowed slightly in late 1988, easing

fears of greater inflationary pressures. IFC provided advice on, and arranged financing for, anTrade performance was very strong during 1988, expansion program undertaken by the Philippine Long Distance

offering exceptionally good opportunities to busi- Telephone Company.nesses in developing countries. The volume of worldtrade 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 offactured goods did particularly well, building on the cornmodity prices has abated somewhat, perhapsexpansion of the four preceding years and increas- reflecting higher interest rates and slower growth ining 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, whilespecialize in labor-intensive products. Export busi- elsewhere exposure was reduced. In Latin America,nesses in the Latin American high-debt countries . .c

havebeenincrasinly sarin in arke groth.even creditworthy countries like Chile and Colombiahaveeenncreainglsharngi market 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-aother ecouragig develpment,income countries increase, owing largely to unset-Moodst-primar ncommoding pieselopendedtheir 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 fromcrease, reflecting high capacity utilization in the $13 billion in 1987 to at least $17 billion, and quitemanufacturing 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 havethe 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 ofvidual countries' experience varied, as a group non- most governments and continued striving amongoil 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, Costaofficial capital in total flows increased again in Rica, Ecuador, Kenya, Mexico, the Philippines, and1988-is not the most appropriate at a time when Thailand.many governments are encouraging more private sec-tor activity. Some countries have recently demon-strated, however, that improved economic Business Finance in Developing Countriesmanagement and liberalization of their markets, in-cluding capital markets, can attract more private cap- Even before the debt crisis, developing countriesital 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 ofTheir combined GDP grew by 5.1 percent (up from foreign conmercial bans pulling back from new4.5 percent growth in 1987). The newly industrial- lending. The vacuum this has created calls for gov-ized economies' GDP grew by 8.3 percent, India's ernments to focus on increasing domestic resourceby 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 willyears 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, aever, progress in the majority of middle-income number of which have been successful in providinghigh-debt countries continued to be thwarted by the more financing to private businesses. The debt crisisdrain of financial resources for purposes of debt ser- itself has made it more difficult in some countriesvice. 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 thefer of resources out of the private sector, which dis- private sector to service the public debt. This hascourages 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 inencing 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 ofhigh-debt countries (1.8 percent in 1988) failed to a problem in most developing countries than theykeep 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 more4.4 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 OECDwith 0.8 percent in 1987), well below the growth in countries this ratio is between 60 and 70 percent. Inpopulation. 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 thanflects considerable differences between groups of de- can be financed out of retained earnings. In others itveloping countries. In East Asia investment growth reflects poor profitability or government policieswas very strong, averaging over 12 percent per year that provide incentives for payment of dividends asand outstripping the 8 percent annual growth in compared to retention of earnings. Loans are theGDP. In all other regions, the share of investment in most important source of external financing and, forGDP 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 moreone-half of total investment. However, in recent dependent on the availability of credit at reasonableyears 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. ThisThe 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 withresult, more financing is required per unit of produc- convertible currencies should be encouraged, but ittive 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 investmentreasonably 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 thaton 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 bringsdomestic 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'san important source of corporate finance in India manufactured exports during the 1980s. Perhapsand 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 countriescharacterized by high inflation and high interest Conclusion and Outlookrates where corporations are minimizing debt andconcentrating 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 stillstocks to a bare minimum, and selling off assets. fairly favorable. Two important reasons are theCash-rich companies are acting like banks and are likely world economic expansion and the continuinglending 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. Actualtions, it requires considerable attention to financial prospects will continue to differ widely-they willmatters. The resulting diversion of managerial en- not be the same, for example, for firms operating inergy from production to finance is detrimental to the middle-income high-debt countries, where theeconomic 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 forrate instability continues to be a major source of firns in the fast-track countries where investmentproblems for corporations. Faced with the risk of and1 growth are high. Business prospects will con-sudden depreciation, which would increase their tinue to be difficult in sub-Saharan Africa; they maydebt burden in local currency, businesses are reluc- improve somewhat in the oil-exporting countries;tant to borrow foreign exchange, and this depresses and1 they will remain good in most Asian countries.the overall investment level. The financial markets The need for financing external to firms isdo not offer exchange risk cover for developing- greater in the developing countries where there iscountry 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 inFurthermore, the difficult physical and institutional many cases will depend to a considerable extent onenvironment 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 bankingindustrialized countries. In many countries financing flows to the developing countries continue to beproblems 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; thisshort-term interest rates, and a shortage of long- trend is well under way in an increasing number ofterm finance. The channeling of public aid flows to developing countries.private firms is not a good substitute for risk-based

14

E,500 CUMULATIVE INVESTMENT

APPROVALS FY85-89

REPORT ON OPERATIONS (US$ millions)

5,200* Cumulative

Yearly

INVESTMENT REVIEW 3,900

Approvals IDuring 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 mil-

lion 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 __ -Isubsequent 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 averageing and approval of new projects. A new system of life of six to seven years, including grace periods ofquarterly reports to the Board on the Corporation's about three years. The maturities of IFC's loans areprograms, portfolio, and finances was also initiated. set to conform with the nature and needs of eachThese 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'slization 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 thiscosts 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 TotalIFC for its own account in FY89, other investors orlenders (foreign and domestic) provided more than U.S. dollars 789 77$6.5 in loans or equity participations. This increase Deujtsche mark 138 13.5in the mobilization rate-in FY88 others invested or Swiss francs 89 9lent 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 en-

ergy projects. Wlhere IFC InvestedOf the total amount invested for IFC's own ac-

count 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 37standbys 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, whileIFC'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 fornotes, 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 orvolved 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 fundinglowed 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 automotiveand the Middle East, but increased in Latin America as well as machinery and equipment projects, had aand the Caribbean. The Corporation made its first in- 14 percent share of total investment volume. Energyvestment in Poland during FY89. projects, including oil development and exploration

ventures, accounted for 13 percent of approval vol-ume, and the mining and metal refining sector, with

Range of IFC's Investments two iron and steel projects, two gold mining pro-jects, 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

FY89 APPROVALS BY SECTORTimber, pulp Mining and

and paper metals Cement andTextiles 5 7 construction materials

manufacturingn

Food and NUMBER\ agribusiness Total 90

7

petrochemcals, and. fertilizers Tourism and

5 ~~~~~~~~~~~~~~~~~~~non-financialservices

_ l l | l l l l l l | _ ~~13Capital markets, development finance,

and financial services25 Mining and metals Cement and

Timber, pulp $200.91 construction materialsand paper $80$260.00 ~ nrgy

AMOUNT Textiles Food and(US$ millions) $58.21 agribusiness

Total = $1,708.50 $46b32

~~~~~~~~~ ~~~~~~~~Tourism andGeneral non-financial

manufacturing services$234.89 U$167.88Chemicals, petrocheicals Capital markets, development

and fertilizers 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 321Europe & Middle East 16 206 15 259Latin America & Caribbean 26 618 30 842Worldwide2 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 foranother 10 percent. The cement industry accounted Amount in US$ Millionsfor 4 percent. Finally, the agribusiness and food pro- Loans for IFC's account 3,472cessing sector represented 3 percent of IFC's ap- Equity for IFC's account 573proval volume-FY89 approvals in agribusiness Total IFC portfolio 4,045included cocoa, cotton, rubber, and palm oil pro- Tot:al disbursed 2,793jects-and textiles accounted for another 3 percent. ToiEal undisbursed 1,252

New commitments for IFC's own account inFY89 totaled $1,207 million, up slightly fromFY88. 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 millionin 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-halfAt~~~ ~~ the of new commitments were in Latin America. Aboutlio was composed of $4,045 million of loans and eq- one- commitments were in ma.ufuity 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 areworldwide in scope. At the end of FY88, the portfo- Disbursementslio, which contained 450 companies in 78 countriesin addition to two regional and two worldwide com- Total disbursements of $870 million for IFC'spanies, 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 dividendsportfolio grew by 24 percent to $2,320 million, and realized capital gains, rose dramatically towhile the disbursed equity portfolio grew by 14 per- $149.4 million in FY89, an increase of 209 percentcent 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 equityother investors. During FY89, $314 million was holdings in companies in which it had completed itscommitted 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 improvelion in FY89, an increase of 13 percent over FY88. the management and supervision of its portfolio andBoth interest and financial fee income were higher to restructure troubled investments. IFC benefitedthan in FY88, reflecting the increased size of the from the continuing growth of both the number andcommitted loan portfolio and an improved collection amount of its profitable equity investments. More-rate. over, it monitored its eq-

uity holdings moreCOMMITTED PORTFOLIO BY SECTOR closey, selings threm

(US$ Millions) closely, selling themwhen its participation in

Timber, pulp Mining and metals Cement and a project was no longerand paper $498.12 construction materials required. The Board of

Directors streamlined theTEGy procedures for sale of eq-

ta Fodlnduity investments to make~~~ >~~~~~ ~agribusiness it easier for the Corpora-

<•i $257.29 tion to turn over its port-

folio, freeing up resources

~~ A~~~>~~~ Tourism and for new investments.~~~~ ~~~non-financial

Genera ~~~~~~~~~~~~~~~~~~~~servicesmanufacturing $278.18

Caia arkets,Chemicals, petrochemical development finance,

and fertilizers and financial services$555.12 $752.98

18

200

NET INCOME

FINANCIAL REVIEW US$Millions

150

Highlights

In FY89 IFC had another year of record profitabil- 100ity; net income doubled for the third successiveyear. An important component of this year's resultswas the realization of capital gains on the sale of Imature equity investments. This was also the case inthe previous two fiscal years and reflects IFC's in- 50

creased focus on portfolio management during theFY85-89 Five-Year Program. The contribution of in-come from lending operations and dividends to earn- i i * I Iings was also significant. As capital gains on thesale of equity investments inevitably vary from year 1985 1986 1987 1988 1989

to year, it is not to be expected that the recent netincome figures will be repeated in the immediate fu-ture. However, healthy income levels reflecting the the previous record of $40.9 million in FY87. Thesesteady growth of operational net income are ex- gains were realized from the sales of mature equitypected 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 withgrowth 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, freeingits sources of income and responding to the varied up r esources for investment in new ventures. Theseand 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 duringit 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. DividendsPoor'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 growthIFC'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 ofcrease 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 activitiesand 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 wasin 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 Sources of Gross Income FY88 and FY89was 7.85 percent. The liquid portfolio derives partly (US$ millions)

from the proceeds of borrowings pending disburse-ment on IFC's loans and partly from capital, accu- FY88 FY89

mulated earnings, and reserves. In addition to Interest and financial fees 217.0 244.4ensuring the availability of resources for disburse- Dividends and profit participations 15.5 30.8ments, its highly liquid position enables IFC to time Realized gains on equity sales 32.9 118.6its funding operations to take advantage of market Service fees 11.8 25.3opportunities as they arise. From deposits and 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- 345.6 518.5istrative expenses increased by $5.2 million to$76.8 million.

Net provision for losses in FY89 was $59.6 mil-lion, compared with $40.4 million in FY88. Generalimprovements in the portfolio and recoveries of$22.2 million on previously reserved investments re- 900sulted in the total Loss Reserves declining to9.2 percent of the year-end disbursed and outstand- PAYMENTSing portfolio of $2,792.7 million. This compares US$ Millions

with 9.8 percent in FY88. FY89 saw the introduc-tion of the General Loss Reserve, which replacesthe previous Unidentified Loss Reserve and supple-ments the Specific Loss Reserve. The general

RECEIPTS 300FISCAL YEAR 1989US$ Millions

400 Repayments Administrative Financial Disbursementson Borrowings Expenses Charges

reserve is maintained at a level determined by IFC'smanagement after taking into account the historicalloss experience, the concentration of the portfolio,and other aspects of potential risk to that portion ofthe portfolio not covered by the Specific Loss Re-serve. These are risks which, by their nature, cannotreadily be determined from a review of the portfolioinvestments. As of the end of FY89, the Specific

Repayments Borrowings Income from and Sales 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 inFY89 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 Spanishfiscal year's net income, to $635 million. The peseta placements, for a total of Ptas 20 billion (theCorporation'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 milliontion, $164.9 nillion of IFC's subscribed capital has ($78.4 million equivalent). The proceeds of these

market borrowings were swapped for variable ratenot yet been paid in. dlasa trciesbLBRrtstrvd

The debt-to-equity ratio, which measures outstand- dollars at attractive sub-LIBOR rates to providefunding for the Corporation's variable rate lending.

cingtborrowing and gccmulartedesagaingst wasu1cod In the future it is intended that the Corporationcapital and accumulated earnings, was 1.34:1, com- shudrlcefontemktsorisbrwdpared 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 repre-senting 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 theCorporation's borrowing operations will be main-

In FY89 IFC further expanded the size and scope tained.of its funding operations, tapping new markets andusing new financing techniques. Of its overall fund-ing needs of $845 million, up from $747 million in Financial PoliciesFY88, the Corporation borrowed approximately$250 million from the World Bank on attractive and During the year the following three policies wereflexible terms under the recently revised Master app:roved by IFC's Board of Directors:Loan Agreement between the two institutions. These * limiting IFC's leverage, as measured by the ratioborrowings 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-equitythrough the borrowing strategy and techniques used, investments (net of reserves) to 100 percent ofcontributed 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'sbroadening spectrum of international capital markets net worth; andon 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 frombeginning to make public bond issues. The first the World Bank, sufficient to cover at least 65issue, for $200 million and carrying triple-A ratings, percent of the next three years' estimated netwas 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 aIBJ International Limited, Deutsche Bank Capital match funding policy that results in theMarkets Limited and J.P. Morgan Securities Ltd. Ccrporation's having in liquidity, or in undisbursedIFC's second public issue took place in the Daimyo amounts from the World Bank, sufficient resourcesmarket 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 behindgram. 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 threeIndustrial 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. PKbankenIBJ 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 GroupBankers 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) SwedbankCosmo Securities Co., Ltd. Swiss Bank Corporation Investment BankingCredit Suisse First Boston Ltd. S.G. Warburg SecuritiesCredit 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 SecuritiesDresdner 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 bedifficult. Many countries are still facing major eco- -a.nomic imbalances, which they are trying to reducethrough structural adjustment programs incorporat-ing significant policy reforms. A few countries haveovercome the initial problems inherent in such ad- .justments and have begun to demonstrate the capac-ity for sustainable economic growth. In many othersthe adjustment process is still in the early stages,,the prvadstmeinvstmces ias sotil inethe beal stares, In FY89 IFC approved investments in a number of fishing

projects in Africa, including a loan and equity package to helpspond. In a number of countries, reform programs finance the modernization program of Pcheries de Nossi-B inare either weak or non-existent. Madagascar.

Perceptions of the private sector's role in develop-ment are changing in much of Africa, however. In agrowing number of countries-including those proved significantly. In these countries, moderategrowhing stil ere ofcountries-including theopr seo- rates of inflation and relatively stable exchange rateswhich still rely on the state as the primary eco-haesiutdprveinsmntnsaladmenomic 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 Africanchange of attitude has resulted in the liberalization markcets.of economic policies, the reduction of controls on In countries where the needed adjustment effort

new pivat invstmet, ad th priatiztionof ahas yet to be initiated, investment opportunities andnew private investment, and the privatization of aecloicndtnsaegerlyeeirtn,i-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 toprograms often make the business environment exchlange rate imbalances are surfacing in somemore 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 annomic circumstances. Furthermore, measures aimed important effect on many African economies. Pricesat 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 ornesses 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 importantcreased input and debt-service costs caused by local agricultural commodities like cocoa and coffee havecurrency devaluations. In this kind of environment, had an adverse impact on the economies of produc-investors adopt a wait-and-see attitude before mak- ing countries.ing new investments or expanding operations. In thelong term, however, the success of such reformsshould increase the scope for private sector activity. Regional Initiatives

The investment climate in countries such asBotswana, Mauritius, and Swaziland, is favorable; Many African economies are small and offer fewin others, such as Morocco and Tunisia, it has im- opportunities for large-scale IFC projects. IFC's

23

FY89 Project Approvals in Africa

Gross ProjectCompany Country Activity Investment Cost

(US$ millions)

Red Sea Oil Exploration Program Ethiopia Energy 7.80 31.00Elf Gabon Gabon Oil development 10.00 352.00Shell Gabon S.A. Gabon Oil development 160.00 395.00Canadian Bogosu Resources Limited Ghana Mining 0.60 6.00Canadian Bogosu Resources Limited Ghana Mining 48.00 86.00Wahome Steel Ltd. Ghana Iron and steel 3.20 8.30Panafrican Paper Mills (E.A.) Ltd. Kenya Pulp and paper 15.00 40.20La Cotonniere d'Antsirabe (Cotona) S.A. Madagascar Textiles 1.50 6.50Les Pecheries de Nossi-Be, S.A. Madagascar Shriinp fishing and processing 3.71 14.50Compagnie Maritime Maroco-Norvegienne Morocco Shipping 6.30 12.40

(Comarit)Arewa Textiles, Ltd. Nigeria Textiles 6.00 12.00Mimi Fisheries Nigeria Ltd. Nigeria Fisheries 4.80 15.90Tiger Battery Company (Nigenia) Limited Nigeria Dry cell batteries 3.26 5.30Africamer, S.A. Senegal Fisheries 3.00 16.10Spintex Swaziland Ltd. Swaziland Textiles 3.62 22.20Tanganyika Sisal Spinning Company Ltd. Tanzania Manufacturing 2.00 5.90Zambia Hotel Properties Limited Zambia Tounsm 1.38 5.70

Sub-total 280.17 1,035.00Capital 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. Sincemedium-size ventures from which a stronger private it began operations in July 1986, it has receivedsector 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 phasecan invest from $100,000 to $750,000 in small and is now being considered.medium-size African enterprises with total projectcosts of $250,000-$5 million (see p. 44). Duringthe past year AEF conducted promotional missionsto Cameroon, C6te d'Ivoire, Ghana, Kenya, Nigeria, Highlights of the Year's ActivitiesSenegal, and Zaire to identify potential clients.

Another IFC initiative, the African Management During fiscal year 1989, total financing ofServices 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 thiswhich 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 loanfor 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-CUMULATIVE INVESTMENT gAPPROVALS FY85-89 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 fi-nance for, an expansion project that will allow the

400 r F company to process waste paper and pulp to satisfythe rapidly growing demand for paper in Kenya.

Too In Madagascar, the Corporation approved a loanof $3.56 mnillion and an equity investment of $.15millicn for Pecheries de Nossi-B6. The company isundertaking 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 trawl-ers. In Nigeria, IFC approved an equity investmentof $[.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 toappraised 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

an iadeqate inanialretun. Te Coporaionalso approved a loan of $3.0 million to Africamer, asought to meet these difficulties by concentrating on ,

promising sectors-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 modernizationrelated industries, such as mining, fishing, and agri- gan. *exansion oflAricaern l . .and-basedefatiesbusiness and food processing, and service industries, n xaso of. Aricmrsln-aeaiiisbucsinssiandgfood.proces , a e i e prinzipally to increase the value added to exports tosuch 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

vancesof $45 milion fr Candian ogosusectDr with a $6.3 million loan to the Compagnievances of $4.5 million for Canadian Bogosu Maotim MaooNrv.en (CMRT.hcResources Limited (CBRL), a gold-mining venture is owned by private Moroccan and 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 it to offer year-round ferry service betweenThe package includes a syndicated Eurocurrency abn Mo:rocco and Spain. A Norwegian bank took aloan of $43 million, of which $14 million is for $2 million p pain.patio n in l bC's loan.IFC's own account, and a loan from a European bi- Finally, I C played a major role in structuringlateral institution of $13 million. Gold sales are ex- and arranging the financing of the Rabi-Kounga oilpected to reach 140,000 ounces per year in 1991 field project in Gabon, a joint venture between Shelland 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 ShellGhana's mining sector since the country embarked Gabon and a loan of $10.0 million to Elf Gabonon its Economic Recovery Program in 1983. This and arranged for a group of 19 commercial banks toproject will be the first cooperative effort between participate in a syndicated loan of $110.00 millionIFC and MIGA, as one of the sponsors has applied to Shell Gabon. Production at Rabi-Kounga, whichfor 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'sTanzania 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 willjects-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 particularlystrong during the past year, and the investment cli-mate in the region continued to improve. Severalcountries, including China, Korea, and Thailand, reg-istered double-digit growth; India's GDP enjoyed itsbiggest increase-at around 9 percent-of the de-cade.

The factors contributing to South Asia's eco-nomic 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 domes-tic demand; rising domestic and foreign investmentconsequent to the relaxation of controls on private the region's more developed economies continued toinvestment; 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-orientedpattern of poor agricultural performance adversely economic policies, combined with a generally stableaffecting aggregate demand and industrial perfor- political environment, stimulated both local and for-mance. Prudent economic management in the re- eign private investment. Deregulation opened upgion, reflected in comparatively low inflation rates new opportunities for private capital in the serviceand 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 improvingto 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 allowingpolitical 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 forcultural sector did not carry over to industry and foreign investment substantially, as recent trends inservices. 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 changemore 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 inflationaryances. pressures.

Growth in East Asia was broad-based, with in-creases in exports, domestic consumption, and pri-vate investment. Under the combined pressure ofappreciating currencies and higher real wage costs,

26

Regional Initiatives INVESTMENT

APPROVALS FY8589

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 advi-sory services. Infrastructure financing involved boththe use of the build-operate-transfer (BOT) concept 800

and the support of the few private companies al-ready active in their respective fields. IFC approvedfinance for two BOT projects in the Philippines, 400

one in power generation and one in container portservices. Other infrastructure projects approved dur-ing 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 aprogram of making a limited number of small $50) million in loans and $148 million in equity instraight 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 toidly growing economies, such as Thailand, IFC Tata Iron and Steel Company Limited (TISCO) andbegan to use local commercial bank intermediaries, subscribed to a partly convertible public debentureenabling 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 installingaged 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 initiatedCorporation'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 materialprivatization 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 offeasibility study in Thailand. IFC also provided advi- $0.79 million in UCAL Fuel Systems Limited tosory services to a telecommunications company in help finance a plant for the manufacture of 110,000the Philippines in structuring a financial package twin barrel down draught type carburetors andand 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 mod-

ernization 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 util-ities. 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-cycleloans accounted for $246 million and equity invest- unit. The new unit will improve the reliability andments for $75 million. In FY88, IFC approved a efficiency of power supply to AEC's industrial andtotal of $306 million in financing for 29 projects in commercial users and relieve some of the supplyAsia. 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 tonies in 12 countries in Asia-$566 million in loans the city and suburbs of Bombay. The investmentand $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 Corporationute efficiently power from a new unit added to is guaranteeing loans of $8.06 million and taking anTEC'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, aquality and reliability of supply in TEC's licensed private contractor. ICTSI will manage, operate, andarea. 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 economystructure projects. Through two BOT projects, IFC recovers. IFC provided a loan of $70 million to helpoffered 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 byand 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 theings, a Hong Kong-based holding company. The country's debt moratorium made mobilization of200-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 ofippine company, at no cost. the Government's regional development plan. IFC

FY89 Project Approvals in Asia

Gross ProjectCompany Country Activity Investment Cost

(US$ millions)

Shenzhen-Chronar Solar Energy Co., Ltd. China Solar energy devices 3.00 10.20Ahmedabad Electricity Company Limited India Electricity generation and distribution 19.46 83.30Deepak Fertilisers and Petrochemicals India Chemicals and petrochemicals 2.80 40.00

Corporation LimitedGujarat State Fertilisers Company Limited India Chemicals and petrochemicals 27.05 280.00Tata Electric Companies India Electricity distribution 35.46 79.70Tata Iron and Steel Company Limited India Steelmnaking 39.11 122.00UCAL Fuel Systems Limited India Automotive components 0.79 7.50P.T. Agro Muko Indonesia Agribusiness 12.70 54.00P.T. Astra International Indonesia General manufacturing 37.50 117.00P.T. Jakarta International Hotel (JIH) Indonesia Tourism 1.25 15.50Gold Star Co. Ltd. Korea Electrical products 4.44 166.00Tong Yang Nylon Company, Limited Korea Textiles 1.59 25.00Pakistan Industrial Credit Pakistan Financial institutions 0.09 1.57

and Investment Corporation Limited'Thatta Oil Exploration Program Pakistan Energy 2.50 11.20Hopewell Energy (Philippines) Ltd. Philippines Power 11.10 40.00International Container Terminal Services, Inc. Philippines Transport 8.87 55.00Philippine Long Distance Telephone

Company (PLDT) Philippines Telecommunications 70.00 400.00Siam Commercial Bank Equity Agency Line Thailand Commercial/merchant banking 15.00 30.00Thai Farmers Bank Equity Agency Line Thailand Commercial/merchant banking 5.00 5.00

Sub-total 297.71 1,542.97Capital 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'sof 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 themercial 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 publicCo., Ltd. (SCSE) in China. The project reflects at a future date. IFC approved two other projects inIFC's efforts to promote the transfer of new technol- Indonesia: a $1.25 million rights subscription in theogies to developing countries. The company will Jakarta International Hotel, which achieved successmanufacture 300,000 square feet per year of photo- after a restructuring in which IFC played a majorvoltaic panels, which convert light into electricity. role; and a $12.7 million loan and equity packageSCSE 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 Indonesiawas approved for P.T. Astra International, a major with the privatization of a number of hotels that arelocal 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 im-plement majoir reforms in the structure of their econ-omies. The focus of these reforms is on liberalizingand deregulating trade, pricing, and foreign ex-change allocations; improving the environment for amore market-oriented, competitive productive sector;and strengthening the role of the private sector. Tourism projects in Turkey, like this 412-room hotel resort,Meanwhile, the three countries face, in varying de- have attracted IFC investment in recent years.

grees, substantial macroeconomic problems relatedto high external debt, wage and price inflation,growing unemployment, and potential social instabil-ity, all of which work against the reform process. Regional Initiatives

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 jointsector 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 thening the privatization of some state-owned enter- public sector, such as power generation (throughprises. 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 implementtracting 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 balancemanageable levels of external debt for several years. sheet restructuring. Because many of these countriesThe 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 investmentvate sector. climnate and 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 thistion 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 Easternmacroeconomic 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 reformn processchanges is a shift towards greater reliance on the pri- bears fruit in fostering the growth of private sectorvate sector as an engine of growth, as government and independent, market-based enterprises. IFC willresources become less available for new investmnent. use its expertise in structuring joint ventures that

30

900 In Turkey, the Corporation will continue support-CUMULATIVE INVESTMENT ing the efforts of private enterprises to introduceAPPROVALS FY85-89 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 oilsectors. 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 requireits assistance to proceed.

1985 1986 1987 1988 1989

E Cumu1688e1 Highlights of 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 marketsprolects. 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 inment 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 companiesloans 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 ProjectCompany Country Activity Investment Cost

(US$ millions)

Pannonplast Hungary Plastic molds 3.37 11.84Salgotarjan Glass Wool Ltd.' Hungary Insu]ation material 0.14 0.98Tetrapak Hungary Packaging material 8.88 48.00Centrala 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 81.00Kirklareli Cam Sanayii A.S. Turkey Glass 19.45 55.00Nasas-Aluminyum Sanayii ve Ticaret A.S.' Turkey Nonierrous metals 0.03 5.90Sanko Santral Konfeksiyon Sanayii ve Ticaret A.S. Turkey Textiles 6.11 14.00Santral Dikis Sanayii A.S. Turkey Textiles 7.12 15.10Sariville Turistik Tesisler A.S. Turkey Tourism 0.28 1.50Trakya Cam Sanayii A.S. Turkey Glass 55.50 141.70Bilquis Poultry Co. Ltd. Yemen Arab Pouliry 3.00 8.70

RepublicSozd Iskra Yugoslavia Electrical equipment 9.06 23.00Vojvodjanska Banka-Udrezena Banka Yugoslavia Banking 31.29 88.60

Sub-total 191.26 552.22Capital 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 HungaryThis 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 assistanceFY88. 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 machineCam Sanayii, the region's only float glass producer, tools. The joint venture is important for the efficientwhich 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 loanproject, 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 iing mill. Equipped with 400 looms and capable of Pszczelarskich (Hortex Cooperative Enterprises) thatproducing up lo 50 million meters per year of high- will facilitate the processing of high-quality fruitsquality 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 bywhere Turkey is already a strong exporter, into some 50,000 small-scale private farmers, is engagedweaving, 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 ANDTHE CARIBBEAN

Investment Overview

Most countries in Latin America continued toface severe economic constraints during 1988 andare finding it difficult to achieve even moderate eco-nomic growth. In fact, regional growth performancewas worse than in the previous year. GDP grew byonly 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 of1987. 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 syndicated bankfinance arranged byoutstanding went down, for the first timne since the IFC--has enabled Enka de Colombia, a leading manufacturer

of synthetic yarns and fibers, to embark on a three-yearbeginning of the debt crisis, from $443 billion at expansion program.the end of 1987 to about $428 billion at the end of1988.

Despite generally stagnant economic conditions, public enterprises. These countries are also activelyhowever, 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 anment 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 incmreased by 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 alsoand streamlined government procedures. Mecha-nisms such as debt-equity swaps have contributed in cinu to bimovsome 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 has sharply re-scarcity of medium- and long-term new credit, espe- due quniaieipotrsrcinsadtrfscially 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 theearnings and cut fiscal deficits, Bolivia, Chile, Costa necessary adjustment measures-including a majorRica, 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 Februaryfinancial 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 complexto 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 andapproximately 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 focusomy 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 theageable. economy. The Corporation made its first investment

in a downstream petrochemical project in the coun-try in FY89 and is considering other possible petro-

Regional Initiatives chemical investments. IFC also began to study acredit 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 withmediaries to small and medium-size companies. IFC strong export potential. In Chile, IFC concentratedis also pursuing opportunities in Mexico and else- its efforts on export-oriented investments in the min-

FY89 Project Approvals in Latin America and the Caribbean

Gross ProjectCompany Country Activity Investment Cost

(US$ millions)

Banco Frances del Rio de la Plata S.A. Argentina Commercial banking 15.00 30.00Chihuidos Oil Exploration Program Argentina Energy 4.95 32.40Compamiia Argentina de Petroleos S.A. (Astra) Argentina Petroleum! petrochemicals 25.00 97.00Compafimas Asociadas Petroleras S.A.(CAPSA) Argentina Petroleum 9.00 31.00Terminal 6 S.A. Argentina Transport 3.00 10.90Compafifa Minera del Sur S.A. (Comsur) Bolivia Non-ferrous mining 10.00 26.10Adiboard S.A. Brazil Electronics 7.50 31.90Aracruz Celulose S.A. Brazil Timber, pulp, and paper 20.00 1,024.00Eluma S.A. Industria e Comercio Brazil Non-ferrous mining 15.00 79.80Papel e Celulose Catarinense S.A. (PCC) Brazil Timber, pulp, and paper 15.00 173.00Petroquimica do Nordeste S.A. (Copene) Brazil Chemicals and petrochemicals 65.00 810.80Politeno Linear S.A. (Politeno) Brazil Petrochemicals 25.00 139.00Celulosa Arauco y Constituci6n S.A. (Arauco) Chile Timber, pulp, and paper 110.00 600.00Celulosa del Pacffico S.A. (CELPAC) Chile Timber, pulp, and paper 100.00 587.00Minera Escondida Limitada (Escondida) Chile Copper mining 85.00 1,143.20Frigorificos Colombianos, S.A. Colombia Services 0.18 0.18Promotora de la Interconexi6n de los Gasoductos

de la Costa Atlantica S.A. (Promigas) Colombia Utilities 10.00 34.70Fort Young Hotel Dominica Tourism 0.60 3.64Financial sector credit line' Jamaica Development finance 15.00 15.00Banca Serfin, S.N.C. Mexico Development finance 60.00 180.00Cementos Mexicanos (Cemex) Mexico Cement and construction materials 68.00 264.00Fomento 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 19.40Polipropileno de Venezuela Propilven, S.A. Venezuela Chemicals and petrochemicals 47.00 165.30

Sub-total 794.58 5,953.32Capital 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- 3,200CUMULATIVE INVESTMENT

tional resources from other investors. IFC's credit APPROVALS FY85VES-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 thebank's project economic analysis capacity. In linewith the new emphasis placed by the Governments 1,600

of Argentina and Bolivia on exploration for, and de-velopment of, mineral resources, IFC has approvedloans to Companias Asociadas Petroleras S.A. 800(CAPSA) in Argentina for primary and secondaryoil recovery, and to Compafmia Minera del Sur S.A. 1 9 1 X 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 corpo-rate 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 engi-neering expertise to small and medium-size privateMexican firms. The line will also support

DLuring fiscal 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. AAmerica and the Caribbean, including capital mar- $8milliondloanototesCmnto Mexcaos grukets 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 a1.3 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. Theuity. 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 Departmentsturing of the Visa Group, one of Mexico's largest in- resulted in the approval of a financial sector creditdustrial conglomerates, whose main activities of $15.0 million to three leading commercial andinclude 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 dollarloan was made to Visa's subsidiary, FEMSA), the reconstruction and expansion of Fort Young HotelCorporation 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 ladebt buy-outs, debt-debt swaps, debt-equity swaps, Costa Atldntica S.A. (Promigas) in Colombia for theand 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, thisuity 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 eto 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 Latinstrumental in raising additional funds for two new America's leading pulp and paper producers. IFCimportant 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 Petroquimicavoluntary 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 in-vesting $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. ThisS.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 andmajor 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 Surgram reflects the Government's new policy of dereg- S.A. (Comsur) in zinc, lead, and silver mining. Inulation and encouragement of private investments in Uruguay, the Corporation approved loan and equitythe 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-orientedscarcity of other sources of finance, IFC's participa- fruit and vegetable company.tion was essential.

36

CAPITAL MARKETS

FC's Capital Markets Department continues toassist countries in the development of their fi-nancial sectors. The Department's principal ac-tivities include 5.i a

* advising governments on how to establish fiscal, :legal, and regulatory frameworks that will sup- -/

port market-oriented financial sector develop-ment;

* investing in financial institutions in developingcountries-often the first of their kind in thelocal market-and providing them with technicalassistance and financing;

* increasing the access of developing membercountries to international financial 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 ofshares and bonds.

The primary role of capital markets is to mobilize for 15 capital markets projects in 12 countries assavings 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 EFC finance. These include a venture capitalThey provide the liquidity needed to set the prices fund for the Philippines; India's first nationwideof financial instruments, the facilities to buy and stockbrokerage firm; an acceptances company insell 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 participatedtial 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 Allwith 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 andsector. Banico General de Negocios in Argentina; each line

included an equity underwriting facility.In FY89 IFC promoted various types of projects

Highlight . the Year's Activitiedesigned to stimulate international capital flows. ForHighlights of the Year's Activities example, it co-managed a DM30 million medium-

tern private placement for Ram Dis Ticaret, theDuring 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 million20 capital markets projects, including 18 projects in syr,dicated backstop line for a European commercial13 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. IFCapproved $220 million in loan and equity financing sponsored, and participated in, the issue of two new

37

FY89 Project Approvals: Capital Markets

Gross ProjectCompany Country Activity Investment Cost

(US$ millions)

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

Finance Company Limited and TobagoRam Dis Ticaret (Ram) Turkey Euronote facility 7.58 16.50Turk Dis Ticaret Bankasi A.S. (Disbank) Turkey Eurocommercial paper program 60.00 60.00udc Ltd. Zimbabwe Leasing 0.33 2.50Emerging 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 Departmnent of 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 Basegeted 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, waspated. 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 atwo 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 securitiesCompany, 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 themarket development to governments in 30 countries. increasing demand of private sector users for theAs 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 thements, 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 tonancial press. he development of capital markets-for exam-

ple, the improvement of disclosure standards toprotect 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, inket 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 interm-and-risk profile of business ventures in develop- the use of debt-equity conversion programs anding 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'sSyndications Unit. Of the $1.4 billion of IFC loansapproved, the amount syndicated or pending syndica-tion was $398 million, compared with $148 millionin FY88. In FY89 13 syndication transactions wereundertaken, involving 64 participant institutions.

The loan portfolio administered by IFC for the ac-count of participants amounted to $923 million atthe end of FY89. During the Five-Year Program(FY85-89), 278 separate participation agreements,totaling $889 million, were signed with 123 banksand 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 Celulosa Arauco y Constituci6n SA. in Chile and invested$55 million for its own account. The construction of 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.TheCorpraton aprases achtance Telephone Company. This financing represents

project in depth and acts as lender of record, and te Telphone CmayThsfnanin r nnormally loan administrator, for the participant the Corporatilon's first new money syndication ibanks. Another factor in the growth of thethPilpneinsvrlya.Corps.Aortion sydcatorin activwtyha be the In Europe, the Syndications Unit assisted on twoCorporation's syndication activity has been the in- invtv aia akteatettascincrease in the average size of IFC projects over re- innovative Capital Markets Department transactionscent 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 millionzil, 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 throughshare 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 yhad three lead managers-Banque Nationale de Constituci6n S.A. in Chile, with participationsParis, The First National Bank of Chicago, and Bar- taken by banks in Finland, France, Norway, andclays Bank PLC-and 16 other participant banks Sweden, together with a DM30 million parallelfrom 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 greenfielda group of European banks for the Canadian pulp mill promoted by Compamifa ManufactureraBogosu 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, withwith 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 petrochemicalsdo 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 aCementos Mexicanos group, a leading Mexican group of French commercial banks.

Financial Institutions Participating in IFC Projects During FY89

Algemene Bank Nederland N.V. GotabankenAmsterdam-Rotterdam Bank N.V. The Industrial Bank of Japan, LimitedBanca Commerciale Italiana Irving Trust CompanyBanco Exterior de Espaiia Kuwait Asia Bank ECBanco Totta & Acores The Long-Term Credit Bank of Japan, Ltd.Banco di Roma Manufacturers Hanover Trust CompanyBank fur Gemeinwirtschaft AG The Mitsubishi Bank, LimitedBank of America N.T. & S.A. The Mitsubishi Trust and Banking CorporationThe Bank of Tokyo, Ltd. Monte dei Paschi di SienaBanque Francaise du Commerce Exterieur Morgan Guaranty Trust Company of New YorkBanque Indosuez NatiDnal Westminster Bank PLCBanque Intemationale a Luxembourg Nederlandsche Middenstandsbank N.V. - NMB BankBanque Intemationale de Commerce S.A. The Nippon Credit Bank, LimitedBanque Intemationale pour l'Afrique Occidentale S.A. Osterreichische Landerbank A.G.Banque Nationale de Paris Osterreichische Volksbanken A.G.Banque Paribas PKbankenBanque Regionale d'Escompte et de D6p6ts PoslipankkiBanque Sudamenis Privatbanken A/SBarclays Bank PLC Provrinsbanken A/SBayBank Boston, N.A. Rabobank NederlandBayerische Vereinsbank AG The Sanwa Bank, LimitedBergen Bank A/S Skandinaviska Enskilda BankenCaixa Geral de Dep6sitos Societ6 G6neraleCassa di Risparnio di Torino Standard Chartered BankCommerzbank AG The Sumitomo Bank, LimitedCredit Industriel et Commercial de Paris Swiss Bank CorporationCr6dit Lyonnais Swi.ss VolksbankCredit Suisse The Taiyo Kobe Bank, Ltd.Creditanstalt-Bankverein The Toyo Trust and Banking Company LimitedDG Bank - Deutsche Genossenschaftsbank Union Bank of Finland Ltd.The Dai-Ichi Kangyo Bank, Limited Union Bank of SwitzerlandDeutsche Bank AG The United Bank of Kuwait PLCDresdner Bank AG The Yasuda Trust and Banking Company, LimitedThe First National Bank of Chicago

41

ISr in hO ist>^ mbasruo.bbtM _n

oraniisba

SHELL 6iAUG14 Si.us $ 330,ooi,o0o

Project financing ftu devtdoment df the Rabi-Kounp Oil Field

-Seewrbolns- 1

Intemational Finance Corporation

V P lip' o .j11

Baiaaue Nationalb de Paris Barclays Bank PLC The First National 8anh f ChicaCgo dela p o !1

Credd Lynas Onineidioke LAndenbank AG. A.0mnda-R.dsb Sark NV San. di tOneia I

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42

FEE-BASED AND 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 techniquespanded its structuring and advisory services and with respect to the Philippines Plaza Hotel inbegun providing them independently of project fi- Manila.nancing to both governmental and private clients. * IFC advised the Government of Indonesia on theThe strong growth of IFC's advisory services contin- potential for privatizing a group of hotels ownedued 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 Omanlion 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.*The Corporation has initiated advisor services(CFS) was created as a specialized group within rpory

LFC to provide advisory services and financial assis- in response to a request from the Government oftance in corporate restructurings and privatizations, Nepal to provide support in the implementationenhancing 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 ofvestment role. Expertise in the specialized field of Japan on the financial structure and securityprivatization, 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 integratedjects. Through CFS, IFC can expand its corporate textile company now owned by the Government.

restructuring services, especially to private compa-nies facing high debt servicing burdens; such compa-nies often require recapitalization and operational Corporate Restructuringsimprovements before they can respond to market op-portunities 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 structuringcomponent 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, Fomentoout 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 LatinAmerica. The Corporation began a first-phase as-

Privatizations signment to design a restructuring scheme lastfiscal 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 Governmentturing 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 theproposed second Thai petrochemical complex.

The Corporation's Capital Markets DepartmentIn addition to privatizations and corporate restruc- unerpoo atnub ofptal assteproject

turings, IFC continues to provide advisory services cn ctionuwith theiWol ankidurng FY89.reurn amra ag f xets:i conjunction with the World Bank during FY89.requiring a broad range of expertise: Teepoet r ecie np 8

* IIFC is advising Yasar Group, one of Turkey's These proJeCtS are described on p. 38.largest diversified industrial and trading compa-nies.

* The Corporation advised Corporaci6n Venezol-ana de Guayana on the selection of a foreigntechnical partner for a pulp and paper mill. AFRICA ENTERPRISE FUND

* IIFC is advising Kobe Steel (Japan) in the devel-opment 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 ofducting 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/govern- ing small and medium-size projects that are tooment 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:hymutav ep-tests as other IFC projects: they must have the po-

Gambia Marine Products, a fish processing com- tential to be profitable; they must benefit the econ-pany in The Gambia.aIFC is assisting in the revision of the financial omy of the country in which they are located; and•~~~~. IF is asitn.ntervsino hiaca they must be technically sound.

plan of Zambia Hotel Properties Limited. hyms etcnclysudDuring a three-year trial period, AEF expects toIIFC helped Nigeria National Petroleum Corpora- invest up to $60 million in approximately 100 enter-tion identify possible joint venture partners.tionidenify ossble ointvenure artnrs.prises, helping entrepreneurs to 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 maypansion 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 theing. The client is Far Southeast Gold Resources, needs of its African clients, some decision-makingInc., a joint venture between Lepanto Consoli- functions for AEF projects have been delegated todated Mining Co. of the Philippines, and Galac- the field offices, which will work closely with localtic Resources Ltd. of Canada. financial institutions.

44

AFRICA PROJECT DEVELOPMENT Examples of APDF ProjectsFACILITY

BCiTSWANAYarley Cosmetics, sponsored by a Botswana woman

The Africa Project Development Facility (APDF) who has managed a chain of hairdressing salons, willidentifies promising African entrepreneurs and helps manufacture Afro Haircare Products in a new facility inthem to organize, diversify, or expand existing busi- Gaborone for both local and export markets. In accor-nesses or to start new ones. APDF advises these en- dance with the business plan developed by APDF, thetrepreneurs on the preparation of viable projects, $450,000 project received technical assistance fromworking with them until project financing has been Jolnson Products in the United States. It has created 15

new vJobs and additional exports for Botswana.secured, and provides partial funding for market,technical, or other feasibility studies that may be COTE D'IVOIREneeded. APDF is a UNDP project funded by UNDP, Pehazur, a fish processing company, received advicethe African Development Bank, a number of bilat- from APDF in structuring a viable long-term develop-

ment program and expanding and modernizing its exist-eral donors, and IFC itself. 1IFC iS the executing ing facilities to meet growing demand for its products inagency. the European market. A $2.1 million fish processing

During 1988, APDF prepared proposals and ob- facility was designed and equipped to comply with thetained financing for 28 projects in 13 different coun- EC's health and security standards. Financing was ob-tries. These projects, representing total investments tained from internal cash generation and fro.n aof $45 million, will help create over 2,000 jobs at a $ 700,000 medium-term loan by the Societe Generale derelatively lQw cost per job. B,mque de C6te d'Ivoire.

Since APDF began operations in July 1986, more MALAWIthan 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 Malawi as part of its privatization program, wasAPDF's services has outstripped expectations, and purchased by a Malawian entrepreneur. APDF providedAPDF's experience has demonstrated that the num- tie sponsor with a fair valuation of the farm, enablingber of African entrepreneurs willing and able to un- him to conduct informed price negotiations. The pur-bertofeAfricane sentoreprojenes wisllngeand.abletou- chase was funded through a USAID-assisted line ofdertake private sector projects is large. credit to the Commercial Bank of Malawi.

Despite its small size, APDF has already had apositive impact in Africa. As African countries make NIGERIApolicy adjustments designed to encourage their pri- After reviewing the original business plan of AfricanvateXsectors,APDF helps the continent's entrepre- A oses, a flower export project in Kaduna, APDF advisedvneur setors,ke advantage of thesepositivechanges. thle sponsor that the project should be modified to 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]huriums for the North American market. IFC identifiedable to make a substantial contribution to economic a technical partner, the French firm Meilland, for thedevelopment in Africa. $ 1.4 million project. Financing was provided by a con-

Fourteen countries have committed funds to sup- sortium of Nigerian banks headed by the local agricul-port APDF: Belgium, Canada, Denmark, Finland, tural development bank. Rose planting was begun on aFrance, the Federal Republic of Germany, Italy, pilot basis to identify the varieties best suited for pro-Japan, the Netherlands, Norway, Sweden, Switzer- (luction in Nigeria.land, the United Kingdom, and the United States.Brazil, India, and Israel have agreed to provideAPDF with technical assistance. UNDP providessubstantial 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 itsBoard of Directors. aclivities would be enlarged.

45

AFRICAN MANAGEMENT fnies from 20 different industrialized and developingSERVICES 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 itsDevelopment 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 needAMSCo 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 fillin 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 beAMSCo, which iS bemng implemented as a UNDP

AMSCo' which is being implemented as a UNDP a commercial, self-sustaining venture. A fund ofproject, represents a novel formula for bringing to- $7 million will be available to provide partial fi-gether public-sector funding and private-sector in-vestment and management expertise. AMSCo B.V. nance for management contracts with AMSCo investmnt ad mangemet exprtis. AMSo BXcases where companies cannot initiayl carry theirhas been incorporated in Amsterdam as a Dutch fcost. wherebcons toth indtilly made by

copn.Some 70 percent of its shares are held by full cost. Contributions to this fund will be made bycompany. Sm70pretoitshrsaeelby the Governments of Belgium, Denmark, Finland, theIFC and other financial institutions, including the Federnments of Germany, Denmarland, theAfrican 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's long-term objective of helpingCooperation (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 ofDeveloping Countries (DEG), the Netherlands' Fi- well-trained African nationals prepared to take overnance 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 theirdish 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 Governmentstion (CDC). The remainder of AMSCo's shares are of Belgium, Italy, the Netherlands, Sweden, andheld by more than 40 international private compa- Switzerland.

46

CARIBBEAN PROJECT February 1989, it opened a new Eastern CaribbeanDEVELOPMENT 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 deferredfind financing-both debt and equity-for private until adequate funding could be secured to ensuresector 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 governmentbankable and can tap local, regional, and intema- agencies in Europe have expressed an interest intional financial resources, CPDF fills a critical gap helping to finance this expansion, which is nowin 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 governmentpices 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, andjects, 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 agencieswere 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 BlueMountain coffee, raisefinancing for expansion and financialrestructuring.

V~~~

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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 ajoint service of IFC and the Multilateral InvestmentGuarantee Agency (MIGA) when MIGA began oper-ations in FY89. FIAS's mandate-to advise the gov- TECHNICAL ASSISTANCE ANDernments of developing member countries on TECHNOLOGY TRANSFERpolicies, programs, and institutions that have an im-pact on foreign direct investment-remains un-changed.

FIAS's activities expanded in FY89, as FIAS un- Technical Assistancedertook 14 advisory projects in as many countries,as well as four research projects, and set plans inmotion for four international or interregional confer- IFC seeks to contribute to the success of privateences on foreign investment issues. Ten of the advi- enterprises in the developing world by providingsory projects and two of the research projects were them with technical assistance to ensure that theycompleted during the year, and three of the confer- are financially, managerially, and technologicallyences were held. Although FIAS's work during sound. To support its efforts in this area, in fiscalFY89 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 andin 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 iscluding 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 managementtation of investment incentives (the Association of support, the TA funds enable IFC to develop promis-South East Asian Nations, Togo). FIAS also com- ing project proposals into bankable ventures and topleted 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 setture 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 inits advisory work. For example, research into the in- the box on p. 49, which were partially financed bycentive effects of debt-equity swaps has served so $1.5 million from the trust funds. One of the TAfar as the basis for advice to three countries on the projects laid the groundwork for a possible new IFCstructuring of debt-equity swap programs. A study initiative-a facility to help entrepreneurs in theon the effectiveness of investment promotion tech- South Pacific island countries develop private sectorniques was also completed during the year and ventures and obtain financing for them. Like IFC'sserved as the basis for two of the conferences organ- Africa and Caribbean Project Development Facilitiesized by FIAS in FY89. (see pp. 45 and 47), the South Pacific Facility will

FHAS's activities 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 theyneed to launch successful new ventures or to mod-

One of the Department's achievements in FY89 erni2e, expand, or diversify their operations. It canwas 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 developederation of solar-powered consumer products, mainly countries to the developing countries, but also fromfor 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 inAmerica 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 implementationexperimental basis in fiscal year 1989. Drawing on of technology transfers, which can be effected in athe 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- amonag others.

Nature of Activity Technical Assistance Projects Country

Sector Study -Tourism prospects South Pacific region-Automotive sector Global-Food preservation/processing technologies Global-Automotive sector Thailand

Project identification/ -Evaluation of gold minin g project GhanaPre-feasibility - Sewing thread project Egypt

- Year-round vacation resort India

Feasibility study! - Integrated transport system TanzaniaTechnical audit - Gold/copper mine Philippines

- Agribusiness diversification Nigeria- Export-oriented garment plant Honduras

Pilot plant -Metallurgical testing of iiew U.S. Peruprocess to convert gold/silverconcentrate to dore bars

Project rehabilitation - Integrated textile mill Honduras-Tungsten/tin mine Bolivia

Development -Facility to help entrepreneurs South Pacificof new initiative develop bankable project:s island countries

49

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

T o keep pace with the steady expansion of to serve part-time as Adviser to IFC in Scandinavia.its main business of financing private sec- Mr. Wilfried E. Kaffenberger assumed responsibilitytor projects in the developing world and of for IFC's advisory services in addition to his dutiesits 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'sthe 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 Specialwere created: the Corporate Finance Services Representative in Paris, after 27 years of dedicatedGroup; 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 willrica Enterprise Fund. A new position-Operations take up the position vacated by Mr. Kreuter, andAdviser-reporting to the Vice President for Invest- Mr. Christopher Bam will succeed Mr. Vacchelli asment 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 staffcame a joint venture of IFC and the Multilateral In- members on its payroll, compared with 523 onvestment 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 headquartersfield office in Casablanca, Morocco early in the fis- and in the field. In keeping with its internationalcal year and the Caribbean Project Development Fa- character, some 74 nationalities were represented oncility opened an office in Bridgetown, Barbados in the Corporation's staff, including persons from 56February 1989 to serve the Eastern Caribbean re- developing countries. More than 36 percent of IFC'sgion. managers and 43 percent of higher-level staff are

During the year, IFC mourned the death of Mr. from developing countries. Women currently occupyNaokado Nishihara, who gave invaluable service to 57 of the higher-level staff positions. The number ofthe Corporation as its Adviser in Tokyo (and later higher-level staff positions is expected to increase inas 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 itskets Department. Mr. Nicholas Noon, the personnel needs through advertisements placed inDepartment's Deputy Director, resigned to take a leading international journals and presentationsposition in the private sector in the United States; made at major business schools in Europe andhe 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, andment, replacing Mr. David Minch, who returned to Toronto and participated in World Bank recruitmentthe private sector in the United Kingdom. Mr. Pho missions to the Far East and the Middle East. IFCBa 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 areTorstein 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

International Finance CorporationAnnual Report 1989

Balance Sheet 52

Statement of Income 53

Statement of Cash Flows 54

Statement of Capital Stockand Voting Power 55

Notes to Financial Statements 56

Report of Independent Accountants 60

51

International Finance Corporation

Balance Sheet Exhibit AJune 30, 1989 and June 30, 1988In thousands of United States dollars-See Notes to Financial Statements, Exhibit E

1989 1988

ASSETS

Cash, deposits and securities-Note B ............................... $1,313,404 $1,278,202Receivables-Note C ............................................. 93,276 65,634Loan and equity investments disbursed and outstanding-Note D

Loan investments ............................................... 2,320,267 1,873,733Equity investments .............................................. 472,454 414,451Total investments ................................................ 2,792,721 2,288,184

Less: Reserve against losses ........ ............................. (257,927) (223,590)2,534,794 2,064,594

Net receivable from currency swaps-Note G .......................... - 2,036Other assets .................................................... 53,161 16,486

TOTAL ASSETS .............................................. $3,994,635 $3,426,952

LIABILITIES AND EQUITY

Liabilities:Payables and other liabilities-Note F .............................. $ 79,253 $ 74,090Borrowings withdrawn and outstanding-Note G

From market sources .......... ................................. 1,560,703 1,276,221From International Bank for Reconstruction and Development ........... 694,503 770,795Total borrowings ............ .................................. 2,255,206 2,047,016

Net payable on currency swaps-Note G ............................ 44,937Deferred income ............................................... 32,592 17,394

Total Liabilities ............................................. 2,411,988 2,138,500

Capital and Accumulated Earnings:Capital stock, authorized 1,300,000 shares

of $1,000 par value each-Note HSubscribed ................ .................................. $1,112,817 $1,085,208Less: Portion for which payment is not yet due ....................... 164,915 234,984

947,902 850,224Payment on account of pending subscription .......................... 67 33Accumulated earnings .......... ................................. 634,678 438,195

Total Equity .............. .................................. 1,582,647 1,288,452TOTAL LIABILITIES AND EQUITY ............................. $3,994,635 $3,426,952

52

Intemational Finance Corporation

Statement of Income Exhibit BFor the fiscal years ended June 30, 1989 and June 30, 1988In thousands of United States dollars-See Notes to Financial Statements, Exhibit E

1989 1988

INCOMEIncome from loan and equity investments:

Interest and financial fees-Note I ...................................... $244,357 $217,049Dividends and profit participations ...................................... 30,830 15,507Capital gains on equity sales .......................................... 118,616 32,949

Service fees . ....................................................... 25,303 11,765Income from deposits and securities ..................................... 101,517 67,691Translation (losses) gains net ........................................... (1,554) 582Other (losses) income .............. ................................... (574) 32

TOTAL INCOME ............... ................................... 518,495 345,575

EXPENSESCharges on borrowings .............. ................................. 184,649 132,545Administrative expenses ............. ................................. 76,827 71,586Provision for losses-Note D............................... ........... 59,635 40,389Contributions to special programs-Note J.................... ........... 900 500

TOTAL EXPENSES . ................................................ 322,011 245,020

NET INCOME ......... . $196,484 $100,555

53

International Finance Corporation

Statement of Cash Flows Exhibit CFor the fiscal years ended June 30, 1989 and June 30, 1988In thousands of United States dollars-See Notes to Financial Statements, Exhibit E

1989 1988

Cash flows from investing activities:Loan and equity disbursements ........ ............................ $ (870,045) $ (761,918)Loan repayments and equity redemptions ............................ 234,287 315,871Sales of loans and equity investments at cost ........ ................. 36,328 22,148

Net cash used in investing activities ........ .......................... (599,430) (423,899)

Cash flows from financing activities:Draw-down of IBRD borrowings and new issues ...... ................. 502,792 551,223Repayments on borrowings .......... ............................. (184,723) (88,769)Capital subscription payments ......... ............................ 97,680 128,644

Net cash provided by financing activities .............................. 415,749 591,098

Cash flows from operating activities:Net income . ................................................... 196,484 100,555Adjustments to reconcile net income to net cash provided by operatingactivities:

Provision for losses ............. ............................... 59,635 40,389Translation (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 provided by operating activities .............................. 227,866 83,878

Increase in cash, deposits and securities ............................. 44,185 251,077Effect of exchange rate changes on cash, deposits and securities .......... (8,983) 7,142Net increase in cash, deposits and securities .......................... 35,202 258,219Cash, deposits and securities at beginning of year ..... ................. 1,278,202 1,019,983Cash, deposits and securities at end of year ........................... $1,313,404 $1,278,202

Supplemental disclosure of non cash activities:Increase (decrease) resulting from exchange rate fluctuation:

Loans outstanding ............. ............................... (60,398) 3,641Cash, deposits and securities ........ ............................ (8,983) 7,142Borrowings and swap activities ........ ........................... (65,732) 9,269

54

International Finance Corporation

Statement of Capital Stock and Voting Power Exhibit DJune 30, 1989 and June 30, 1988In thousands of United States dollars

Capital Stock Voting Power Capital Stock Voting PowerAmount Percent Number Percent Amount Percent Number Percent

Members Paid of Total of Votes of Total Members Paid of Total of Votes of TotalAfghanistan ..... ......... $ 1i1 .01 361 .04 Liberia ....... I........... $ 83 .01 333 .03Antigua and Barbuda ....... 13 263 .03 Libya .................... 55 .01 305 .03Argentina ................ 19,205 2.03 19,455 1.98 Luxembourg .............. 1,078 .11 1,328 .14Australia ....... ......... 23,839 2.51 24,089 2.46 Madagascar ......... 11..... i .01 361 .04Austria .................. 9,943 1.05 10,193 1.04 Malawi .................. 853 .09 1,103 .11Bahamas, The ............. 142 .01 392 .04 Malaysa ................. 7,668 .81 7,918 .81Bangladesh .... . ........ 4,552 .48 4,802 .49 Maldives ......... I .... I.. 8 * 258 .03Barbados ................ 159 .02 409 .04 Mali ..................... 116 .01 366 .04Belgium ................. 24,702 2.61 24,952 2.54 Mauritania ................ 55 .01 305 .03Belize ................... 44 294 .03 Mauritiius ................. 736 .08 986 .10Benin ......... ......... 67 .01 317 .03 Mexicc ............... I.. 10,306 1.09 10,556 1.08Bolivia ......... ......... 841 .09 1,091 .11 Morocco ................. 4,552 .48 4,802 .49Botswana ................ 64 .01 314 .03 Mozarrbique .............. 182 .02 432 .04Brazil .......... ......... 19,885 2.10 20,135 2.05 Myanmar** .............. 666 .07 916 .09Burkina Faso .............. 432 .05 682 .07 Nepal ................... 306 .03 556 .06Burundi .................. 100 .01 350 .04 Nether ands ........ I ..... 28,273 2.98 28,523 2.91Cameroon ................ 885 .09 1,135 .12 NewZealand ............. 1,583 .17 1,833 .19Canada .................. 41,087 4.35 41,337 4.21 Nicaragua ................ 184 .02 434 .04Chile .......... ......... 4,552 .48 4,802 .49 Niger ............ I....... 131 .01 381 .04China ................... 8,122 .86 8,372 .85 Nigeria .................. 10,900 1.15 11,150 1.14Colombia ................ 4,073 .43 4,323 .44 Norway .................. 8,865 .94 9,115 .93Congo, People's Republic Oman .598 .06 848 .09

of the .................. 131 .01 381 .04 Pakistan ................. 8,626 .91 8,876 .90Costa Rica ............... 362 .04 612 .06 Panarra ................. 426 .04 676 .07C6ted'lvoire .............. 1,349 .14 1,599 .16 Papua New Guinea I ....... 490 .05 740 .08Cyprus .................. 1,077 .11 1,327 .14 Paraguay ................ 270 .03 520 .05Denmark ................. 9,347 .99 9,597 .98 Peru ................. I.. 1,777 .19 2,027 .21Djibouti .................. 21 * 271 .03 Philippines ............... 3,247 .34 3,497 .36Dominica ................ 18 268 .03 Polancl .................. 4,090 .43 4,340 .44Dominican Republic ........ 598 .06 848 .09 Portugal ................. 4,194 .44 4,444 .45Ecuador ................. 1,479 .16 1,729 .18 Rwanda ................. 306 .03 556 .06Egypt, Arab Republic of ..... 6,108 .64 6,358 .65 St. Lucia ................. 37 * 287 .03El Salvador ............... 11 261 .03 Saudi Arabia .............. 14,447 1.52 14,697 1.50Ethiopia .................. 33 * 283 .03 Senegal ................. 1,106 .12 1,356 .14Fiji ..................... 108 .01 358 .04 Seychelles ................ 15 * 265 .03Finland .................. 7,907 .83 8,157 .83 Sierra Leone ......... I .... 83 .01 333 .03France .................. 57,741 6.09 57,991 5.91 Singapore ................ 177 .02 427 .04Gabon .................. 664 .07 914 .09 Solomon Islands ........... 19 269 .03Gambia, The .............. 35 * 285 .03 Somalia .................. 83 .01 333 .03Germany 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 1.22Ghana ................... 2,242 .24 2,492 .25 Sri Lanka .............. I.. 3,594 .38 3,844 .39Greece .................. 3,051 .32 3,301 .34 Sudar . .................. 111 .01 361 .04Grenada ...... ........ 46 296 .03 Swaziland ......... I .... 404 .04 654 .07Guatemala ............... 598 .06 848 .09 Sweden .......... ....... 13,539 1.43 13,789 1.41Guinea .................. 294 .03 544 .06 Syriar Arab Republic ....... 72 .01 322 .03Guinea-Bissau ............. 18 * 268 .03 Tanzaiia ................. 724 .08 974 .10Guyana .................. 406 .04 656 .07 Thailand ......... ....... 4,837 .51 5,087 .52Haiti .................... 306 .03 556 .06 Togo . ................... 720 .08 970 .10Honduras ................ 184 .02 434 .04 Tonga 1.................. 13 * 263 .03Hungary ................. 4,253 .45 4,503 .46 TrinidadandTobago ........ 1,818 .19 2,068 .21Iceland .................. 11 261 .03 Tunisia ........... ...... 1,576 .17 1,826 .19India .................... 38,696 4.08 38,946 3.97 Turkev ........... . 5,985 .63 6,235 .64Indonesia ................ 14,375 1.52 14,625 1.49 Uganda ................. 735 .08 985 .10Iran, Islamic Republic of ..... 372 .04 622 .06 United Arab Emirates ....... 1,838 .19 2,088 .21Iraq ..................... 131 .01 381 .04 United Kingdom .. ....... 62,300 6.57 62,550 6.38Ireland .................. 650 .07 900 .09 United States .............. 206,885 21.83 207,135 21.11Israel .................... 1,076 .11 1,326 .14 Uruguay ......... I ....... 1,797 .19 2,047 .21Italy ..................... 37,215 3.93 37,465 3.82 Vanuatu .................. 55 .01 305 .03Jamaica ................. 1,893 .20 2,143 .22 Venezuela: ............... 13,895 1.47 14,145 1.44Japan ................... 49,954 5.27 50,204 5.12 VietlNam ................. 166 .02 416 .04Jordan .................. 633 .07 883 .09 Western Samoa ............ 20 270 .03Kenya ................... 1,529 .16 1,779 .18 Yemen Arab Republic ....... 272 .03 522 .05Kiribati .................. 7 * 257 .03 Yugoslavia ........... I .... 3,937 .42 4,187 .43Korea, Republic of ......... 4,791 .51 5,041 .51 Zaire . ................... 2,159 .23 2,409 .25Kuwait ................... 4,533 .48 4,783 .49 Zambia .................. 1,286 .14 1,536 .16Lebanon .... ............ 50 .01 300 .03 Zimbabwe ........ ....... 546 .06 796 .08Lesotho .................. 18 * 268 .03 TotalJune30,1989 $947,902 100.00t981,152 100.0ot

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

*Less than .005 percent.tMay differ from the sum of the individual percentages shown because of rounding.

*Formerly Burma.

55

International Finance Corporation

Notes to Financial StatementsJune 30, 1989 and June 30, 1988

NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING AND RELATED POLICIESThe 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 assets and liabilities principally on the historical cost basis and follows the accrual method of accountingexcept where noted otherwise.

The significant accounting policies are summarized as follows:

Financial Statement Presentation-Certain amounts in the prior year have been reclassified to conform to the current year's presentation.

Translation of Currencies-All assets and liabilities not denominated in United States dollars, with the exception of equity investments, are expressed inUnited States dollars atthe approximate market rates prevailing at June 30, 1989 and 1988. Equity investments disbursed in currencies otherthan UnitedStates dollars are expressed in United States dollars at the exchange rates which applied at the time of disbursement. Translation gains and losses arecredited or charged to income.

Investments-Investments are recorded at the date investment commitments are signed by the Corporation and are reflected as assets whendisbursed. Loan investments are generally reported as the principal amounts outstanding. Equity investments are carried at cost. Guarantees extended bythe Corporation assuring payment of principal and interest on debt issuances on behalf of commercial enterprises and other exposures relating to variouscontractual 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 asignificant and relatively permanent decline in value and an estimate of potential losses not specifically provided for. The reserve is established throughannual charges to income in the form of provision for losses on investments. Investments written off, as well as any subsequent recoveries, are recordedthrough the reserve.

Revenue Recognition-Dividends and profit participations are recorded as income when received in freely convertible currencies. Gains on sales ofinvestments are measured against the average cost of the investments sold 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 Corporationdoes not recognize income on loans where collectibility is in doubt and payments of interest and principal are past due more than sixty days unlessmanagement anticipates that collection will occur in the near future. Any interest which has been accrued on a loan placed in nonaccrual status is reversedout of the current income. Interest on nonaccrual loans is thereafter recognized as income only when actual payment is received. When interest notpreviously recognized is capitalized as part of a debt restructuring, such interest is recorded as deferred income and credited to current income only whenthe related principal maturity is received. Fees and costs associated with loan origination are recognized when incurred as the net of these amounts is notmaterial.

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. AtJune 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 Corporationclassifies the deposits and securities portfolio as an element of liquidity in the Statement of Cash Flows.

Currency and Interest Rate Swaps-The Corporation enters into various currency and interest rate swap arrangements for its own asset/liabilitymanagement. 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:At June 30

($ thousands)1989 1988

Cash $ 17,099 $ 5,327Time deposits and other obligations

of banks and financial institutions 890,348 467,717Government securities 405,957 805,158Total cash, deposits and securities $1,313,404 $1,278,202

NOTE C-RECEIVABLES

Receivables of the Corporation are summarized below:At June 30

($ thousands)1 989 1 988

Receivable from sales of deposits and securities $ 123 $ 5,572Accrued income on deposit and securities 14,460 6,841Receivable from purchasers of loan and equity investments 24,249 17,256Accrued income on loans 54,444 35,965Total receivables $93,276 $65,634

56

Exhibit E

NOTE D-LOAN AND EQUITY INVESTMENTS AND RESERVE AGAINST LOSSES

Investments approved by the Board of Directors to be held by the Corporation but not signed as investment commitments, and commitments signedbut on which disbursements have not yet commenced are as follows:

At June 30($ thousands)

1989 1988Investments approved but not committed

Loans $ 310,560 $ 523,110Equities 82,900 42,890

$ 393,460 $ 566,000Investments committed but not disbursed

Loans 1,151,891 974,182Equities 100,038 111,741

1,251,929 1,085,923Total approved 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 Netherlands Guilders $13,538Deutsche Mark 510,653 I uropean Currency Unit 12,071Swiss Francs 111,110 Pounds Sterling 6,123Japanese Yen 29,579 .Jamaican Dollars 1,409French 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 notrecognized in the current period on nonaccruing loans totaled $17.2 million ($21.7 million-1988). During the fiscal year ending June 30, 1989, theCorporation 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 June 30

($ thousands)

1989 1988Balance at beginning of year $223,590 $197,799Investments written off (25,449) (17,640)Investments recovered 151 3,042Provision charged to income 59,635 40,389Balance 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 withoutrecourse to the Corporation. The Corporation administers and services such loan participations on behalf of its participants. The Corporation called anddisbursed $207.3 and $109.6 million of participants' funds during the fiscal years ended June 30, 1989 and 1988, respectively At June 30, 1989 and1988 undisbursed participants' commitments were $183.3 and $197.1 million, respectively In addition the Corporation has arranged to place withparticipants $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 LIABILITIESPayables and other liabilities of the Corporation are summarized below:

At June 30($ thousands)

1989 1988Accounts payable and accrued expenses $26,407 $27,095Payable for purchase of deposits and securities - 7,283Accrued charges on borrowings 49,393 38,195Other liabilities 3,453 1,517Total payables and other liabilities $79,253 $74,090

57

International Finance Corporation

Notes to Financial Statements continuedJune 30, 1989 and June 30, 1988

NOTE G-BORROWINGS

The Corporation's borrowings outstanding from market sources and currency swaps are summarized below:

Market Borrowings Currency Swaps Net CurrencyPrincipal Amount Weighted Payable (Receivable) Obligations

($ millions) Average Cost ($ millions) ($ millions)June 30 June 30 June 30 June 30

1989 1988 1989 1989 1988 1989 1988US Dollars $ 657 $ 655 8.630/o $690 $337 $1,347 $992Deutsche Mark 148 159 6.520/o 48 41 196 200Japanese Yen 148 123 5.500/% (148) (123) - -Pounds Sterling 63 69 9.130/o (63) (68) - 1Swiss Francs 60 66 4.750/o (9) 3 51 69European 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 12Spanish Pesetas 226 68 12.06% (226) (68) - -

Finnish Markkaa 57 - 9.630/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 alien 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 isexecuted in order to recover the currency converted. Net payables on currency swaps of $45 million at June 30, 1989 result from exchange ratemovements 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 theswaps 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/o at June 30, 1989, in exchange for fixed rate payments,averaging 8.720/o at 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 Reconstruction and Development (IBRD) are summarized below. No currency or interest rateswaps have been entered into with respect to these borrowings. Principal and interest are payable in the currency borrowed.

Principal Amount Weighted($ millions) Average CostJune 30 June 30

1989 1988 1989US 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 millionrespectively 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 endedJune 30,1989 such fees aggregated $2.5 million ($2.2 million-1988).

58

Exhibit E

The principal amounts repayable on borrowings outstanding in all currencies during the fiscal years ending June 30, 1990 through June 30, 1994 areas follows:

($ millions)1990 1991 1992 1993 1994 Thereafter

Borrowingsfrom market sources $ 0.8 $ 0.9 $ 1.0 $506.4 $317.4 $ 734.5Borrowings 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

NOTE H-CAPITAL STOCKOn December 26, 1985 the Board of Governors approved a resolution increasing the authorized capital to $1,300,000,000. The resolution, as

amended, also allocated $650,000,000 for additional subscriptions by members dut ing a subscription period ending August 1, 1991. Members may electto pay subscriptions in full or in installments payable not later than August 1, 1991 or within six months thereafter.

NOTE I-INTEREST AND FINANCIAL FEESInterest and financial fees comprise the following:

Fiscal Years Ended June 30($ thousands)

1989 1988Interest income $224,403 $200,467Commitment fees 10,468 8,040Other financial fees 9,486 8,542Total interest and financial fees $244,357 $217,049

NOTE J-CONTRIBUTIONS TO SPECIAL PROGRAMSOn December 5, 1985 the Board of Directors approved a recommendation, modified on May 21, 1986, under which the Corporation will contribute a

total of $2 million to the Africa Project Development Facility. As of June 30, 1989 ths Corporation had contributed $1.5 million. The remaining amount of$500,000 will be paid during the fiscal year ending June 30, 1990. In addition the Board has authorized the Corporation to enter into a joint program withthe Multilateral Investment Guarantee Agency to support the Foreign Investment Adtisory Service (FIAS) activity. The Corporation's contribution to FIAS inthe fiscal year ended June 30, 1989 was $400,000. A further contribution of $400,000 will be made in the fiscal year ending June 30, 1990.

NOTE K-OTHER MATTERSStaff Retirement Plan-The International Bank for Reconstruction and Development (IBRD) has a defined benefit retirement plan covering substantially

all of the staff of the Corporation, the IBRD and the Multilateral Investment Guarartee Agency (MIGA). Under the Plan, benefits are based on years ofservice and average compensation, with the staff contributing a fixed percentage of pensionable remuneration, and the Corporation, IBRD and MIGAcontributing the remainder of the actuarially deterrnined cost of future Plan benefits. The total contribution is based upon the aggregate funding method.All contributions to the Plan and all other assets and income held for purposes of the Plan are held separately from the other assets and income of theCorporation, IBRD and MIGA and can be used only for the benefit of the participants in the Plan and their beneficiaries, until all liabilities to them have beenpaid or provided for. The total expense allocated to the Corporation for the fiscal yea' ended June 30, 1989 was $4,355,396 ($4,864,943-1988).

Service and Support Payments-The Corporation obtains some administrative and overhead services from the International Bank for Reconstructionand Development (IBRD) in those areas where common services can be efficiertly provided by IBRD. This includes shared costs of the Boards ofGovernors and Directors, and other services such as internal auditing, administratve support, office occupancy supplies and insurance. Payments forthese services are made by IFC to IBRD based on negotiated fees, direct chargeback and allocated charges where chargeback is not feasible. Total ofsuch expenses for the fiscal year ended June 30, 1989 amounted to $10.8 million ($10.2 million-i 988).

59

Financial Statements Covered by theReport of Independent Accountants Foregoing Report

Balance SheetStatement of IncomeStatement of Cash FlowsStatement of Capital Stock

Ah band Voting PowerPrice Waterhouse 0 Notes to Financial Statements

July26, 1989

President and Board of GovernorsInternational Finance Corporation

In our opinion, the financial statements appearing onpages 52 through 59 of this report present fairly, in allmaterial respects, in terms of United States dollars, thefinancial position of the International Finance Corporationat June 30, 1989 and 1988, and the results of itsoperations and its cash flows for the years then ended inconformity with generally accepted accounting principlesin the United States and International AccountingStandards. These financial statements are theresponsibility of management of the International FinanceCorporation; our responsibility is to express an opinion onthese financial statements based on our audits. Weconducted our audits of these statements in accordancewith generally accepted auditing standards which requirethat we plan and perform the audit to obtain reasonableassurance about whether the financial statements are freeof material misstatement. An audit includes examining, ona test basis, evidence supporting the amounts anddisclosures in the financial statements, assessing theaccounting principles used and significant estimates madeby management, and evaluating the overall financialstatement presentation. We believe that our audits providea reasonable basis for the opinion expressed above.

Washington, D.C.

60

APPENDICES

Governors and Alternates 62

Directors and Alternatesand Their Voting Power 64

Banking Advisory Panel andBusiness Advisory Council 65

The Year's Approvals 66

Investment Portfolio 76

Statement of CumulativeGross Commitments 89

IFC Management 90

61

Governors and AlternatesAs of June 30, 1989

Member Governor Alternate

Afghanistan ................... Hamidullah Tarzi ....... .............. Zalmai AhmadiAntigua and Barbuda ............... John E. St. Luce ....... .............. Ludolph BrownArgentina ........... ....... Jesus Rodrrguez ....... .............. Enrique Garcia VazquezAustralia ............ ....... PJ. Keating. ..................... Bob DunAustria .......... ......... Ferdinand Lacina ........ ............. Othmar HaushoferBahamas, The .................. Sir Lynden 0. Pindling .............. ....... Ethelyn C. IsaacsBangladesh .................. A.K. Khandker ...... ............... Enam Ahmed ChaudhuryBarbados ........... ....... L. Erskine Sandiford ......... ............ Winston A. CoxBelgium ............ ....... Philippe Maystadt ........ ............. Jean GodeauxBelize ....... ........... Dean Barrow ..... ................ Yvonne S. HydeBenin ....... ........... Simon Ifede Ogouma ........... .......... Saliou AboudouBolivia ........ .......... Fernando Romero ........ ............. Jacques TrigoBotswana ........... ....... PS. Mmusi ..................... Baledzi GaolatheBrazil ....... ........... Mailson Ferreira da Nobrega ..................... Elmo de Araujo CamoesBurkina Faso .................. Pascal Zagre ..... ................ Henri Bruno BessinBurundi ......... ......... Gerard Niyibigira ....... .............. Salvator NkeshimanaCameroon .............. .... Elizabeth Tankeu ....... .............. Simon Ngann YonnCanada ......... ......... Michael H. Wilson ........ ............. Margaret Catley-CarlsonChile ......... .......... Enrique Seguel Morel ........... .......... Pablo Ihnen de la FuenteChina ....... ........... Wang Bingqian ...... ............... Chi HaibinColombia ........... ....... Luis F. Alarc6n-Mantilla ............. ........ Francisco J. OrtegaCongo, People's Rep. of the ......... Dieudonne Diabatantou . ..................... Andre BatangaCosta Rica ................... Fernando E. Naranjo .......... ........... Eduardo Lizano FaitCote d'lvoire .................. Abdoulaye Kone ....... .............. L6on NakaCyprus ........ .......... George Syrimis ...... ............... Michael ErotokritosDenmark ........... ....... Uffe Ellemann-Jensen ........... .......... Ole Loensmann PoulsenDjibouti ......... ......... Mohamed Djama Elabe ................. .... Ahmed Samireh OmarDominica ......... _........ Mary Eugenia Charles.. Alick B. LazareDominican Republic ................ Roberto B. Saladin Selin ...................... Manuel E. G6mez PieterzEcuador ......... ......... Jorge Gallardo Zavala ........... .......... Edison Ortiz DuranEgypt, Arab Republic of ............. Kamal El-Ganzoury ......... ............ Maurice Makram-AllahEl Salvador .................. Remo Bardi Cevallos ..................... Mauricio Antonio GallardoEthiopia ............ ....... Wollie Chekol ...... ............... Seyoum AlemayehuFiji ... ............... J.N. Kamikamica ....... .............. Rigamoto TaitoFinland ........ .......... Erkki Liikanen ...... ............... Osmo SarmavuoriFrance ........ .......... Jacques de Larosiere ........... .......... Jean-Claude TrichetGabon .......... ......... Pascal Nze ..................... Jean-Felix MamalepotGambia, The ................... Saihou S. Sabally ........ ............. Mamour M. JagneGermany Fed. Rep. of .............. Juergen Warnke ....... .............. Hans TietmeyerGhana ........ .......... Kwesi Botchwey ....... .............. Kwesi Bekoe Amissah-ArthurGreece ........ .......... Panagiotis Roumeliotis .... ................. Yannis PapantoniouGrenada . ................... Herbert Augustus Blaize ...................... Lauriston F. Wilson, Jr.Guatemala .............. .... Rodolfo Paiz Andrade ........... .......... Oscar Pineda RoblesGuinea ........ .......... Edouard Benjamin ......... ............ Kerfalla YansaneGuinea-Bissau .................. Pedro A. Godinho Gomes ..................... Jose Lima BarberGuyana ......... ......... Carl Greenidge ...... ............... Winston MurrayHaiti ....... ........... Leonce F Thelusma .......... ........... Jacques VilgrainHonduras .................. Carlos Falck Contreras .............. ....... Gonzalo Carfas PinedaHungary .................. Imre Tarafas ..................... Tibor MelegaIceland ........ .......... Jon Sigurdsson ...... ............... Olafur R. GrimssonIndia ...... ............ S.B. Chavan ..... ................ G.K. AroraIndonesia ........... ....... J.B. Sumarlin ...... ............... Hasudungan TampubolonIran, Islamic Rep. of ................ Mohammad Javad Iravani ..................... Ali MajediIraq ....... ........... Hikmat Omar Al-Hadithi .............. ....... Subhi FrankoolIreland ........ .......... Albert Reynolds ...... ............... Sean P CromienIsrael ....... ........... Michael Bruno ...... ............... Yaacov LifshitzItaly ...... ............ Carlo Azeglio Ciampi .......... ........... Mario SarcinelliJamaica ......... ......... Seymour Mullings ....... .............. Harold W. MilnerJapan ........ .......... Tatsuo Murayama ....... .............. Satoshi SumitaJordan .......... ......... Taher H. Kanaan ....... .............. Mohammad H. Al-SaqqafKenya .......... ......... George Saitoti ...... ............... Charles S. MbindyoKiribati .......... ......... Teatao Teannaki ....... .............. Baraniko BaaroKorea, Republic of ................. Kyu Sung Lee ...... ............... Kun KimKuwait ........ .......... Jassim Mohamed Al-Kharafi ..................... Bader Meshari Al-HumaidhiLebanon ........... ....... Habib Abou-Sakr ........ ............. Raja HimadehLesotho ............ ....... Michael M. Sefali ....... .............. Tom Liphapang TuoaneLiberia .......... ......... Elijah E. Taylor ...... ............... G. Pewu SubahLibya ....... ........... Mohamed El Madni Al-Bukhari ..................... Bashir Ali KhallatLuxembourg .................. Jacques Santer ...... ............... Raymond Kirsch

62

Appendix A

Member Governor Alternate

Madagascar ....... ....... Pascal Rakotomavo ...... .............. Jean RobiarivonyMalawi .... .......... L. Chimango ....... ................ C.D. NthendaMalaysia ..... ......... Daim Zainuddin .......... ............. Zain AzraaiMaldives ..... ......... Fathulla Jameel .......... .............. Khadeeja HassanMali .... .......... Anthioumane N'Diaye ........................ Oumar KassongueMauritania ...... ........ Mohamed Ould Nany ................ ....... Mohamedou Ould MichelMauritius ..... ......... Beergoonath Ghurburrun ....................... Madhukarlall BaguantMexico .... .......... Pedro Aspe .J............... . ...... Jos Angel GurrFaMorocco ..... ......... Mohamed Berrada . ....................... Mustapha FarisMozambique ........ ...... Abdul Magid Osman ....................... Eneas da Conceicao ComicheMyanmarl ..... ......... D.O. Abel ...... ................. Min AungNepal .... .......... Bharat Bahadur Pradhan ........................ Lok Bahadur ShresthaNetherlands ....... ....... H.O. Ruding ....... ................ P BukmanNew Zealand ........ ...... Graham C. Scott ......... ...... . ...... Chris N. PinfieldNicaragua .............. Joaqufn Cuadra Chamorro ....................... Pedro Antonio Bland6n LanzasNiger ........ ...... Yahaya Tounkara ......... .............. Ali SaboNigeria .... .......... Chu S.P Okongwu ............. .......... Aliyu MohammedNorway ..... ......... Gunnar Berge ................... .............. Arne ArnesenOman .... .......... Qais Abdul-Munim Al-Zawawi ....... .............. Mohammed Bin Musa Al YousefPakistan ......... ..... VA. Jafarey ............. l.. . ............ zharul HaquePanama .............. Gustavo R. Gonzalez J ............. .............. Orville K. GoodinPapua New Guinea .............. Paul Pora ...................... .............. Morea VeleParaguay ..... ......... Enzo Debernardi ......... .............. Oscar Jacinto ObelarPeru .... .......... Cesar Vasquez Bazan ........................ Pedro Coronado Lab6Philippines ...... ........ Vicente R. Jayme . ....................... Solita C. MonsodPoland . .............. Zdzislaw Pakula ......... .............. Grzegorz WojtowiczPortugal ..... ......... Miguel Cadilhe ... .................... (Vacant)Rwanda ..... ......... Benoit Ntigulirwa .......... ............. Emmanuel NdahimanaSt. Lucia ..... ......... John G.M. Compton ............... ........ Dwight VennerSaudi Arabia ........ ...... Mohammad Abalkhail ........................ Hamad Al-SayariSenegal ..... ......... Djibo Laity Ka ... .................... Youssouf DiopSeychelles ...... ........ Danielle de St. Jorre ....................... Bertrand RassoolSierra Leone ........ ...... Hassan G. Kanu .......... ............. A.M. DohertySingapore ...... ........ Richard Hu Tsu Tau ............ ........... Lee Ek TiengSolomon Islands ........... ... Christopher C. Abe ............ ........... Leonard Palmer Maenu'uSomalia ..... ......... Mohamed Sheikh Osman ....................... Abdulkadir Aden MohamudSouth Africa ....... ....... G. PC. de Kock ........ ............... J.A. LombardSpain .... .......... Carlos Solchaga ......... .............. Mariano Rubio JimenezSri Lanka ..... ......... D.B. Wijetunge . ....................... R. PaskaralingamSudan .... .......... Omer Nour Eldaim ............ ........... El Sayid All ZakiSwaziland ...... ........ Andreas Fakudze ........... ............ Noreen N. MaphalalaSweden ..... ......... Kjell-Olof Feldt ........ ............... Lena Hjelm-WallenSyrian Arab Republic .............. Mohammed Khaled Mahayni ...................... Marwan KodsiTanzania ......... ..... Cleopa D. Msuya ........... ....... .... Simon MbilinyiThailand ..... ......... Pramual Sabhavasu ........................ Panas SimasathienTogo ......... ..... Barry Moussa Barque ........................ Kwassi KlutseTonga ......... ..... James Cecil Cocker .. ..................... Selwyn Percy JonesTrinidad and Tobago .............. Selby Wilson ..... ............. . ... William DemasTunisia .... .......... Mohamed Ghannouchi ....................... Zein MestiriTurkey .... .......... Namik Kemal Kilic . ....................... Mahfi EgilmezUganda ......... ..... Joshua Mayanja Nkangi ....................... Suleiman KiggunduUnited Arab Emirates .............. Hamdan bin Rashid Al Maktoum .................... Ahmed Humaid Al-TayerUnited Kingdom ........... ... Robin Leigh-Pemberton ....................... John Caines 2United States ........ .. ... Nicholas F Brady . ....................... Richard T McCormackUruguay ..... ......... Ricardo Zerbino Cavajani ......... ............... Ariel DavrieuxVanuatu ... ........... Sela Molisa ...... ........ .. ........ George PakoaVenezuela ...... ........ Miguel Rodriguez ............... ............... Eduardo QuinteroViet Nam ..... ......... Cao Si Kiem ................... ............... (Vacant)Western Samoa ........... ... Tuilaepa S. Malielegaoi . .......... .............. Kolone Va'aiYemen Arab Republic .............. Mohammed Saeed Al-Attar ........ ............... Kaid Mohammed Al-HirwiYugoslavia ...... ........ Branimir Zekan ........ ............... Boris SkapinZaire .... .......... Katanga Mukumadi ya Mutumba ................... Mbonga Magalu EngwandaZambia ..... ......... Gibson G. Chigaga ............ ........... Leonard NkhataZimbabwe ...... ........ B.TG. Chidzero ....................... K.J. Moyana

1. Formerly Burma.2. To be succeeded, effective July 1, 1989, by Timothy Lankester.

63

Directors and Alternatesand Their Voting Power Appendix BJune 30, 1989

Director Alternate Casting Votes of Total Votes % of Total

AppointedE. Patrick Coady ............... Mark T Cox, IV ................ United States ........... I........... 207,135 21.29Gerhard Boehmer .............. Michael von Harpe ............. Federal Republic of Germany ..... ...... 65,179 6.70Frank Cassell ..... ............ J.A.L. Faint ................ United Kingdom ..................... 62,550 6.43Helene Ploix ................... Stephane Pallez ................ France ............................. 57,991 5.96Masaki Shiratori ................ Yukio Yoshimura ........... .... Japan ............................. 50,204 5.16

ElectedMario Draghi .................. Rodrigo M. Guimaraes .......... Greece, Italy, Poland, Portugal .......... 49,550 5.09

(Italy) (Portugal)C.R. Krishnaswamy Rao Sahib .... M. Mustafizur Rahman ........... Bangladesh, India, Sri Lanka ..... ...... 47,592 4.89

(India) (Bangladesh)Frank Potter .. ..... Clarence Ellis ... ..... Antigua and Barbuda, The Bahamas,

(Canada) (Guyana) Barbados, Belize, Canada, Dominica,Grenada, Guyana, Ireland, Jamaica,St. Lucia ............... ........... 47,245 4.86

Jacques de Groote ............ Bahar Sahin . ...... Austria, Belgium, Hungary Luxembourg,(Belgium) (Turkey) Turkey ............................. 47,211 4.85

Jonas H. Haralz ....... ... Veikko Kantola .... ..... Denmark, Finland, Iceland, Norway,(Iceland) (Finland) Sweden ............................ 40,919 4.21

Jorge Pinto .. .... Francisco Vannini1 ............ Costa Rica, El Salvador, Guatemala,(Mexico) (Nicaragua) Honduras, Mexico, Nicaragua, Panama,

Spain, Venezuela ........ ........... 39,956 4.11Paul Arlman ..... ...... Cvitan Dujmovic ............... Cyprus, Israel, Netherlands, Yugoslavia ... 35,363 3.64

(Netherlands) (Yugoslavia)Eduardo Wiesner ........... Pedro Sampaio Malan ........... Brazil, Colombia, Dominican Republic,

(Colombia) (Brazil) Ecuador, Haiti, Philippines, Trinidad andTobago ............................ 33,156 3.41

Chang-Yuel Lim ..... .... Robert G. Carling ........... Australia, Kiribati, Korea (Republic of), New(Republic of Korea) (Australia) Zealand, Papua New Guinea, Solomon

Islands, Vanuatu, Western Samoa ........ 32,804 3.37Mohd. Ramli Wajib ............ Le Van Chau ... .... Fiji, Indonesia, Malaysia, Myanmar2, Nepal,

(Malaysia) (Viet Nam) Singapore, Thailand, Tonga, Viet Nam ... . 30,566 3.14Raymundo Morales ............ Felix Alberto Camarasa .......... Argentina, Bolivia, Chile, Paraguay Peru,

(Peru) (Argentina) Uruguay .... ...................... 29,942 3.08Fawzi Hamad Al-Sultan .......... Mohamed W. Hosny ............ Egypt (Arab Republic of), Iraq, Jordan,

(Kuwait) (Arab Republic of Egypt) Kuwait, Lebanon, Maldives, Oman,Pakistan, Syrian Arab Republic, UnitedArab 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, SierraLeone, Sudan, Swaziland, Tanzania,Uganda, Zambia, Zimbabwe ..... ...... 22,745 2.34

Jobarah E. Suraisry ............ Abdulaziz Al-Sehail ............. Saudi Arabia ........................ 14,697 1.51(Saudi Arabia) (Saudi Arabia)

Andre Milongo .... ..... Jean-Pierre Le Bouder ........... Benin, Burkina Faso, Cameroon, Congo(People's Republic of the Congo) (Central African Republic) (People's Republic 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 Mohamed Omeish ........ Afghanistan, Ghana, Iran (Islamic Republic(Algeria) (Libya) of), Libya, Morocco, Tunisia ............ 10,408 1.07

Zhang Junyi ....... ..... Jin Liqun ..... China ............................. 8,372 0.86(China) (China)

In addition to the Directors shown in the foregoing list, the following also served after October 31, 1988:

Director End of period of service:

Mitsukazu Ishikawa ............ June 7, 1989(Japan)

Robert B. Keating ............ May 18, 1989(United States)

Murray A. Sherwin ............ May 31,1989(New Zealand)

Note: South Africa (8,358 votes) did not participate in the 1988 Regular Election of Executive Directors.1. To be succeeded by Edgar Ayales (Costa Rica), effective July 1, 1989.2. Formerly Burma.

64

The Banking Advisoiy Panel Appendix CIFC's Banking Advisory Panel meets regularly with the Corporation's management to discuss IFC's activities and policies. The Corporation

wishes to express its appreciation for the valuable advice the panel members have given.

Abdiatif y Al-Hamad Director General Yusuk a Kashiwagi ChairmanArab Fund for Economic and Social The Bank of Tokyo, Ltd.

Development Tokyo, JapanKuwait Dr. Cc nrad Oort' Member of the Managing Board

Jan Ekman Vice Chairman Algemene Bank NederlandSvenska Handelsbanken Amsterdam, NetherlandsStockholm, Sweden Lord Roll of lpsden Chairman

Dr. Wilfried Guth Chairman of the Supervisory Board S.G. Warburg and Co. Ltd.Deutsche Bank A.G. London, EnglandFrankfurt, Federal Republic of Robeit V. Roosa Partner

Germany Brown Brothers Harriman and Co.Jean-Yves Haberer President New York, N. Y, United States

Credit Lyonnais Anthc ny Solomon ChairmanParis, France S.G. Warburg (USA) Inc.

New York, N. Y, United States

*Dr. Oort resigned from the Panel effective June 12, 1989.

The Business Advisory CouncilThe Business Advisory Council, which advises IFC's management on the needs and views of business and industry in connection with the

Corporation's activities, held its Annual Meeting in May 1989.

S. Babar Ali Adviser Carlo Patrucco Vice PresidentPackages Limited ConfindustriaLahore, Pakistan Rome, Italy

Thomas J. Bata Chairman of the Board Jose Pinera Executive ChairmanBata Limited Asset-Chile Ltd.Don Mills. Ontario, Canada Santiago, Chile

Sir Michael Caine Chairman Ronc Yiren ChairmanBooker plc China International Trust andLondon, England Investment Corporation

Suck-Rai Cho Chairman Beijing, ChinaHyosung Group Antoiio Ruiz Galindo, Jr. Formerly Chairman of DESCSeoul, Republic of Korea Sociedad de Fomento Industrial

Mustapha Faris President Director General Mexico D.F. MexicoBanque Nationale pour le Ismail Sabry President

Developpement Economique Societe Egypto-Francaise pour lesRabat, Morocco Industries Agro-Alimentaires

Javier l. Gamboa Chairman Cairo, EgyptAlpargatas S.A.I.C Ibrahim A. Salamah Vice Chairman and Chief ExecutiveBuenos Aires, Argentina Officer

Dr. Carl H. Hahn Chairman, Board of Management Saudi Basic Industries CorporationVolkswagen A.G. Riyadh, Saudi ArabiaWolfsburg, Federal Republic of Janko Smole Former Federal Minister of Finance

Germany Belgrade, YugoslaviaOlororun Michael C.O. lbru, OFR Chief Executive Paul Soppo Priso Director General

lbru Group Soppo PrisoLagos, Nigeria Douala, Cameroon

W Sidney Knox Chairman and Chief Executive JuliL s Tahija Chairman, Board of CommissionersNeal & Massy Holdings Limited P T Caltex Pacific IndonesiaPort of Spain, Trinidad Jakarta, Indonesia

Rahmi M. Koc Chairman, Board of Directors Tost io Takeuchi Senior AdviserKog Holding A.S. Toyo Menka Kaisha, Ltd.Istanbul, Turkey Tokyo, Japan

Keshub Mahindra Chairman Jean-Louis Vilgrain PresidentMahindra & Mahindra Limited Grands Moulins de ParisBombay, India Paris, France

Eugenio A. Mendoza President of the Corporate Paulo D. Villares Chairman of the Board andManagement Committee of the PresidentMendoza Enterprises Industrias Villares S.A.

Caracas, Venezuela Sao Paulo, BrazilTarrin Nimmanahaeminda President and Chief Executive Joseph B. Wanjui Chairman

Officer East Africa Industries Ltd.Siam Commercial Bank, Ltd. Nairobi, KenyaBangkok, Thailand Jairie Zobel de Ayala President and Chairman of the

Daniel Parker Formerly of Parker Pens Inc. Board of DirectorsCharleston, South Carolina, United Ayala Corporation

States Makati, Metro ManilaPhilippines

65

The Year's Approvals

Investments Approved IFC's Projectin Fiscal Year 1989 Investment Cost

(US$ millions)'

Argentina

Argentine Investment Company S.A. (A/C) will make direct investments in new equity and Loanquasi-equity issues of private Argentine enterprises, through the conversion of eligible Equity 2.10Argentine sovereign debt, with a view to long-term capital appreciation. AIC will be man- Quasi-equity -aged by Compania General de Inversiones S.A., a company in which IFC has also Syndications -invested. Total 2.10 34.40

Banco Frances del Rio de /a Plata S.A. (Banco Frances) will provide term financing to Loan 15.00medium-size enterprises through an IFC line of credit. Equity -

Quasi-equitySyndications -

Total 15.00 30.00

IFC has approved a line of credit and an equity underwriting facility which will be man- Loan 10.00aged by Banco General de Negocios S.A., * to help medium-size Argentine businesses Equity -seeking finance for capital investment projects. Quasi-equity

Syndications -

Total 10.00 20.00

Banco Roberts S.A. * will manage an agency line of credit and an equity underwriting line Loan 10.00provided by IFC to finance medium-size Argentine businesses and to support new equity Equity -issues in the Argentine stock market. Quasi-equity

Syndications -

Total 10.00 20.00

The Chihuidos Oil Exploration Program consists of seismic acquisition and the drilling of Loan -two wells in the Neuquen basin, a well-known oil-producing province. Provision has been Equity 4.95made for two appraisal wells in the event of success. Trend International is the operator; Quasi-equity -the other partners are independent U.S. oil companies and a local Argentine company Syndications -IFC holds a 15 percent interest in the venture. Total 4.95 32.40

Compahlta Argentina de Petroleo S.A. (Astra)* has a three-year investment program con- Loan 20.00sisting of oil field development, modernization and expansion of engineering services Equity -and petrochemicals, and distribution and retailing of related downstream products. Quasi-equity 5.00

Syndications -

Total 25.00 97.00

Comparlias Asociadas Petroleras S.A. (CAPSA) will increase oil production through pri- Loan 6.00mary drilling, secondary recovery well repairs, and electrification of facilities. Equity -

Quasi-equity 3.00Syndications -

Total 9.00 31.00

Terminal 6 S.A. * will expand its port storage capacity and unloading area, allowing it to Loan 3.00increase throughput by more than 50 percent. Equity -

Quasi-equitySyndications

Total 3.00 10.90

Bolivia

Compania Minera del Sur S.A. (Comsur) will modernize its facilities, develop additional Loan 7.00ore reserves, expand its mineral processing capacity, and explore for mineral resources Equity 3.00in joint ventures with other companies. Quasi-equity -

Syndications -

Total 10.00 26.10

Brazil

Adiboard S.A. will build and operate a greenfield plant to manufacture 120,000 square Loan 5.00meters per year of printed circuit boards for the electronics industry About 60 percent of Equity -the output will be sold as components of auto radios for export. Quasi-equity 2.50

Syndications -

Total 7.50 31.90

66

Appendix D

Investments Approved IFC's Projectin Fiscal Year 1989 Investment Cost

(US$ millions)'

Aracruz Celulose S.A. (Aracruz) will expand its existing capacity for manufacture oi Loan 20.00bleached eucalyptus pulp from 495,000 to 1,020,000 tpy The project includes the instal- Equity -lation of a plant that will manufacture chemicals used in the process and the purchase of Quasi-equitygenerator sets enabling the company to produce its own power Syndications -

Total 20.00 1,024.00

Eluma S.A. Industria e Comercio (Eluma) will rationalize and modernize its two production Loan 10.00facilities. Equity -

Quasi-equity 5.00Syndications -

Total 15.00 79.80

Papel e Celulose Catarinense S.A. (PCC) will expand its long-fiber pulp and paper mill Loan 15.00from 85,200 tpy to 182,000 tpy It will also redeploy some of its machines and change the Equity -bleaching system to relieve the existing overload on mill capacity Quasi-equity

Syndications -

Total 15.00 173.00

Petroquimica do Nordeste S.A. (Copene) will almost double its ethylene capacity and Loan 45.00increase its production capacity for all basic petrochemical products. The project Equity -includes a methyl tertiary butyl ether plant, the expansion of a utilities plant for dovin- Quasi-equity -stream industries, and a 600-km ethylene pipeline linking the project to a chloro- Syndications 20.00chemicals complex in a neighboring state. Total 65.00 810.80

Politeno Linear S.A. (Politeno) will construct and operate a plant to manufacture 130,000 Loan 18.50tpy of linear low-density polyethylene and high-density polyethylene. Equity 6.50

Quasi-equity -Syndications -

Total 25.00 139.00

Chile

Celulosa Arauco y Constituci6n S.A. (Arauco)* will construct a new 1 000-mtpd pU Ip line Loan 40.00to produce 350,000 mtpy of fully bleached softwood kraft pulp for export. Equity -

Quasi-equity 15.00Syndications 55.00

Total 110.00 600.00

Celulosa del Pacifico S.A. (CELPAC) will construct a new 900-mtpd pulp mill to produce Loan 40.00315,000 mtpy of fully bleached softwood kraft pulp for the export market. Equity 10.00

Quasi-equity -Syndications 50.00

Total 100.00 587.00

International Investment Company of Chile, the second debt-equity conversion ft nd Loan -established under Chapter XIX, Annex II of the national debt conversion program, is Equity 7.26managed by the Investment Management Company of Chile, which IFC also helped Quasi-equity -establish. The Fund will invest the proceeds from the conversions in listed Chileart Syndications -securities. Total 7.26 30.00

Minera Escondida Limitada (Escondida) will develop a large open-pit mine and support Loan 70.00facilities to produce and export 334,000 mtpy of copper in concentrates. Equity 15.00

Quasi-equity -Syndications -

Total 85.00 1,143.20

China

Shenzhen-Chronar Solar Energy Co., Ltd. will establish a plant in Shenzhen, Chira to Loan 2.00manufacture 1.2 megawatts or 300,000 sq.ft. per year of amorphous silicon photovoltaic Equity 1.00panels (solar energy devices), principally for export. IFC is a 20 percent shareholder in Quasi-equity -this project, which will transfer a new technology to China. Syndications -

Total 3.00 10.20

67

The Year's Approvals continued

Investments Approved IFC's Projectin Fiscal Year 1989 Investrment Cost

(US$ millions)'

Colombia

IFC's loan to Frigorificos Colombianos, S.A. * has been restructured and IFC has pro- Loanvided the company with an additional equity investment of $183,300 to save it from invol- Equity 0.18untary reorganization and bankruptcy Quasi-equity -

Syndications -

Total 0.18 0.18

Leasing Bolivar S.A. *2 made a new offer of shares in which IFC subscribed its pre- Loan -emptive rights. Equity 0.03

Quasi-equity -Syndications -

Total 0.03 0.03

Promotora de /a /nterconexi6n de los Gasoductos de /a Costa At/antica S.A. (Promigas)* Loan 10.00is a successful gas transporter in northern Colombia. It is expanding its pipeline network Equity -by building a series of small (2"-1 0") pipelines to make gas available to a number of Quasi-equitytowns in the northern and northwestern provinces. In addition to IFC's loan, the Andean Syndications -Development Corporation is considering a loan of $9.5 million. Total 10.00 34.70

Dominica

IFC has approved an equity investment of $600,000 to help finance the construction of Loanthe Fort Young Hotel, a $3.64 million, 53-room hotel. Equity 0.60

Quasi-equity -Syndications =

Total 0.60 3.64

Ethiopia

The Red Sea Oil Exploration Program consists of seismic reprocessing and acquisition, Loanone exploratory well, and, in the event of success, two additional wells. BP Petroleum, EquLity 7.80which holds 75 percent of this project, is the operator. IFC holds 25 percent. Quasi-equity -

Syndications -

Total 7.80 31.00

Gabon

IFC approved a loan to Elf Gabon and structured the financial plan for a joint venture by Loan 10.00Elf Gabon, Shell Gabon (see below), S.N. Elf Aquitaine, and the Government of Gabon to Equity -develop the Rabi-Kounga oil field. Quasi-equity

Syndications -

Total 10.00 352.00

IFC approved a subordinated loan and arranged a syndicated loan to Shell Gabon and Loanstructured the financial plan for a joint venture by Shell Gabon, Elf Gabon (see above), Equity -S.N. Elf Aquitaine, and the Government of Gabon to develop the Rabi-Kounga oil field. Quasi-equity 50.00

Syndications 110.00Total 160.00 395.00

Ghana

Canadian Bogosu Resources Limited* will develop the Bogosu gold mine to increase Loans 14.00gold sales to 100,000 ounces per year by 1991. IFC approved two equity investments in Equity 1.10the project as well as shareholder's advances, and arranged a financing package for the Quasi-equity 3.75production phase. Syndications 29.00

Guarantee 0.75Total 48.60 92.00

ContinentalAcceptances Limited, a new merchant banking firm, was established by IFC Loanin cooperation with Vanguard Assurance of Ghana and two African merchant banks to Equity 0.98meet the strong demand in Ghana for specialized professional financial services. Quasi-equity -

Syndications -

Total 0.98 3.51

68

Appendix D

Investments Approved IFC's Projectin Fiscal Year 1989 Investment Cost

(US$ millions)'

Wahome Steel Ltd. will establish a steel plant in Tema for the production of reinforcement Loan 2.70bars, wire rods, wire, and other steel products. Equity -

Quasi-equity 0.50Syndications -

Total 3.20 8.30

Hungary

With technical assistance from Wilden KG of the Federal Republic of Germany, Parnnon- Loan 2.54plast will use advanced computer-aided design and manufacturing technology to pro- Equity 0.82duce high-quality molds for the plastics processing industry Quasi-equity -

Syndications -

Total 3.37 11.84

IFC exercised its pre-emptive rights in Salgotarjan Glass Wool Ltd. *2 to maintain th 3 same Loan -level of ownership in the company in response to higher-than-anticipated project irnple- Equity 0.14mentation costs. Quasi-equity -

Syndications -

Total 0.14 0.98

Tetrapak, in a joint venture with the National Savings Bank of Hungary, will build a pack- Loan 6.23aging material plant with a nominal capacity of 500 million one-liter cartons for improving Equity 2.66the packaging of milk and fruit juices for the domestic market. Quasi-equity -

Syndications -

Total 8.89 48.00

India

Ahmedabad Electricity Company Ltd. will expand its generating capacity to 410 MW by Loan 19.46installing a new 100-MW gas-based combined-cycle unit. The new unit will improve the Equity -reliability and efficiency of power supply to commercial and industrial users in Ahrmeda- Quasi-equitybad and Ghandinagar. Syndications -

Total 19.46 83.30

Deepak Fertilisers and Petrochemicals Corporation Limited* asked I FC to exercise its Loan -pre-emptive rights in a convertible debenture issue of $40 million. IFC presently h lds Equity 2.801.15 million equity shares, which is equivalent to approximately 7.8 percent of the com- Quasi-equity -pany's equity share capital. Syndications -

Total 2.80 40.00

Gujarat State Fertilisers Company Ltd., currently India's sole producer of caprolactam, Loan 27.05the principal intermediate used in the manufacture of Nylon 6, will expand its cap olac- Equity -tam capacity of 25,000 mtpy by establishing a new 50,000-mtpy facility The facili :y will Quasi-equityalso produce 116,000 mtpy of the fertilizer ammonium sulphate. Syndications -

Total 27.05 280.00

JM Share and Stockbrokers Private Limited (JSB) is India's first nationwide stockbroker- Loan -age firm. Because of undercapitalization, Indian stockbrokers have been unable to Equity 0.55establish the infrastructure systems needed to serve clients in India's 15 regional stock Quasi-equity -exchanges. In cooperation with J.M. Financial and Consultancy Services Pvt. Ltc. Invest- Syndications -ment, IFC has capitalized JSB, which will be headquartered in Bombay, for this purpose. Total 0.55 3.90As a retail securities institution able to provide securities distribution, underwritinc,market-making, and portfolio management services throughout India, JSB will at empt toattract semi-urban communities to the capital markets.

Tata Electric Companies Ltd. will install overhead lines, underground cables, switch Loan 35.46gears, and transformers at three switching stations, which will augment the capacity of Equity -transmission lines and substations enabling them to distribute additional power more effi- Quasi-equityciently, reduce transmission losses, and enhance the quality and reliability of supply to Syndications -the city and suburbs of Bombay. Total 35.46 79.70

The Tata Iron and Steel Company Limited* will modernize its ironmaking facilities by Loan 17.81installing a one-million-mtpy blast furnace. The furnace will result in higher-qualitv hot Equity -metal, lower production costs, increased hot metal output, and additional revenL es from Quasi-equity 21.29scrap savings and sale of cast pig iron. Syndications -

Total 39.11 122.00

69

The Year's Appmvals cononued

Investmrents Approved IFC's Projectin Fiscal Year 1989 Investment Cost

(US$ millions)'

India (continued)

UCAL Fuel Systems Ltd., a joint venture between Mikuni Corporation, Japan, and Carbu- Loan -retors Limited, India, will manufacture 110,000 carburetors and 100,000 fuel pumps Equity 0.79annually for the domestic automobile industry These carburetors will be more fuel- Quasi-equity -efficient and less polluting than those currently produced in India. Syndications -

Total 0.79 7.50

Indonesia

PTAgro Muko will establish a new mixed plantation projectwith 5,700 hectares of oil Loan 10.50palm, 2,000 hectares of rubber and 800 hectares of cocoa, along with facilities for pri- Equity 2.20mary processing. Quasi-equity -

Syndications -

Total 12.70 54.00

PT Astra InteMational, Inc. (Astra) is embarking on an investment program to strengthen Loan 25.00its competitive position in the automotive and plantation sectors; it is also undergoing a Equity -gradual financial restructuring. I FC's investment in the closely held enterprise is a step Quasi-equity 12.50towards the company's eventual listing in the local stock exchange. Syndications -

Total 37.50 117.00

PT Jakarta International Hotel (JIH), * which is listed in the Jakarta Stock Exchange, Loan -made a new offer to the public in which IFC subscribed its pre-emptive rights. Equity 1.25

Quasi-equity -Syndications -

Total 1.25 15.50

Jamaica

A financial sector credit line, a joint effort of two of IFC's investment departments-Capital Loan 15.00Markets and Latin America and the Caribbean I-was approved. Three loans, for a total Equity -of $15.0 million, will be provided to three of Jamaica's leading commercial and merchant Quasi-equitybanks. These banks will provide foreign exchange financing for enterprises undertaking Syndications -rehabilitation investments in the aftermath of Hurricane Gilbert, as well as expansion and Total 15.00 15.00upgrading projects.

Kenya

Panafrican Paper Mills (E.A.) Limited* is increasing its capacity by installing a third paper Loan 15.00machine and a de-inking plant and expanding hs mechanical pulp mill. Equity -

Quasi-equitySyndications

Total 15.00 40.20

Korea, Republic of

Gold Star Company Ltd., * which is listed in the Korean Stock Exchange, made a new Loan -offer to the public in which IFC subscribed its pre-emptive rights. Equity -

Quasi-equity 4.44Syndications -

Total 4.44 166.00

Korea Investment and Finance Company* made two separate offers of shares in the Loan -course of FY89 in which IFC subscribed its pre-emptive rights. Equity 4.88

Quasi-equity -Syndications

Total 4.88 54.50

Tong Yang Nylon Company Limited,* which is listed in the Korean Stock Exchange, Loan -

made a new offer to the public in which I FC subscribed its pre-emptive rights. Equity 1.59Quasi-equity -Syndications -

Total 1.59 25.00

70

Appendix D

Investments Approved IFC's Projectin Fiscal Year 1989 Investment Cost

(US$ millions)'

Latin America (Regional)

The New World Investment Fund (NWIF) is a $62.50 million privately placed fund r ead- Loan -quartered in the United States and managed by Capital International Inc. It will allcw U.S. Equity 12.50institutions to invest in Latin American securities. Quasi-equity -

Syndications -

Total 12.50 62.50

Madagascar

La Cotonniere d'Antsirabe (Cotona)* will increase production of quality combed yarn Loan 1.50and fabrics for export by installing new combing and supporting equipment. Equity -

Quasi-equitySyndications _

Total 1.50 6.50

Les Pecheries de Nossi-B8 S.A. * will purchase three freezer trawlers and modern ze its Loan 3.56shore facilities to increase production and quality of the company's shrimp catch. Equity 0.15

Quasi-equitySyndications _

Total 3.71 14.50

Malaysia

The Malaysia Growth Fund is aimed at stimulating Japanese portfolio investment in LoanMalaysia. Established under Malaysian law, it is an open-ended unit trust with an nitial Equitythree-year closed-end period. It is managed by the Arab Malaysian Merchant Bank Quasi-equity(AMMB) with Nikko International Capital Management Co., Ltd. acting in an advis;ory Syndications _

capacity The Fund, which seeks long-term capital appreciation through investmE!nt Total - 45.25mainly in listed securities of Malaysian companies, is modeled on the successful IFC-sponsored Malaysia Fund, Inc., launched on the New York Stock Exchange in May1987.

Mexico

IFC's Multipurpose Credit Line to Banca Serfin, S.N.C. is an important segment cf IFC's Loan 60.00corporate restructuring initiative in Mexico. Serfin will provide funds-in the form of long- Equityterm loans, equity, or quasi-equity-and financial engineering expertise to small and Quasi-equitymedium-size private firms. The line may also be used to support privatizations ar d Syndications _

export-oriented sectors like mining, industry, agro-processing, and tourism. Total 60.00 180.00

A term loan of up to $100 million was approved for the Cementos Mexicanos (Cemex) Loan 60.00Group to help the company finance its modernization and expansion program. T he pro- Equitygram is expected to increase Cemex's operating efficiency and competitiveness in the Quasi-equityMexican and international cement markets. Syndications 8.00

Total 68.00 264.00

IFC played a central role in the restructuring of the Visa Group, one of Mexico's largest Loan 80.00industrial conglomerates, whose activities consist of the production of beverages,, distri- Equitybution, packaging, and food processing. In IFC's most significant corporate restructuring Quasi-equityeffort to date, the Corporation developed debt-reduction options, and also provided a Syndications _

loan to Visa's largest subsidiary, Fomento Mexicano Econ6mico S.A. de C. V (FEMSA). Total 80.00 455.00The Group's debt was reduced by about $1.3 billion to approximately $400 millionthrough debt buy-outs, debt-for-debt swaps, debt-equity swaps, and asset divestitures.The restructuring also reduced Mexico's foreign debt by close to $1.1 billion.

Morocco

Compagnie Maritime Maroco-Norv6gienne (COMARIT) will acquire a second sl ip, ena- Loan 4.30bling it to offer year-round ferry service across the Strait of Gibraltar between Spain and EquityMorocco. Quasi-equity

Syndications 2.00Total 6.30 12.40

71

The Year's Approvals continued

Investments Approved IFC's Projectin Fiscal Year 1989 Investment Cost

(US$ millions)'

Nigeria

Arewa Textiles, Ltd. * will modernize and rehabilitate existing equipment to reduce oper- Loan 5.88ating costs while maintaining quality Equity 0.12

Quasi-equity -Syndications -

Total 6.00 12.00

Mimi Fisheries Nigeria Ltd. will expand its shrimp and fish production capacity by 150 Loan 3.60percent through the acquisition of seven new fishing vessels and additional on-shore Equity 1.20transport facilities. Quasi-equity -

Syndications -

Total 4.80 15.90

IFC approved a guarantee facility for Tiger Battery Company (Nigeria) Limited* to cover Loanprincipal and interest payments on a line of credit from a local merchant bank to be used, Equityas required, to refinance payments due on IFC's existing loans. Quasi-equity -

Syndications 0.27Guarantee 2.99

Total 3.26 5.30

Pakistan

Pakistan Industrial Credit and Investment Corporation Limited (PICIC)*2 requested IFC's Loanparticipation in a rights issue in connection with a 25 percent increase in the Company's Equity 0.09paid-up share capital. The share issue was made to support the expansion of PICIC's Quasi-equity -industrial lending and diversification into other financial services. Syndications -

Total 0.09 1.57

The Thatta Oil Exploration Program*: Following encouraging results from the second well Loandrilled in the Thatta block, IFC made its second investment in this oil and gas venture as Equity 2.50part of the ongoing 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- Loantance in 1979 to make long-term funds available for the purchase of industrial equipment Equity 0.28to be leased by small and medium-scale enterprises. The capital increase approved in Quasi-equity -FY89 will support the expansion of AACL's leasing and merchant banking activities. Syndications -

Total 0.28 2.00

Hambrecht and Quist Venture Capital Fund is a $15 million venture capital fund that will Loanmake equity investments in small and medium-size enterprises in the Philippines. The Equity 2.42principal sponsors are Hambrecht and Quist International, one of the leading venture Quasi-equity -capital companies in the United States, IFC, and the Asian Development Bank. The Fund Syndications -will be managed by a separate management company Hambrecht and Quist Philippine Total 2.42 15.00Investments, which is 80 percent owned by Hambrecht and Quist International.

Hopewell Energy (Philippines) Ltd. has a 12-year agreement with the National Power Loan 10.00Corporation, a government-owned agency, to build, operate, and transfer a 200-MW Equity 1.10power plant using gas turbines. Quasi-equity -

Syndications -

Total 11.10 40.00

Intemational Container Terminal Services, Inc. (ICTSI) has a 25-year contract to manage, Loanoperate, and develop the Manila Container Terminal, a 69-hectare container port and Equity 0.81one of the three harbors in the port of Manila. Quasi-equity -

Syndications -Guarantee 8.06

Total 8.87 55.00

Philippine Long Distance Telephone Company (PLDT), * an IFC client since 1969, is Loan 30.00embarking on its fifth expansion program, which will add 130,000 new telephone lines Equity -throughout the country IFC assisted PLDT in structuring and mobilizing foreign currency Quasi-equity -financing totaling $154 million. Syndications 40.00

Total 70.00 400.00

72

Appendix D

Investments Approved IlC's Projectin Fiscal Year 1989 Investment Cost

(US$ millions)'

Poland

Centrala Spoldzielni Ogrodniczych i Pszczelarskich (Hortex Cooperative Enterprises) is Loan 14.76expanding its frozen fruit- and vegetable-processing facilities to produce high-quality fro- Equity -zen products for export to the Western European market. Quasi-equity

Syndications -

Total 14.76 56.90

Portugal

Finantia-Sociedade de Investlmentos, S.A. * made a new offer of shares in which IFC Loan -

subscribed its pre-emptive rights. Equity 0.25Quasi-equity -Syndications -

Total 0.25 1.70Senegal

Africamer, S.A. will modernize and expand its seafood processing facilities in Dake.r. Loan 3.00Equity -Quasi-equitySyndications -

Total 3.00 16.10

Swaziland

Spintex Swaziland Ltd. will establish a yarn spinning mill to produce cotton and cctton- Loan -and-polyester yarns for export. Equity 0.72

Quasi-equity 2.90Syndications -

Total 3.62 22.20

Tanzania

Tanganyika Sisal Spinning Company Ltd. will rehabilitate a sisal estate and expand a Loan 2.00spinning mill to diversify product lines. Equity -

Quasi-equitySyndications -

Total 2.00 5.90

Thailand

Siam Commercial Bank will provide matching equity financing for medium-size Thai Loan -enterprises with the $15 million equity agency line established by IFC. Equity 15.00

Quasi-equity -Syndications -

Total 15.00 30.00

Thai Farmers Bank will provide matching equity financing for small Thai enterprises with Loan -the $5 million equity agency line established by IFC. Equity 5.00

Quasi-equity -Syndications -

Total 5.00 5.00

IFC acted as a sponsor and co-lead underwriter in establishing The Thai Prime hfnd Lim- Loan -ited, a $155 million closed-end investment company incorporated in Singapore and Equity -quoted on the International Stock Exchange in London and the Singapore Stock Quasi-equity -Exchange. The Fund's principal objective is to make long-term investments in listed Thai Syndications -companies. Underwriting 15.50

Total 15.50 155.00

Trinidad and Tobago

The financial restructuring and privatization of Trinidad and Tobago Development Loan -Finance Company Limited will reduce, over time, the Government's share in the com- Equity 0.47pany and allow the company to expand the range of its operations and improve its port- Quasi-equity -folio. IFC subscribed equity capital and provided a guarantee on a local-currencv bond Syndications -issue privately placed with local financial institutions. Guarantee 4.68

Total 5.15 7.30

73

The Year's Approvals conud

Investments Approved IFC's Projectin Fiscal Year 1989 Investment Cost

(US$ millions)'

Turkey

Isko Tekstil Sanayi ve TicaretA.S. will build a 400-loom weaving mill in Inegol. The project Loan 32.27represents an important step in the diversification program of the Konukoglu Group, Equity -whose main activity is in spinning. It will produce cloth primarily for domestic manufactur- Quasi-equityers of garments for export. Syndications -

Total 32.27 81.00

Kirklareli Cam Sanay#iA.S. * will expand its glass tableware manufacturing facilities by 75 Loan 19.45percent to 22,200 tpy (104 million pieces), to serve the domestic and export market. Equity -

Quasi-equitySyndications -

Total 19.45 55.00

IFC exercised its pre-emptive rights in the share capital increase of Nasas Aluminyum LoanSanayii ve Ticaret A.S. *2to support the company's efforts to improve its financial struc- Equity 0.03ture by increasing equity and reducing reliance on short-term bank loans. Quasi-equity -

Syndications -

Total 0.03 5.90

IFC co-managed with J.R Morgan a DM30 million note issue-the first of its kind for a Loan 2.75Turkish company-for Ram Dis Ticaret (Ram), a member of the Koc Group. The pro- Equity -ceeds will be used for export financing and will be on-lent to other exporting companies Quasi-equityin the Group with foreign currency needs. The success of this issue should increase Syndications -access to capital markets not only for Koc, but also for other Turkish companies, diversify- Underwriting 4.84ing their sources of foreign currency funding and lowering their borrowing costs. Total 7.59 16.50

Sanko Santral Konfeksiyon Sanayii ve Ticaret A.S. plans to double its trouser capacity to Loan 6.11about 1.2 million pieces per year and to add a new line to produce 315,000 jackets per Equity -year for export. Quasi-equity

Syndications -

Total 6.11 14.00

Santral Dikis SanayiiA.S., a 75:25 joint venture between Coats Viyella pic. of the United Loan 7.12Kingdom and several Turkish shareholders, will expand its sewing thread capacity to Equity -2,000 tpy, to support Turkey's growing export-oriented garment industry. Quasi-equity

Syndications -

Total 7.12 15.10

IFC's investment will enable Sariville Turistik TesislerA.S. to expand the scope of a resort Loanhotel project and complete the project on schedule. Equity -

Quasi-equity 0.28Syndications -

Total 0.28 1.50

Trakya Cam Sanayii A.S. * will double its float glass capacity to 380,000 mtpy. The com- Loan 32.98pany which IFC helped establish in 1979, now exports 45 percent of its total sales. Equity 2.51

Quasi-equity -Syndications 20.01

Total 55.50 141.70

IFC helped arrange a Euro-Commercial Paper (ECP) facility for Turk Dis Ticaret Bankasi Loan 12.50A.S. (Disbank). The facility will provide Disbank with medium-term funding for export Equity -financing, allow it to take advantage of short-term rate movements, and give it access to Quasi-equity -non-traditional sources of funds, such as corporations, insurance companies, and invest- Syndications 47.50ment managers. IFC also approved a loan to Disbank for its own account and arranged a Total 60.00 60.00syndicated bank backstop line for the ECP facility

Uruguay

Migranja S.A. is a greenfield agricultural project which will produce about 24,000 tpy of Loan 2.35fresh apples and other deciduous fruits mainly for export to the EC. Equity 2.00

Quasi-equity -Syndications -

Total 4.35 19.40

74

Appendix D

Investments Approved IFC's Projectin Fiscal Year 1989 Investment Cost

(US$ millions)'

Venezuela

IFC has approved a loan to Polipropileno de Venezuela Propilven, S.A. (Propilven) to con- Loan 40.00struct 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 3.00million hatching eggs per year for its own hatcheries, instead of importing them. Equity -

Quasi-equitySyndications -

Total 3.00 8.70

Yugoslavia

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

currency markets. Quasi-equitySyndications -

Total 9.06 23.00

Vojvodjanska Banka-Udrezena Banka* is implementing a second investment package to Loan 23.82assist export-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 Loanfinance the increased cost of a project consisting of the construction of a new 1 92-i oom Equitywing of the Lusaka Intercontinental Hotel, the refurbishment of the hotel's old wing, and Quasi-equity -

the rehabilitation of 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. LoanEquity 0.33Quasi-equity -

Syndications -

Total 0.33 2.50

World

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

Syndications -

Total 5.00 76.50

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

*IFC has made a previous investment in this company.1. Investments denominated in currencies other than U.S. dollars are valued at exchange rates prevailing on June 30, 1989.2. As a rights issue below $250,000, this project is not included in the total number of approvals.Note: Quasi-equity investments are a range of financing instruments falling between senior loans and common stock and include instruments such as preferred stock,subordinated and convertible loans, income notes, puts, loans with conversion features.

75

International Finance Corporation

Investment PortfolioJune 30, 1989Expressed in United States dollars (in thousands)

Investment held for theOriginal CorpoTaston (inCuding

Fiscal years in Commitments undisbursed balances)COUNTRY, REGION OR OTHER AREA which commitments Tota Total Equity Total loansAND OBLIGOR Sector were made IFC Syndications Loans (at cost) and equity

ArgentinaAlpargatas S.A.I.C ........... ..... Textiles FY77,84, 86,88 42,935 7,500 30,993 5,000 35,993Alpesca,S.A ..... ............... Foodandagribusiness FY79,83,84 6,811 0 1,538 1,611 3,150ArcorS.A.l.C ..................... General manufacturing FY88 12,000 0 12,000 0 12,000Argentine Investment Company ...... Financial services FY89 2,000 0 0 2,000 2,000Astra-Compania Argentina de

Petroleo S.A .................... Energy FY88,89 37,375 0 37,375 0 37,375Banco Frances del Rio de la Plata S.A. Capital markets FY89 15,000 0 15,000 0 15,000Banco General de Negocios S.A ...... Capital markets FY88,89 20,000 0 20,000 0 20,000Banco Rio de la Plata, S.A ........... Capital markets FY88 30,000 0 30,000 0 30,000Banco Roberts S.A . ............... Capital markets FY86,89 20,000 0 18,779 0 18,779BridasS.A.Pl.C ................... Energy FY88 20,625 0 19,788 0 19,788Bunge y Born S.A ................. General manufacturing FY88 40,000 0 40,000 0 40,000Celulosa Argentina, S.A. ...... ..... Timber, pulp and paper FY65,72 8,250 4,000 634 0 634Chihuidos Oil Exploration Program ... Energy FY89 4,950 0 0 4,950 4,950Chirete/Morillo/Olleros Oil Exploration

Program ...................... Energy FY88 5,200 0 0 5,200 5,200Compafhia General de Inversiones .... Financial services FY89 100 0 0 100 100Hidra Oil Development Project ....... Energy FY87 60,000 20,000 60,000 0 60,000Inversiones Industriales S.A. and

Roberts Participaciones S.A ........ Capital markets FY86 1,275 0 0 1,275 1,275Ipako Industrias Petroquimicas

Argentinas S.A .................. Chemicals and petrochemicals FY78, 79, 82,87 20,308 0 1,385 2,000 3,385Juan Minetti S.A . ................. Cement and construction materials FY78, 81, 82,86 35,500 67,500 18,165 0 18,165Massuh S.A .................. ... Timber, pulp and paper FY78, 85,87,88 26,948 3,000 17,200 2,448 19,648PetroquimicaCuyoS.A.l.C .......... Chemicalsand petrochemicals FY84,86 25,000 21,197 21,000 4,000 25,000Soyex S.A . ...................... Food and agribusiness FY77,85 21,000 0 2,300 0 2,300S.A. GarovaglioyZorraquin ......... Chemicalsand petrochemicals FY87 13,000 0 13,000 0 13,000Terminal 6 S.A ................. Services FY87 5,500 0 5,042 0 5,042

364,198 28,584 392,782Bangladesh

Bata Shoe Company (Bangladesh)Limited ............... ....... General manufacturing FY85,86 3,551 1,415 2,538 509 3,047

Industrial Development LeasingCompany of Bangladesh Limited .. . Capital markets FY85 3,187 0 2,198 163 2,361

Industrial Promotion and DevelopmentCompany of Bangladesh Limited .. . Developmentfinancing FY80 1,051 0 0 1,051 1,051

4,735 1,723 6,458Barbados

Caribbean Financial ServicesCorporation ........... ......... Capital markets FY84 300 0 0 300 300

Town and Commercial PropertiesLimited ........... ........... Tourism FY87 1,250 0 1,184 0 1,184

1,184 300 1,484Bolivia

Banco Industrial, S.A ............... Development financing FY76, 88 10,550 0 10,000 0 10,000Compania Minera Concepci6n S.A... . Mining FY87 1,200 0 840 0 840Plasmar, S.A ..................... General manufacturing FY73 400 0 0 100 100

10,840 100 10,940Botswana

Botswana Development CorporationLimited .......... ........ Development financing FY79,85 607 0 0 607 607

BrazilAqosVillares, S.A . ................ Iron and steel FY66,68,72 6,382 3,544 0 116 116Amapa Florestal e Celulose

S.A.-AMCEL .................. Timber, pulp and paper FY87 14,000 0 14,000 0 14,000Banco Bozano, Simonsen de

Investimento S.A . ............... Capital markets FY88 20,000 0 20,000 0 20,000Banco Itau S.A. ......... ......... Capital markets FY88 30,000 0 30,000 0 30,000Brasilpar Comercio e Participacoes

S.A ........................... Capitalmarkets FY81 1,500 0 0 1,185 1,185Brasital S.A. para a I ndustria e o

Comercio ..................... Textiles FY88 100 0 100 0 100Capuava Carbones Industriais, Ltda. Chemicals and petrochemicals FY75,79 3,673 0 0 841 841Cebrace-Companhia Brasileira de

Cristal ...... ............ Industrial equipment andmachinery FY88 45,000 0 40,000 5,000 45,000

Cimento Caue S.A ................. Cement and construction materials FY82,87 25,000 20,000 12,325 3,255 15,580CimetalSiderurgiaS.A . ............ Ironandsteel FY78,84 11,380 0 0 3,000 3,000CIMINAS-Cimento Nacional de

Minas, S.A ..................... Cementand construction materials FY72, 75, 81,87 51,084 154,756 26,667 6,619 33,285

76

Appendix E

Investment held for theOriginal Corporation (ncluding

Fiscal yerars in Commitments undisbursed balances)COUNTRY, REGION OR OTHER AREA which comrr itments Total Total Equity Total loansAND OBLIGOR Sector were made IFC Syndicatons Loans (at cost) and equity

Brazil (continued)Companhia Alcoolqu/mica

Nacional-Alcoolqu(mica ......... Chemicalsandpetrochemicals FY84 24,000 0 6,856 3,719 10,574Companhia Brasileira de

AgropecuAria-COBRAPE ... .... Food and agribusiness FY81 8,500 0 4,500 3,000 7,500COPENE-Petroquimica do Nordeste

S.A ........................... Chemicals and petrochemicals FY89 45,000 0 45,000 0 45,000Dende do Para S/A-DEN PASA-

Agricultura, Industria e Comercio deOleaginosas ................... 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 7,370Eluma S.A. Industria E Comercio ..... Nonferrous metals FY89 15,000 0 15,000 0 15,000Empresa de Desenvolvimento de

Recursos Minerais "CODEMIN"S.A ................ .......... Iron and steel FY73,78,8' 26,140 67,600 0 4,340 4,340

Equity Fund of Brazil ...... ....... Financial services FY88, 89 20,291 0 0 17,791 17,791Fabrica Carioca de Catalisadores S.A. . Chemicals and petrochemicals FY88 20,500 0 20,500 0 20,500Fabrica de Tecidos Tatuape S.A . ..... Textiles FY88 16,550 0 8,800 0 8,800HeringdoNordesteS.A.-MALHAS Textiles FY80 2,000 0 271 0 271lochpe S/A-Arrendamento Mercantil

("IAM") ....................... Capital markets FY82 10,450 20,000 3,000 0 3,000Mineracoes Brasileiras Reunidas S.A. Iron and steel FY88 20,000 0 20,000 0 20,000Nitroclor Productos Quimicos S.A. Chemicals and petrochemicals FY86, 88 8,700 0 2,700 5,700 8,400PapeleCeluloseCatarinense,S.A. Timber, pulp and paper FY89 19,561 2,631 15,000 0 15,000Perdigao S.A. Comercio e Industria ... Food and agribusiness FY88 20,000 0 20,000 0 20,000PetroquimicaTriunfoS.A ............ Chemicalsand petrochemicals FY81, 87 19,106 31,000 5,332 3,065 8,397PISA-Papel de lmprensaS.A . ...... Timber, pulp and paper FY83, 85, 88 58,800 31,670 22,000 8,200 30,200Polisul Petroquimica S.A ............ Chemicals and petrochemicals FY80, 81, 87 20,999 28,000 6,500 5,999 12,499Politeno Linear Industria e Comerclo de

Pruductos ..................... Chemicals and petrochemicals FY89 25,000 0 18,500 6,500 25,000PPH-Companhia Industrial de

Poliopropileno .................. Chemicals and petrochemicals FY80 33,000 0 17,258 1,643 18,901Quimica da Bahia Industria e Comercio

S.A ........................... Chemicals and petrochemicals FY85 5,286 0 308 1,800 2,108Santista Industria Textile de Sergipe

S.A .......................... Textiles FY88 4,500 0 3.200 1,300 4,500Sao Paulo Alpargatas S.A ........... Textiles FY87 30,000 0 30,000 0 30,000SOCOCO S/A-Agroindustrias da

Amazonia ..... ............... Food and agribusiness FY83 5,500 0 2,100 2,500 4,600Sotave Amazonia Quimica e Mineral

S/A .......................... Fertilizers FY80, 83 28,000 13,000 14,200 0 14,200S.A. Moinho Santista Industrias Gerais . Textiles FY88 4,000 0 4,000 0 4,000Tecanor S.A.-Textil Catarinense do

Nordeste ...................... Textiles FY76, 80 16,200 0 1,233 0 1,233Toalia.S.A. IndustriaTextil ........... Textiles FY88 1,900 0 1,900 0 1,900Unibanco-Uniao de Bancos

Brasileiros S.A ............ ..... Capital markets FY88 30,000 0 30,000 0 30,000Villares I ndustrias de Base

S.A.-VIBASA ... .............. Iron and steel FY80 5,000 0 1,250 0 1,250Volvo do Brasil Motores e Veiculos S.A. Automotive industry FY79,83. 87 16,954 50,000 0 6,954 6,954

470,592 93,526 564,118

BurundiVerreriesdu Burundi,S.A.R.L ........ Generalmanufacturing FY81,82,87 5,878 0 0 1,108 1,108

CameroonAlucam-Compagnie Camerounaise

de 'Aluminum Pechiney-Ugine ..... Nonferrous metals FY79 7,932 0 0 932 932Cotonniere Industrielle du Cameroun

(CICAM) ...................... Textiles FY86 2,981 0 2,996 0 2,996Prestige Bottling Company .......... General manufacturing FY88 3,036 0 2,502 302 2.804Socibte Camerounaise de Minoteries . . Food and agribusiness FY81 1,308 0 281 186 467Socibtb Camerounaise de Verrerie .... General manufacturing FY81 1,802 0 0 102 102Socibtb des Palmeraies de la Ferme

Suisse, S.A ..................... Food and agribusiness FY85 2,536 0 954 558 1,513Socibtb des Plantations Nouvelles du

Penja . Foodandagribusiness FY88 2,250 0 1,798 341 2,139Socibtb Industrielle Laitiere du

Cameroun "SILAC" ...... ........ Food and agribusiness FY87 2,851 0 2,060 571 2,631Soci6t6 Sucriere du Cameroun ....... Food and agribusiness FY83 1,444 0 1,075 0 1,075

11,667 2,992 14,659

77

International Finance Corporation

Investment Portfolio (continued)June 30, 1989Expressed in United States dollars (in thousands)

Investment held for theOriginal Corporaeion (indudmng

Fiscal years in Commitments undisbursed balances)COUNTRY REGION OR OTHER AREA which commitments Total Total Equity Total loansAND OBLIGOR Sector were made IFC Syndications Loans (at cost) and equity

ChileCape Horn Methanol Ltd . ........ Chemicals and petrochemicals FY86, 88 100,000 0 45,000 5,000 50,000Celulosa Arauco y Constitucion S.A. . . Timber, pulp and paper FY87, 88 85,000 35,500 85,000 0 85,000Comparia Chilena de Inversiones S.A.

Agente de Valores ....... ........ Capital markets FY82 200 0 0 120 120Compania de Carbones de Chile

COCARS.A .................... Mining FY86 18,700 0 8,708 2,200 10,908Empresa Minera de Mantos Blancos

S.A ......................... Nonferrous metals FY58, 59,66,84 23,851 15,500 0 7,476 7,476International Investment Company of

Chile S.A. ..................... Financial services FY89 3,750 0 0 3,750 3,750Investment Management Company ... Capital markets FY88 60 0 0 60 60Minera Escondida Limitada ......... Nonferrous metals FY89 85,000 0 70,000 15,000 85,000The Chile Investment Company S.A. . . Financial services FY88 4,650 0 0 4,650 4,650

208,708 38,256 246,964

ChinaChina Bicycles Company Limited ..... General manufacturing FY88 5,000 0 5,000 0 5,000Crown (China) Electronics Co. Ltd ..... General manufacturing FY89 15,000 0 15,000 0 15,000Guangzhou Peugeot Automobile

CompanyLid ................... Automotive industry FY86 18,225 0 15,000 3,225 18,225JF China Investment Company Limited Development financing FY88 3,036 0 3,000 36 3,036Shenzhen-Chronar Solar Energy Co.,

Ltd ................ General manufacturing FY89 3,000 0 2,000 1,000 3,000

40,000 4,261 44,261

ColombiaCarbonesdel Caribe, S.A .......... Mining FY84,87 14,782 0 13,324 0 13,324Cementos Rioclaro S.A ............. Cement and construction materials FY84 16,000 11,473 1,550 1,400 2,950Corporacion Financiera del Norte .... Development financing FY69, 73 454 0 0 449 449Corporacion Financiera del Valle ..... Developmentfinancing FY88,89 9,784 0 5,000 4,784 9,784Corporacion Financiera Nacional ..... Development financing FY62,63,85 8,042 0 0 211 211Enka de Colombia, S.A .......... Textiles FY67,70, 74,85, 86,

87,89 43,816 17,103 34,078 0 34,078Frigorificos Colombianos S.A . ....... Services FY83,89 1,576 0 367 724 1,090Leasing Bolfvar, S.A ............... Capital markets FY81, 85, 87 7,195 7,000 3,414 195 3,609Petrbleos Colombianos Limited ..... Energy FY81, 82 6,750 9,259 1,790 3,435 5,225Productos Derivados de la Sal, S.A.

(PRODESAL) ........ .......... Chemicalsand petrochemicals FY87 7,180 0 6,000 1,180 7,180Promotora de la Interconexion de los

Gasoductos de la Costa AtlanticaS.A ........................... Services FY77 18,000 7,000 10,000 2,000 12,000

San Fernando/Chucuri Oil ExplorationProgram ...................... Energy FY86 5,000 0 0 4,186 4,186

75,523 18,563 94,087

Congo, People's Republic of theCongolaise des Bois Impregn6s, S.A. Timber, pulp and paper FY87 2,134 0 1,678 272 1,950Congolaise 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 RicaMatas de Costa Rica, S.A. .......... Food and agribusiness FY83,88 1,524 0 1,805 0 1,805Scott 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'lvoireEtablissements R. Gonfreville, S.A ..... Textiles FY77,87 9,656 0 8,390 885 9,275Industrial Promotion Services (C6te

d'lvoire) ....................... Capital markets FY88 833 0 0 833 833Omnium Chimique et Cosmetique

(COSMIVOIRE) ... ............. Food and agribusiness FY87 2,129 0 1,755 0 1,755Societe des Industries Alimentaires et

Laitieres "SIALIM" ... ............. Food and agribusiness FY88 3,654 0 2,922 524 3,446Societelvorienned'Engrais(Siveng) . . Fertilizers FY80 6,392 0 3,837 1,272 5,109

16,904 3,513 20,418

CyprusDome Investments Limited .......... Tourism FY83 2,058 0 0 274 274

DominicaFort Young (1986) Ltd. ............. Tourism FY89 700 0 0 700 700

78

Appendix E

Investment held for theOrignal Corporation (including

Fiscal yEars In Commitments undisbursed balances)COUNTRY REGION OR OTHER AREA which commitments Total Total Equ ty Total loansAND OBLIGOR Sector were tr ade IFC Syndications Loans (at cost) and equity

Dominican RepublicCementos Nacionales, S.A ...... ... Cement and construction materials FY74, 81, 88 7,828 0 0 1,828 1,828Compania Dominicana de Leasing,

S.A ..................... .... Capital markets FY84 3,150 0 0 52 52Productora Nacional de Algodon, C.

por A ....... ............. Food and agribusiness FY83,84,89 2,936 2,400 1,363 728 2,091Transamerican Hoteles, Dechiaro,

Siskind, Vincent & Co. S. en C. por A...................... ... Tourism FY87 6,000 0 6,000 0 6,000

7,363 2,607 9,971Ecuador

Comrpafiia Financiera Ecuatoriana deDesarrollo, S.A ......... ..... Developmentfinancing FY69, 73, 75, 77, 81 4,589 0 4,000 375 4,375

Facturas Internacionales S.A ......... Capital markets FY88 88 0 0 88 88MineraKollaS.A ................ . Mining FY87 13,400 0 5,500 4,400 9,900

9,500 4,863 14,363Egypt, Arab Republic of

Alexandria National Iron & SteelCompany S.A.E ............... . Iron and steel FY84 38.400 64,000 0 7,200 7,200

Aluminum Sulphate Company of EgyptS.A.E . ............... Chemicals and petrochemicals FY86 565 0 0 565 565

Arab Ceramic Company S.A .... ... Cement and construction materials FY76, 82 6,243 1,500 1,801 954 2,755Bechtel Egypt S.A.E .... ..... ... Services FY88 100 0 0 100 100Crocodile Tourist Project Company

SAE ............. .......... Tourism FY82 5,131 0 715 721 1,436Delta Sugar Company S.A.E ......... Food and agribusiness FY78,83 15,506 8,000 7,500 3,506 11,006Egypt Investment Finance Corporation,

S.A.E ............ ....... Capital markets FY85 1,640 0 0 140 140Ismailia Fish Farming Company, S A.E. Food and agribusiness FY80, 81,8(3 5,009 0 1,930 100 2,030IsmailiaMisrPoultryCompany,S.A.E. . Food and agribusiness FY79,83 14,353 0 0 1,645 1,645Meleiha Oil Development and

Exploration Project .......... ... Energy FY87, 88 28,700 0 0 20.691 20,691Phoenix Resources Company of Egypt Energy FY88 20,000 0 20,000 0 20,000Suez Cement Company ...... ...... Cement and construction materials FY80 30.000 0 11,450 0 11,450

43,396 35,623 79,019Ethiopia

Red Sea Oil Exploration Program .. .. Energy FY89 7,800 0 0 7,800 7,800

FijiCaposLimited ................... Tourism FY86 8,818 0 8,719 0 8,719Fiji Forest Industries Limited ......... Timber, pulp and paper FY87 3,627 0 1,989 1,638 3,627Merchant Bank of Fiji Limited ........ Capital markets FY87 2,347 0 0 347 347

10,708 1,985 12,692Gabon

Compagnie Miniere de l'Ogooue .... Mining FY89 32,000 0 32,000 0 32,000ShellGabonS.A ... .............. Energy FY89 50,000 110,000 50,000 0 50,000Societe de Placages d'Essassa S.A. .. Timber, pulp and paper FY88 3.671 0 3,671 0 3,671

85,671 0 85,671Gambia, The

Kombo Beach Hotel Limited ........ Tourism FY84 2,823 0 3,913 0 3,913Ghana

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 1,000Keta Basin Oil ................. .. Energy FY87 4.500 0 0 2,900 2,900

27,500 3,900 31,400Greece

Aluminium de Grece, Societe AnonymeIndustrielleetCommerciale ........ Nonferrous metals FY70, 72 4,922 3,731 0 577 577

GrenadaIssa Nicholas (Grenada) Limited ...... Tourism FY86 6,000 0 4,500 0 4,500

GuineaBanque Internationale pour le

Commerce et l'lndustriede la Guinee .. ............... .. Capital markets FY87 1,000 0 0 1,000 1,000

Societe Aurifere de Guinee S A ....... Mining FY88 7,500 0 7,500 0 7,500Societ6MixteAredor-GuineeS.A . .... Mining FY83 14,835 0 7,873 1,228 9,101

15,373 2,228 17,601

79

Intemnational Finance Corporation

Investment Portfolio (conind)June 30, 1989Expressed in United States dollars (in thousands)

Investment held for theOriginal Corporation (including

Fiscal years in Commitments undisbursed balances)COUNTRY, REGION OR OTHER AREA which commitments Total Total Equity Total loansAND OBLIGOR Sector were made IFC Syndications Loans (at cost) and equity

GuyanaIndustrial Domestic and Electrical

Appliances Limited .............. General manufacturing FY79 2,000 0 1,367 0 1,367

HaitiPromoteurs et Investisseurs Associes,

S.A .......... Food and agribusiness FY82 1,500 0 350 114 464

HondurasGranjas Marinas San Bernardo S.A. de

C.V .......................... Food and agribusiness FY87 575 0 0 575 575Textiles Rfo Lindo, S.A. de C.V ....... Textiles FY78 4,000 6,000 2,400 1,000 3,400

2,400 1,575 3,975

HungaryAgroferm Hungarian-Japanese

Fermentation Industry Ltd ... ...... Food and agribusiness FY87 11,250 0 8,550 2,700 11,250DunamontPolisztirolgyartoRt ....... Textiles FY89 17,209 11,375 13,063 3,579 16,642Salgotarjan Glass Wool Limited ...... Industrial equipment and

machinery FY88 4,972 0 3,440 1,532 4,972Unicbank Rt. ..... ......... Capital markets FY87 3,227 0 0 3,227 3,227

25,053 11,037 36,090

IndiaAhmedabad Electricity Company

Limited ........................ Services FY89 19,455 0 19,455 0 19,455BajajTempoLimited ............... Automotiveindustry FY86 15,077 15,459 750 0 750Bihar Sponge Iron Limited .......... Iron and steel FY85 15,440 0 14,096 630 14,726Deepak Fertilisers and Petrochemicals

Corporation Limited ...... ....... Fertilizers FY80, 82,87,89 11,722 0 4,686 2,852 7,538Export-lmport Bank of India ......... Capital markets FY87 15,000 0 14,805 0 14,805Gujarat Narmada Valley Fertilizers

CompanyLimited ......... ..... Fertilizers FY87 33,911 0 33,179 0 33,179Gujarat State Fertilizers ....... ..... Chemicals and petrochemicals FY89 27,161 0 27,049 0 27,049Hero Honda Motors Limited ......... Automotive industry FY87 7,738 0 7,330 0 7,330Hindustan Motors Limited .......... Automotive industry FY87 36,886 0 28,590 0 28,590Housing Development Finance

Corporation Limited .... ........ Capital markets FY78,87 5,608 0 600 1,001 1,601India Equipment Leasing Limited ..... Capitalmarkets FY86 2,817 0 0 317 317India Lease Development Limited .... Capital markets FY85 5,351 0 0 351 351Invel Transmissions Limited ......... Automotive industry FY88 1,067 0 0 1,067 1,067Keltron Telephone Instruments Limited . Industrial equipment and

machinery FY89 258 0 0 258 258Mahindra Ugine Steel Company Ltd ... Iron and steel FY64,75,79 13,000 142 0 1,176 1,176Modi Cement Limited .............. Cementandconstructionmaterials FY85 13,047 0 18,829 0 18,829Nagarjuna Coated Tubes Limited ..... Iron and steel FY81 0 0 1,500 245 1,745Nagarjuna Signode Limited . ......... Iron and steel FY86 0 0 1,509 300 1,809Nagariuna Steels Limited ..... ...... Iron and steel FY87 8,150 0 484 241 725The Great Eastern Shipping Company

Limited ....................... Services FY86 11,866 0 5,975 5,891 11,866The Gujarat Rural Housing Finance

Corporation Limited ..... ....... Capital markets FY87 195 0 0 195 195The Indian Rayon Corporation Limited . Cement and construction materials FY82,87 14,554 0 4,073 0 4,073The Tata Iron and Steel Company

Limited ...................... Iron and steel FY81, 86, 89 70,844 20,000 25,444 21,383 46,827Titan Watches Limited .... ........ General manufacturing FY87, 89 22,000 0 19,381 391 19,772WBI Advanced Technology ......... General manufacturing FY89 200 0 0 200 200

227,735 36,496 264,231

IndonesiaPT Asuransi Jiwa Dharmala Manulife Capital markets FY88 321 0 0 321 321PT Bali Holiday Village ............. Tourism FY88 9,325 2,000 3,500 0 3,500PT Jakarta International Hotel ....... Tourism FY73, 89 5,498 7,000 0 2,664 2,664PT Monterado Mas Mining . ........ Mining FY88 5,500 4,500 3,500 2,000 5,500PT Papan Sejahtera . ..... .... Capital markets FY80 5,202 0 0 1,202 1,202PT Private Development Finance

Company of Indonesia ........... Developmentfinancing FY74 483 0 0 362 362PT Saseka Gelora Leasing .......... Capital markets FY82,85 3,371 2,000 0 371 371PT Semen Andalas Indonesia ....... Cement and construction materials FY80, 88 27,658 25,898 20,871 0 20,871PT Unitex .......... ............ Textiles FY71 1,550 1,750 0 800 800

27,871 7,721 35,592

80

Appendix E

Investment held for tneOriginal Corporaton (ncludng

Frscal years in Commntments undisbursed balances)COUNTRY, REGION OR OTHER AREA which commitments Total Total Equity Total loansAND OBLIGOR Sector wtpre made lFC Syndications Loans (at cost) and equity

JamaicaEagle Merchant Bank of Jamaica

Limited ... .................. Capital markets FY89 5,000 0 5,000 0 5,000Jamaica Citizens Bank Limited ....... Capital markets FY89 5,000 0 5,000 0 5,000Jamaica Flour Mills Limited ....... Food and agribusiness FY82 5,000 0 833 0 833Mutual Security Bank Limited ...... Capital markets FY89 5,000 0 5,000 0 5,000Pegasus Hotels of Jamaica, Ltd. ..... Tourism FY69 1,987 926 0 669 669St. Mary Banana Estates Limited ..... Food and agribusiness FY87 4,660 0 3,749 911 4,660The Falcon Fund (1985) Limited ...... Financial services FY86 2.555 0 1,409 0 1,409

20,992 1,580 22,571

JordanAl-Hikma Pharmaceuticals Company . Generalmanufacturing FY87 2,193 0 2,118 0 2,118Jordan Ceramic Industries Company

Ltd ........................... Cement and construction materials FY74 1,576 250 0 226 226Jordan Leasing Company Ltd . ...... Capital markets FY82 290 0 0 290 290Jordan Lime and Silicate Brick

Industries Company Limited ....... Cement and construction materials FY79, 85 3,848 0 1,539 0 1,539Jordan Phosphate Mines Company

Limited ........... ,.......... Fertilizers FY75, 78., 82 38,229 50,000 7,476 0 7,476

11,132 516 11,647

KenyaBamburi Portland Cement Company

Limited ..... ,............... Cement and construction materials FY82 4,430 0 1,749 0 1,749Development Finance Company of

Kenya Limited .................. Developmentfinancing FY80, 84 6,381 0 3,563 1,314 4.878Diamond Trust of Kenya Limited ...... Capital markets FY82 804 0 0 804 804Equatorial Beach Properties Limited . Tourism FY86 3,671 0 5,111 0 5,111Industrial Promotion Services (Kenya)

Limited ....................... Capital markets FY82, 87 2,046 0 0 2,046 2,046Kenya Commercial Finance Company

Limited ... ................... Capital markets FY81 5,000 0 2,024 0 2,024Leather Industries of Kenya Limited ... General manufacturing FY84 2,713 0 1,029 595 1,624Panafrican Paper Mills (E.A.) Ltd ...... Timber, pulp and paper FY70, 74. 77,79,81 28,049 3,965 4,333 4,510 8,844RiftValleyTextilesLimited . ........... Textiles FY76 9,638 1,296 4,466 0 4,466Tetra Pak Converters Limited ........ Timber, pulp and paper FY83 2,540 0 611 0 611Tourism Promotion Services (Kenya)

Ltd ................ ......... Tourism FY72 1,629 791 0 45 45

22,887 9,314 32,202

Korea, Republic ofAnam Industrial Company Limited .... Industrial equipment and

machinery FY88 15,747 0 0 15,747 15,747Gold Star Company, Ltd. ..... ..... General manufacturing FY75,76,77,79,80,

84,85,87.88 35,908 13,635 0 15,531 15,531Hae Un Dae Development Company,

Ltd ........................... Tourism FY75 3,450 0 0 700 700Korea Development Investment

Corporation ......... .......... Capital markets FY83,85 5,952 0 0 5,952 5,952Korea Development Leasing

Corporation ................... Capital markets FY77, 79,37 5,862 10,000 0 331 331Korea Investment and Finance

Corporation .................... Capital markets FY71, 74, 76, 79, 80,82, 85, 89 8,509 0 0 6,920 6,920

Korea Long Term Credit 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 2,014KoreaZincCompany, Ltd ........... Nonferrousmetals FY76, 86 26,612 0 5,368 5,612 10,980Taihan Bulk Terminal Co., Ltd . ....... Services FY81 6,000 3,500 0 2,500 2,500Tong Yang Nylon Company, Limited ... Textiles FY75,88, t9 12,060 0 0 4,545 4,545

5,368 65,662 71,030

LiberiaLiberian Bank for Development and

Investment .. ................... Development financing FY66, 77, 84 702 1 0 70 70Liberian Timber and Plywood

Operation Company .. ............ Timber, pulp and paper FY88 8,500 0 8,500 0 8,500

8,500 70 8,570

MadagascarLa Cotonniere d'Antsirabb (COTONA)

S.A ........................... Textiles FY86 9,475 0 9,025 184 9,209Les Pcheries de Nossi-Bb, S.A. ...... Food and agribusiness FY84 2,669 0 957 99 1,057SocibtbTextiledeMajungaS.A ....... Textiles FY77,87 15,026 0 3,985 309 4,294

13,967 593 14,560

81

International Finance Corporation

Investment Portfolio (continued)June 30, 1989Expressed in United States dollars (in thousands)

Investment held for theOriginal Corporation (including

Fiscal years in Commitrments undisbursed balances)COUNTRY REGION OR OTHER AREA which commitments Total Total Equity Total loansAND OBLIGOR Sector were made IFC Syndications Loans (at cost) and equity

MalawiDavid Whitehead and Sons (Malawi)

Ltd .................. .. .. . Textiles FY76, 82 10,784 0 2,864 0 2,864Dwangwa Sugar Corporation Limited .Food and agribusiness FY77, 81, 85 11,306 0 8,812 0 8,812Ethanol Company Limited ......... Chemicals and petrochemicals FY81, 82 2,458 0 476 245 721Investment and Development Bank of

Malawi Limited .............. Development financing FY79 605 0 0 605 605The Leasing and Finance Company of

Malawi, Limited ..... ........... Capital markets FY86 747 0 672 76 747Viphya Plywoods and Allied Industries

Limited ........................ Timber, pulp and paper FY87 4,427 0 3,308 500 3,808

16,132 1,426 17,558

MalaysiaAquabio (Sabah) Sdn. Bhd. ......... Food and agribusiness FY88 4,000 0 4,000 0 4,000SEAVI Project .................... Capital markets FY85 1,000 0 0 1,000 1,000

4,000 1,000 5,000

MaliSociete Industrielle de Karit6 du Mali,

S.A ........................... Food and agribusiness FY82, 83 2,297 0 1,756 0 1,756Societe Mamadou Sada Diallo et Freres

SARL (SOMACI) ................. General manufacturing FY78 636 0 137 0 137

1,893 0 1,893

MauritiusSocota Textile Mills Ltd .............. Textiles FY87 5,993 0 5,000 993 5,993

MexicoAgro Industrial Exportadora, S.A. de

C.V ......................... Food and agribusiness FY87 2,001 0 1,500 501 2,001Apasco, S.A. de C.V . ....... ...... Cement and construction materials FY88, 89 51,000 0 5,000 0 5,000BancaSerfin,SNC .N .............. Developmentfinancing FY89 60,000 0 60,000 0 60,000Celulosa y Papel de Durango, S.A. de

C.V .......................... Timber, pulp and paper FY86, 89 13,069 0 10,000 3,069 13,069Cementos Veracruz, S.A. ... ........ Cement and construction materials FY73, 79 11,352 4,500 1,338 0 1,338Conductores Monterrey S.A . ........ Industrial equipment and

machinery FY79 5,000 13,000 4,677 0 4,677Crescent MarketAggregates Project Mining FY88 37,000 0 14,000 0 14,000EmpresasToltecadeMexico,S.A .. Cementand construction materials FY79, 84 37,950 138,000 7,941 3,427 11,369Fomento Economico Mexicano S.A. de

C.V (Visa) ............ ...... General manufacturing FY89 80,000 0 80,000 0 80,000Hotel Camino Real Ixtapa, S.A .. . Tourism FY79, 81,87 4,201 0 0 4,198 4,198Industrias Resistol, S.A. ............. Chemicals and petrochemicals FY80 8,000 17,000 500 0 500IndustriasSultamex, S.A. deC.V ..... Fertilizers FY87 2,500 0 2,000 500 2,500Metalsa, S.A . ................... Automotive industry FY84, 88 9,400 0 6,500 1,400 7,900Minera Real de Angeles, S.A. de C .V. Mining FY80 30,000 80,000 2,000 0 2,000Papeles Ponderosa, S.A ............ Timber, pulp and paper FY79, 81,84 11,157 4,500 680 0 680Polimar, S.A. de C.V .............. Chemicals and petrochemicals FY89 14,500 0 14,500 0 14,500Prompciones Industriales Mexicanas,

S.A. de C.V ..................... Chemicals and petrochemicals FY85 12,000 4,400 3,333 0 3,333Proteison, S.A. de CY .. ......... Food and agribusiness FY85 2,770 0 0 820 820Salumi, S.A. de C.V ................ Food and agribusiness FY88 22,061 0 19,861 2,000 21,861Sealed Power de Mexico, S.A. de C.V

and Spimex, S.A. de C.V . ......... Automotive industry FY88 9,000 0 9,000 0 9,000The Cemex Group .............. Cement and construction materials FY89 60,000 8,000 60,000 0 60,000Tereftalatos Mexicanos, S.A .......... Chemicals and petrochemicals FY78 19,000 0 2,375 0 2,375Universal de Valores, S.A. de C,V .V.... Food and agribusiness FY81 9,300 5,000 994 1,670 2,664Vidrio Plano de Mexico, S.A. and Vitro

Flotado, S.A ....... ............. Industrial equipment andmachinery FY80 15,000 99,900 4,800 0 4,800

311,000 17,585 328,585

MoroccoAsment de Temara S.A ............. Cement and construction materials FY77, 80 8,328 0 255 0 255Banque Nationale pour le

Developpement Economique . ...... Development financing FY63,78, 84,86 46.690 40,240 46,358 1,544 47,903Cimenterie Nouvelle de

Casablanca-Cinouca, S.A ........ Cement and construction materials FY82,83 17,844 0 7,900 2,044 9,944Compagnie Maritime

Maroco-Norvegienne (COMARIT) Services FY89 4,300 2,000 4,300 0 4,300Creditlmmobilieret tt5elier .. ........ Developmentfinancing FY87 27,385 26,480 24,293 0 24,293Fruitibre Marocaine de Transformation

(FRUMAT) .................... Food and agribusiness FY86 7,583 0 5,792 0 5,792Settat Filature SETAFIL .. ........... Textiles FY88 4,864 0 2,996 919 3,916Societe 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

Investment held for theOr ginal Corporation (including

Fiscal ye ars in Commitments undisbursed balances)COUNTRY, REGION OR OTHER AREA which comrnitments Total Total Equity Total loansAND OBLIGOR Sector were nrade IFC Syndications Loans (at cost) and equity

MozambiqueCompanhia Agro-Industrial

Lonrho-Mogambique Limitada ..... Food and agribusiness FY87 2,500 0 2,250 0 2,250XaiXai ............. ...... Energy FY88 7,750 0 0 5,412 5,412

2,250 5,412 7,662

NepalNepal Orind Magnesite (Private)

Limited ............... ....... Mining FY82 4,966 0 7,379 0 7,379Soaltee Hotel Limited ...... ........ Tourism FY75 3,128 0 0 428 428

7,379 428 7,806

NigerLes Moulins du Sahel, S.A ........... Food and agribusiness FY82 2,267 0 2,036 0 2,036

NigeriaArewa Textiles, Ltd . . Textiles FY64, 67, 70 847 728 0 442 442Dunlop Nigerian Industries Limited . . Automotive industry FY88 12,500 0 12,500 0 12,500Ikeja Hotel Limited ................ Tourism FY81,85,838 12,131 0 7,717 1,491 9,208Nigeria Engineering Works Limited . .. Automotive industry FY87 11,250 0 170 0 170Nigerian Textile Mills Limited ...... Textiles FY80, 87 21,503 0 1,580 735 2,315Tiger Battery Company (Nigeria)

Limited ..................... . General manufacturing FY85 2,850 2,276 3,954 0 3,954

25,922 2,668 28,590

OmanOmanDevelopmentBankS.A.0 ...... Developmentfinancing FY79 2,029 0 0 1,014 1,014

PakistanAttock Refinery Limited .......... . Energy FY79,82, 84 8,357 7,500 1,500 857 2.357Dawood Hercules Chemicals, Ltd . . Fertilizers FY69, 89 21,223 0 17,300 2,923 20,223HabibArkady Limited ............. Food and agribusiness FY81 3,315 0 3,150 165 3,315HalaSpinningLimited ........ Textiles FY89 3,217 0 3,217 0 3,217Mari Gas Company Limited ......... Energy FY86 24,982 21,543 5,627 0 5,627Millat Tractors Limited ............. Industrial equipment and

machinery FY88 4,898 0 4,601 0 4,601Packages Limited ...... .......... Timber, pulp and paper FY65, 80, 82,87,88 16,932 10,087 6,750 705 7,455Pakistan Industrial Credit and

Investment Corporation Limited .... Development financing FY63, 69, 75, 89 3,629 0 0 592 592Pakistan Oilfields Limited ........... Energy FY79, 82,84 8,183 7,000 0 1,183 1,183Pakistan Paper Corporation, Ltd ...... Timber, pulp and paper FY67,76 6,855 546 4,511 0 4,511Pakistan Petroleum Limited ..... Chemicalsand petrochemicals FY83,85 26,856 79,200 14,982 1,560 16,542Shams Textile Mills Limited .. Textiles FY89 2,719 0 2,719 0 2,719Suraj Cotton Mills Limited . ........ Textiles FY89 2,719 0 2,719 0 2,719Thatta Oil Exploration Program ...... Energy FY87 6,800 0 0 2,014 2,014

67,076 9,999 77,075

PanamaBanco Latinoamericano de

Exportaciones, S.A . .......... Capital markets FY79, 85, 86, 88 49,827 0 22,250 2,500 24,750Vidrios Panamenos, S.A . ........ General manufacturing FY78 3,800 0 0 1,280 1,280

22,250 3,780 26,030

ParaguayEmpresa Hotelera de

Encarnacitn S.A . ............... Tourism FY81, 8E 1,450 0 270 280 550Sociedad Agricola Golondrina S.A. ... Food and agribusiness FY82 7,000 0 3,545 750 4,295

3,815 1,030 4,845

PeruCompafi(a Aurifera Rio Inambari, S.A. Mining FY86 6,500 0 6,000 500 6,500Compania de Cemento Pacasmayo,

S.A... ....................... Cement and construction materials FY64, 67 248 1,357 0 91 91Comnpan(a de Minas Buenaventura,

S.A. ...................... Mining FY79, 83,86 7,460 0 668 1,460 2,128CompaFiade Minas Orcopampa, S.A. Mining FY86 9,000 0 6,750 0 6,750Compania Minera San Ignacio de

Morococha, S.A ................ Nonferrous metals FY80, 85 7,200 0 0 500 500Consorcio Energetico de

Huancavelica, S.A ...... . ..... Services FY82 4,500 0 1,732 0 1,732S.A. Minera Regina ....... ........ Nonferrous metals FY85 5,240 0 1,500 240 1,740

16,650 2,791 19,441

83

Intemnational Finance Corporation

Investment Portfolio (coninued)June 30, 1989Expressed in United States dollars (in thousands)

Investment held for theOriginal Corporation (including

Fiscal years in Commitments und sbursed balances)COUNTRY, REGION OR OTHER AREA which commitments Total Total Equity Total loansAND OBLIGOR Sector were made IFC Syndications Loans (at cost) and equity

PhilippinesAcoje Mining Company Inc .......... Mining FY77, 85 3,721 0 1,342 0 1,342All Asia Capital and Leasing

Corporation (AACL) ...... ....... Capital markets FY80, 83, 85 5,585 6,000 1,857 491 2,348BPI Agricultural Development Bank . . Developmentfinancing FY88 976 0 0 976 976Cebu Shipyard and Engineering

Works, Inc ................... Industrial equipment andmachinery FY78 2,100 0 131 0 131

Davao Union Cement Corporation .... Cement and construction materials FY81 16,000 0 4,503 0 4,503First Philippine Capital Fund L.P ..... Financial services FY88 4,200 0 0 4,200 4,200General Milling Corporation ......... Food and agribusiness FY79 5,082 0 250 1,082 1,332Hambrechl & Quist Venture Capital

Fund ......................... Capitalmarkets FY89 2,417 0 0 2,417 2,417Manila Electric Company ........... Services FY89 36,926 2,958 27,884 0 27,884Maria Cristina Chemical Industries, Inc. Iron and steel FY74, 79 2,190 0 0 436 436NDC-Guthrie Plantations, Inc. ....... Food and agribusiness FY82 11,000 0 11,000 0 11,000Philippine Associated Smelting and

Refining Corporation ...... ..... Nonferrous metals FY81 5,000 0 0 5,000 5,000Philippine Long Distance Telephone

Company .... .............. Services FY70, 82,87,88 58,530 0 54,000 0 54,000Pure Foods Corporation ........... Food and agribusiness FY86 1,391 0 0 1,390 1,390Ventures in Industry and Business

Enterprises, Inc ................. Capital markets FY80 245 0 0 14 14

100,967 16,005 116,972

PolandCentrala Spoldzielni Ogrodniczych i

Pszczelarskich (Hortex) ........... Food and agribusiness FY89 15,044 0 14,758 0 14,758

PortugalBanco Portugues de Investimento .... Development financing FY82, 85, 87, 88 20,545 2,000 8,040 1,301 9,341Finantia-Sociedade de Investimentos,

S.A ........................ Capital markets FY88,89 1,239 0 0 1,239 1,239

8,040 2,540 10,579

RwandaSociete Rwandaise des Allumettes

(SORWAL)S.A.R.L . ............. Timber, pulp and paper FY88 197 0 0 197 197Societe Rwandaise pour la Production

et la Commercialisation du The ..... Food and agribusiness FY76, 79,85 1,111 0 92 0 92

92 197 289

SenegalAfrican Seafood, S.A ............... Food and agribusiness FY86, 88,89 4,201 0 2,505 906 3,411Banque de l'Habitat du Senegal S.A. . . Capital markets FY80 465 0 0 465 465Industries Chimiques du Senegal, S.A. . Fertilizers FY82,88 37,145 0 14,100 145 14,245Societe Financiere Senegalaise pour le

Developpement de l'Industrie et duTourisme ...................... Development financing FY74,85 339 0 0 339 339

16,605 1,855 18,460

SeychellesAileeDevelopmentCCorporationLtd. .. Tourism FY87 9,132 0 8,864 0 8,864

Sierra LeoneSierra Cement Manufacturing

Company Limited-"SERACEM" ... Cement and construction materials FY80 2,050 0 2,050 0 2,050

SomaliaSomali Bag Company Limited ....... General manufacturing FY85 976 0 916 0 916Somali Molasses Company Limited . . Services FY81 375 0 69 0 69

985 0 985

SpainSociedad Espanola de Financiacidn de

la Innovacidn, S.A ............... Capital markets FY78 877 0 0 877 877

Sri LankaBank of Ceylon ................... Capital markets FY78,81 7,000 0 2,722 0 2,722Development Finance Corporation of

Ceylon ....................... Developmentfinancing FY78, 80,83 457 0 0 457 457Lanka Orix Leasing Company Limited Capital markets FY80,84,85 3,339 0 0 113 113Taj Lanka Hotels Limited ......... Tourism FY81 8,900 11,100 1,800 650 2,450Union Assurance Limited ..... Capital markets FY88 485 0 0 485 485

4,522 1,704 6,226

84

Appendix E

Investment held for theOriginal Corporatlion (includmg

Fiscal yea-s in Commitments undisbursed balances)COUNTRY REGION OR OTHER AREA which comm tments Total Total Equity Total loansAND OBLIGOR Sector were made LFC Syndications Loans (at cost) and equity

SudanCotton Textile Mills, Ltd. ...... ...... Textiles FY76 9,979 0 8,714 0 8,714Gezira Managil Textile Company

Limited ....................... Textiles FY78 8,083 0 6,688 0 6,688

15,401 0 15,401

SwazilandNatex Swaziland Limited ..... ...... Textiles FY88 8,770 0 5,000 1,270 6.270Swaziland Industrial Development

Company Limited .... .......... Developmentfinancing FY87, 89 3,000 0 2,300 700 3,000The National Textile Corporation of

Swaziland Limited ....... ........ Textiles FY85 2,202 0 1,351 539 1,890The Royal Swaziland Sugar

Corporation Limited ...... ....... Food and agribusiness FY78, 86 10,429 0 2,286 461 2,747

10,937 2,970 13,907

TanzaniaAmboni Limited ......... ........ Food and agribusiness FY85 4,379 712 3,089 0 3,089Highland Soap and Allied Products

Limited ....................... General manufacturing FY78 1,741 0 660 0 660

3,748 0 3.748

ThailandBangkok Glass Industry Co. Ltd ...... General manufacturing FY79,80,83 10,298 0 0 448 448HMC PolymersCompany Limited ... . Chemicalsand petrochemicals FY88 16,499 11,000 15,000 1,499 16,499National Petrochemical Corporation

Limited .. ...................... Chemicals and petrochemicals FY84,86,88,89 35,512 0 35,000 512 35,512Northeast Agriculture Company

Limited ....................... Food and agribusiness FY87 2,100 0 1,564 470 2.034Peroxythai Limited ............. _ . Chemicals and petrochemicals FY89 10,700 0 10,700 0 10,700Phansrivivat Company, Ltd ..... ..... Food and agribusiness FY88 4,673 0 3,600 1,073 4,673Sea Minerals Limited ...... .. .... Nonferrous metals FY83 556 0 0 482 482SEAVI Project .................... Capital markets FY85 1,000 0 0 1,000 1,000Siam CityCementCo., Ltd . ........ Cementand construction materials FY79, 81,t85,87 56,169 68,000 0 5,644 5,644Thailand Tantalum Industry

Corporation, Limited .... ........ Nonferrous metals FY84 21,911 35,000 0 1,732 1,732The Mutual Fund Company Limited ... Financial services FY77 294 0 0 294 294The Siam Cement Co., Ltd . ......... Cement and construction materials FY69, 76, ?8, 80, 85 16,878 15,874 0 1,422 1,422World Aquaculture Company, Ltd ..... Food and agribusiness FY84 3,711 0 0 561 561

65,864 15,137 81,001

TogoDucros-Togo, S.A . ............... Food and agribusiness FY88 1,303 0 1,274 0 1,274Societe Togolaise de Siderurgie, S.A. .. Iron and steel FY88 850 0 779 0 779

2,053 0 2,053

Trinidad and TobagoHome Mortgage Bank ...... ....... Capital markets FY87 411 0 0 411 411Trinidad and Tobago Development

Finance Company Limited ........ Developmentfinancing FY89 469 0 0 469 469Trinidad Nitrogen Company Limited . . . Fertilizers FY87 34,930 150,000 31,564 0 31,564

31,564 880 32,444

TunisiaAdwyaS.A . ..................... General manufacturing FY87 2,390 0 2,107 283 2,390Banque de D6veloppement

EconomiquedeTunisie ...... ..... Developmentfinancing FY66, 70,78 2,305 0 0 2,305 2,305Banque Nationale de Developpement

Touristique ......... O.......... Developmentfinancing FY69 9,081 1,167 0 2,248 2,248Comete Engineering ....... ....... Services FY87 38 0 0 38 38Industries Chimiques du Fluor, S.A. Nonferrous metals FY74 640 0 0 640 640Rozzi Edilizzia Industrializ7ata de

Tunisie (REIT) ..... .. Industrial equipment andmachinery FY87 1,565 0 1,159 406 1,565

Societe des Industries Textiles Reunies,S.A ............. ............. Textiles FY88 4,393 0 2,247 2,146 4,393

Societe Industrielle des Textiles (SITEX) Textiles FY86 8,211 0 4,688 2,152 6,839Societe Miniere de Spath-Fluor et

Barytine (Fluobar), S.A ......... .. Mining FY85 245 0 0 245 245Soci6te Tunisienne de Leasing "Tunisie

Leasing", S.A . ................. Capital markets FY85, 8E 3,938 0 1,475 471 1,946Societes d'Etudes et de

Developpement de Sousse-Nord ... Tourism FY73,7. 3,161 0 0 631 631

11,676 11,565 23,242

85

International Finance Corporation

Investnent Portfolio (conrinued)June30, 1989Expressed in United States dollars (in thousands)

Investment held for theOriginal Corporation (including

Fiscal years in Commitments undisbursed balances)COUNTRY REGION OR OTHER AREA which commitments Total Total Equity Total loansAND OBLIGOR Sector were made IFC Syndications Loans (at cost) and equity

TurkeyAnadolu Cam Sanayii, A.S. ......... Industrial equipment and

machinery FY70,86,87,88 19,454 3,294 10,686 1,956 12,643Cam Elyaf Sanayii A.S .............. Industrial equipment and

machinery FY86 7,942 0 8,373 0 8,373Dusa Endustriyel IplikSanayi ........ Textiles FY89 17,000 8,000 17,000 0 17,000Elginkan Holding A.S . ............. General manufacturing FY88 16,454 0 14,758 0 14,758EskaTurism veTicaretA.S . ......... Tourism FY86,89 9,078 0 8,855 0 8,855Guney Sanayi ve Ticaret Isletmeleri

A.S ........................... Textiles FY87 16,478 0 15,535 0 15,535Is Genel Finansal Kiralama A.S . ....- Capital markets FY88 478 0 0 478 478Isko Tekstil Sanayi ve Ticaret A.S ...... Textiles FY89 32,266 0 32,266 0 32,266Kiris Otelcilik Ve Turizm A.S . ......... Tourism FY89 7,804 0 7,328 0 7,328Kirklareli Cam Sanayii A.S ......... General manufacturing FY81,89 30,450 1,955 22,200 0 22,200Man Kamyon ve Otobus Sanayi A.S. . Automotive industry FY85 6,466 0 8,143 0 8,143M.A.N.MotorSanayiveTicaretA.S. Automotive industry FY82 7,886 0 5,171 0 5,171Nasas-Aluminyum Sanayii ve Ticaret

A.S ........................... Nonferrous metals FY71,76,83,84,89 10,074 0 0 1,499 1,499Pinar Entegre et ve Yem Sanayii A.S. Food and agribusiness FY84 3,900 0 3,364 0 3,364Ram DisTicaretA.S ................ Capitalmarkets FY89 3,249 1,505 3,130 0 3,130Sanko Santral Konfeksiyon ve Ticaret

A.S ........................... Generalmanufacturing FY89 6,223 0 6,107 0 6,107Santral DikisSanayiiA.S . ........... Textiles FY89 7,338 0 7,124 0 7,124Sariville Turistik Tesisler A.S . ......... Tourism FY89 4,811 0 2,544 2,151 4,696Silkar Turizm Yatirim ve Isletmeleri A.S. Tourism FY86 5,806 0 6,361 0 6,361Trakya Cam Sanayii A.S ........... Industrial equipment and

machinery FY79,81,83,84, 62,495 31,395 32,988 7,126 40,114Turk Dis Ticaret Bankasi A.S . ........ Capital markets FY89 12,500 47,500 12,500 0 12,500Turkiye Sinai Kalkinma Bankasi, A.S. . Development financing FY64,67,69,72,73,

75,76,77,80,83 19,742 45,028 0 2,698 2,698Uluslararasi Endustri ve Ticaret Bankasi

A.S . Financialservices FY85,88 15,000 45,000 15,000 0 15,000Viking 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

UgandaDevelopment Finance Company of

Uganda Limited ................ Development financing FY85 375 0 0 375 375Sugar Corporation of Uganda Limited . Food and agribusiness FY84 8,000 0 8,000 0 8,000The Toro and Mityana Tea Company

Limited ....................... Food and agribusiness FY84 1,123 500 394 0 394Uganda Tea Corporation Limited ..... Food and agribusiness FY85 2,808 0 2,814 0 2,814

11,208 375 11,583

UruguayAstraPesqueriasUruguayasS.A. Food andagribusiness FY79,83,86,89 9,646 0 6,934 2,250 9,184AzucitrusS.A ........... ......... Foodandagribusiness FY85 9,972 0 7,733 2,400 10,133SurlnvestCasaBancariaS.A ........ Capitalmarkets FY89 12,586 10,000 2,730 1,786 4,516

17,396 6,436 23,832

VenezuelaC.A. Venzolana de Cementos ........ Cement and construction materials FY88 10,000 0 10,000 0 10,000Operaciones al Sur del Orinoco ...... Iron and steel FY89 37,375 35,750 37,375 0 37,375PolipropilenodeVenezuela ......... Chemicals and petrochemicals FY89 33,000 14,000 40,000 0 40,000

87,375 0 87,375

Yemen Arab RepublicMarib Agriculture Company, YS.C ..... Food and agribusiness FY87 2,703 0 2,400 303 2,703National Company for Vegetable Oil

and Ghee Industries Limited ....... Food and agribusiness FY85 4,652 0 4,137 0 4,137Yemen Battery Manufacturing

Company, YS.C ................. General manufacturing FY84, 85 3,797 349 3,250 547 3,797Yemen Hunt Oil Company .......... Energy FY86 9,000 0 3,375 0 3,375

13,162 851 14,012

YugoslaviaBelisce-Bel Tvornica Papira,

Poluceluloze i Kartonaze-Belisce .. Timber, pulp and paper FY73,81 30,976 39,889 9,336 0 9,336Frikom Ro Industrija Smrznute Hrane .. Food and agribusiness FY77,87 5,427 1,000 252 0 252Ina-Naftaplin ..................... Energy FY85 28,873 8,909 15,023 0 15,023lndustrija Za Avtomobilski Delovi i

Traktori-"Ruen" Kocani ......... Automotive industry FY82 10,631 0 7,900 0 7,900InstitutZa Fizikalnu Medicinu I

Rehabilitaciju-Dr SimoMilosevic-Igalo ................ Services FY82 19,149 0 17,224 0 17,224

International Investment CorporationforYugoslavia ........ .......... Developmentfinancing FY70 1,813 188 0 1,105 1,105

Investiciona Banka Titograd-UdruzenaBanka .. Tourism FY80 21,000 0 7,000 0 7,000

86

Appendix E

Investment neld for theOr ginal Corporation (incluidingo

Fiscal years in Comm trments undisbursed balances)COUNTRY, REGION OR OTHER AREA which comm tments Total Total Equity Total loansAND OBLIGOR Sector were made IFC Syndications Loans (at cost) and equity

Yugoslavia (continued)ISKRA .. ........... Industrial equipment and

mnachinery FY85, 89 22,668 10,600 22,562 0 22,562Jugobanka-Udruzena Banka

Beograd ... .. .... F nancial services FY86 25,445 10,360 26,834 0 26,834Ljubljanska Banka-Zdruzena Banka . Financial services FY83, 86 71,149 30,11 7 67,554 0 67,554Small-Scale Enterprise Project (Loan to

Eight Banks)...........Financial serv ces FY60 26,000 4,233 8,695 0 8,695Radoje Dakic ........... Industrial equipment ano

machinery FY80 18,700 0 7,013 0 7,013Sour Energoinvest ........ Industrial equipment ano

machinery FY85 1 5.160 0 13,603 0 13,603Tovarna Avtomobilov in Motorjev

Maribor ........ Automotive industry FY71, 80, 8-1' 35,390 869 25,698 0 25,698Tovarna Avtopnevmatike

"Sava-Semperit". .. II.... Automot ye industry FY72, 78, 8(1,88 26,815 1,341 12,722 0 12,722Tvornica Kartona f Ambalaze Cazin ... Timber, pulp and paper FY77 10,821 7,366 3.766 0 3,766UNIAL-Tovarna Glinice in Aluminija

Boris Kidric ......... .Nonferrous metals FY86 35,603 0 34,917 0 34,917Vojvodjanska Banka-Udrezena Banka . Financial services FY87, 89 51,940 31,094 50,023 0 50,023

330,122 1,105 331,228

ZaireGrands H6telsdu Zare, S.Z.A.R.L....Tourism FY85 15,000 0 12.000 0 12,000Soci4tb Financi6re de D6veloppement . Development financing FY70, 85 1,297 0 0 1,297 1,297Soci4t6 Textile de Kisangani, S.Z.A.R L Textiles FY85 9,065 0 8,863 575 9,438Utexafrica, 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

ZambiaDevelopment Bank of Zambia.....Development financing FY76 545 0 0 545 545Gwembe Valley Development

Company Limited ........ Fooo and agribusiness FY88 4,500 0 3,700 800 4.500Kafue Textile of Zambia Limited .... Textiles FY80, 85 10,746 0 11,593 0 11,593Masstock Zambia Limitede.. .... Food and agribusiness FY89 8,000 0 8,000 0 8,000Mpongwe Development Company

Limited ............ Food and agribusiness FY85 2,121 0 2,216 293 2,509Zambia Beta Shoe Company Limited . . General mnanufacturing FY72, 73 1,146 1,131 0 228 228Zambia Consolidated Copper Mines

Limited ............ Nonferrous metals FY80, 82 45,142 8,000 23,750 0 23,750Zambia Hotel Properties Limited....Tourism FY84 7,500 13,509 7,500 0 7,500

56,759 1,866 58,625

ZimbabweCrest Breeders International (Private)

Limited ........... Food and agribusiness FY86 5,805 0 4,999 625 5.624udc Limited ........ ... Capital markets FY85, 87,E9 11,911 0 9,972 416 10,387Wankie Colliery Company Limited . ... Mining FY81 20,000 16,000 5,250 0 5,250

20,221 1,041 21,262

Regional InvestmentsAfrica

SIFIDA Investment Company, SA. .. Development financing FY71, 76, E;5 3,773 1,940 0 635 635AfriGan Management ServicesCompany ....... .... Services FY89 1,400 0 0 1.400 1,400

AsiaSEAVI Project .......... Capital markets FY85 1,050 0 0 1,050 1,050

Latin AmericaNew World Investment Fund....Financial services FY89 12,500 0 0 12,500 12,500

0 15,585 15,585Worldwide Investments

Emerging Markets Investment Fund ... Financial services FY88 10,000 0 0 10,000 10,000Emerging Markets Growth Funo, Inc. . Financial services FY88 18,911 0 0 18,841 18,841

0 28,841 28,841Other (Taiwan, China)2

Asia Cement Corporation.......Cement and construction materials FY70 4,019 200 0 36 36Total 3,472,158 572,492 4,044,650

87

International Finance Corporation

Investment Portfolio (continued)June 30, 1989Expressed in United States dollars (in thousands)

SummaryJUNE30, 1989 JUNE30, 1988

Equity Total Loans Equity Total LoansLoans (at cost) and Equity Loans (at cost) and Equity

INVESTMENTS HELD FOR THE CORPORATION $3,472,158 $572,492 $4,044,650 $2,847,915 $526,192 $3,374,107Undisbursedbalances 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

INVESTMENTS HELD BY THE CORPORATION FORPARTICIPANTS

Total $ 923,030 $ 349 $ 923,379 $ 895,532 $ 460 $ 895,992Undisbursed balances 183,293 - 183,293 197,139 - 197,139

Disbursed balances $ 739,737 $ 349 $ 740,086 $ 698,393 $ 460 $ 698,853

TOTAL INVESTMENTS HELD FOR THE CORPORATION AND FORPARTICIPANTS

Total $4,395,188 $572,841 $4,968,029 $3,743,447 $526,652 $4,270,099Undisbursedbalances 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'sinvestment, and funds to be provided by other financial institutions in association with IFC, where IFC has rendered material assistance in mobilizing thosefunds.Original commitments are composed of disbursed and undisbursed balances. The undisbursed portion is revalued at current exchange rates while thedisbursed portion represents the cost of the commitment at the time of the disbursement. Loan investments held for the Corporation are revalued at the currentexchange rates.

Note 2 Represents investments made at a time when the authorities on Taiwan represented China in the International Finance 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

Intemnational Finance Corporation

Statement of Cumulative Gr-oss Commitments Appendix FJune 30, 1989In thousands of United States dollars

COUNTRY COUNTRYREGION OR Number of Cumulative Gross Commitments (1) REGION OR Number of Cumulative Gross Commitments (1)OTHER AREA Enterprises IFC Syndications Total OTHEF AREA Enterprises IFC Syndications Total

Afghanistan ...... 1 $ 322 $ 0 $ 322 Malaysia ....... 8$ 37,742 $ 12,907 $ 50,649Argentina ....... 34 518,837 127,058 645,895 Mali ......... 2 2,932 0 2,932Australia........2 975 0 975 Mauritania....... 1 10,448 9,558 20,006Bangladesh ...... 5 12,842 4,155 16,997 Mauritijs ....... 3 8,259 98 8,357Barbados ....... 2 1,550 0 1,550 Mexicc.........40 610,337 508,787 1,119,124Bolivia ........ 7 19,487 1,000 20,487 Morocco........12 150,522 69,140 219,662Botswana ....... 1 607 0 607 Mozarrbique...... 2 10,250 0 10,250Brazil.........67 962,931 527,442 1,490,373 Nepal......... 2 8,094 0 8,094Burkina Faso......1 542 0 542 Nicaragua....... 3 8,543 929 9,472Burundi........1 5,878 0 5,878 Niger......... 1 2,267 0 2,267Cameroon.......12 28,595 253 28,848 Nigeria ........ 10 65,004 3,521 68,525Chile ......... 13 336,965 52,100 389,065 Oman......... 1 2,029 0 2,029China ... ..... 5 44,261 0 44,261 Pakistan........24 184,315 126,987 311,302Colombia . ...... 34 176,486 54,821 231,307 Panarm-a........ 3 55,100 0 55,100Congo, People's ParagLuay ....... 4 14,650 0 14,650

Republic ofthe .... 4 7,925 0 7,925 Peru ......... 16 81,695 3,621 85,316Costa Rica.......4 7,997 217 8,214 Philippines.......33 228,691 23,533 252,224C6te d'lvoire ...... 7 26,393 0 26,393 Polanc ........ 1 15,044 0 15,044Cyprus ........ 4 5,270 597 5,867 Portugal........ 4 25,528 11,000 36,528Dominica ....... 1 700 0 700 Rwanca........ 2 1,308 0 1,308Dominican Republic .. 5 22,914 2,400 25,314 Senegal........ 8 51,899 755 52,654Ecuador........8 44,360 1,236 45,596 Seychelles....... 1 9,132 0 9,132Egypt, Arab Republic of .13 166,240 73,500 239,740 Sierra L-eone ...... 1 2,050 0 2,050El Salvador.......2 1,074 0 1,074 Somalia........ 2 1,351 0 1,351Ethiopia........4 20,078 3,490 23,568 Spain......... 5 19,048 1,685 20,733Fijil..........4 20,792 0 20,792 Sri Lanka ....... 8 25,526 13,672 39,198Finland ........ 4 1,075 2,073 3,148 Sudan ........ 6 26,511 6,489 33,000Gabon ........ 3 85,671 110,000 195,671 Swaziland ....... 4 24,401 0 24,401Gambia, The......1 2,823 0 2,823 Tanzar ia........ 4 12,288 712 13,000Ghana ........ 4 33,000 27,500 60,500 Thailarnd........22 222,949 139,558 362,507Greece ........ 7 26,006 41,107 67,113 Togo ......... 3 10,242 0 10,242Grenada........1 6,000 0 6,000 TrinidaJ and Tobago. .... 5 38,160 150,000 188,160Guatemala ...... 3 18,200 0 18,200 Tunisia ........ 13 40,241 2,324 42,565Guinea ........ 4 23,443 0 23,443 Turkey ........ 37 402,249 196,176 598,425Guyana........1 2,000 0 2,000 Uganca........ 6 15,836 1,588 17,424Haiti ......... 1 1,500 0 1,500 Uruguay........ 5 36,954 10,000 46,954Honduras ....... 4 4,927 6,101 11,028 VeneZLiela ....... 11 110,585 51,661 162,246Hungary........4 36,657 11,375 48,032 Yemen Arab Republic. .. 5 22,552 1,099 23,651India ......... 44 514,193 96,474 610,667 Yugoslavia.......25 510,274 200,339 710,613Indonesia ....... 16 108,280 78,281 186,561 Zaire..........7 42,704 0 42,704Iran, Islamic Republic of .7 34,343 8,193 42,536 Zambia ........ 10 85,072 22,640 107,712Israel.........1 10,500 0 10,500 Zimbabwe....... 3 37,717 18,000 55,717Italy ......... 1 960 0 960 Emerging MarketsJamaica........10 35,749 926 36,675 Growth Fund/Jordan ........ 6 46,810 50,250 97,060 Emerging MarketsKenya ........ 15 95,334 35,667 131,001 lnve3tment Fund ... 3 41,411 0 41,411Korea, Republic of....19 185,188 45,135 230,323 Regionial:Lebanon ....... 4 6,505 2,600 9,105 Africa........ 2 5,173 1,940 7,113Lesotho........1 330 0 330 Latirn America..... 1 10,000 0 10,000Liberia ........ 2 9,202 1 9,203 Asia ........ 1 1,050 0 1,050Madagascar ...... 4 28,420 0 28,420 Other (2)........ 1 8,444 1,400 9,844Malawi ........ 7 32,413 0 32,413 TOTAL ....... 786 $7,120,127 $2,954,071 $10,074,198

Note (1): Cumulative commitments are composed of disbursed and undisbursed balances. Thea undisbursed portion is revalued at current exchange rates while the dis-bursed portion represents the cost of the commitment at the time of disbursement.

Note (2): Represents investments made at a time when the authorities on Taiwan represented Chine in the international Finance Corporation (prior to May 1 5,1 980).

89

IFC Management

* President . ............................................................................ Barber B. ConableExecutive Vice President .William S. Ryrie

Vice President, Investment Operations ........................... ............................ Judhvir ParmarVice President, Portfolio and Advisory Operations ....... ............... ........................ Wilfried E. KaffenbergerVice President, Finance and Planning ....................................................... Richard H. Frank

Vice President and General Counsel ........................................................ Jose E. CamachoVice President, Engineering ............................................................... Makarand V. Deheiia

* Secretary . .......................................... ................................. Timothy T Thahane

INVESTMENT DEPARTMENTS'Director, Department of Investments, Africa I .................................................. Andre G. Hovaguimian

Divisional Manager-Benin, Burkina Faso, Cameroon, Congo (People's Republic of the), C6te d'lvoire,Gabon, Ghana, Mali, Niger, Togo .................................................... Philippe Lietard

Divisional Manager-Gambia, Guinea, Guinea-Bissau, Liberia, Mauritania, Morocco, Senegal, SierraLeone, Tunisia ................................................................... G.K. van der Mandele

Director, Department of Investments, Africa 1/ .................................................. M. Azam K. AlizaiDivisional Manager-Botswana, Ethiopia, Kenya, Lesotho, Malawi, Mauritius, Mozambique, Seychelles,

Swaziland, Tanzania, Uganda, Zambia ............................................... Michael DixonDivisional Manager-Burundi, Djibouti, Madagascar, Nigeria, Rwanda, Somalia, Sudan, Zaire,

Zimbabwe V.................................................................... Karl VoltaireDirector, Department of Investments, AsiaI .................................................. Torstein Stephansen2

Divisional Manager-China, Indonesia, Kiribati, Papua New Guinea, Thailand, Vanuatu, Viet Nam ...... Sakdiyiam KupasrimonkolDivisional Manager-Fiji, Malaysia, Philippines, Republic of Korea, Solomon Islands, Tonga, Western

Samoa ........................................................................ Vijay K. ChaudhryDirector, Department of Investments, Asia /1 ................................................... Jemal-ud-din Kassum

Divisional Manager-India, Myanmar* *, Nepal ............................................ Athishdam TharmaratnamDivisional Manager-Afghanistan, Bangladesh, Maldives, Pakistan, Sri Lanka ...................... Damian von Stauffenberg

Director, Department of Investments, Europe and the Middle East .................................. Douglas GustafsonDivisional Manager-Cyprus, Greece, Portugal, Spain, Turkey, Yugoslavia ........................ Jean-Philippe F. HalphenDivisional Manager-Egypt (Arab Republic of, Hungary, Iran, Iraq, Jordan, Kuwait, Lebanon, Oman,

Poland, Saudi Arabia, Syrian Arab Republic, United Arab Emirates, Yemen Arab Republic .... .... Edward A. NassimDirector, Department of Investments, Latin America and the Caribbeanl ............................. Helmut Paul

Divisional Manager-Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua .... ........ Varel FreemanDivisional 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. SantosDivisional Manager-Bolivia, Brazil, Paraguay, Uruguay ...................................... VivekTalvadkarDivisional Manager-Argentina, Chile, Ecuador, Peru ........................................ Manuel Nunez

Director, Capital Markets Department ....................................................... Charles 0. SethnessDeputy 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 (ArabRepublic 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, Yemen Arab 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, International Securities Group .................................................. R. Michael Barth

SUPPORT DEPARTMENTSDirector, Business Development and Syndications' .................. . . ....................... Irving Kuczynski

Manager, Public Relations and Syndications ........ ...................................... Francis de C. HamiltonManager, Business Development .......................... ............................. Bruce H. MacLeodManager, Energy Unit ........... .................................................... Hugh Henry-May

Director, Economics Department, and Chief Economic Adviser .............. .. .................. Guy R PfeffermannManager, Foreign Investment Advisory Service .......................................... Dale R. WeigelLead Economist .................................. Javed HamidChief Operations Evaluation Officer .................................................. Walter 1. Cohn

90

Appendix G

Deputy Director, Engineering ............................. ................................ Andreas RaczynskiTechnical Manager, Agriculture and Forest Products ....... ........... .. ...................... Friedrich LuhdeTechnical Manager, Chemicals and Petroleum ........ ............ .. ........................ Gilbert HuntTechnical Manager, General Manufacturing ....................... ......................... Gopi Nath PuriTechnical Manager, Mining and Metals ......... .............. .. ........................... Claus A. WestmeierManager, Technology and Development ........................ ......................... Alakadri K. Bose

Manager, Caribbean Project Development Facility ....... ............ .. ........................ Paul R. HincheyCoordinator, Africa Project Development Facility ........ ............ .. ........................ Alexander N. Keyserlingk

Manager, Africa Project Development Facility (Abidjan) ................. .. ..................... Andre J. CraccoManager, Africa Project Development Facility (Nairobi) ................. .. .................... Richard P Parry6

Finance and PlanningPrincipal Financial Adviser ............................. ................................ Vasant H. KarmarkarSenior Adviser, Information Technology ......... ............. .. ........................... Allen F ShapiroManager, Accounting .............................. .................................. Fayezul H. Choudhury

Director, Finance and Budgeting ............................ .............................. Eduardo CostaManager, Financial Planning and Policy ......... ............. .. ........................... Harold RosenManager, Financial Operations ............................ .............................. Bernardo FrydmanManager, Planning and Budgeting ....................................................... Peter A. Dickerson

LegalDeputy General Counsel . .............................................................. Walter F Norris

Chief Counsel . .................................................................... Fernando CabezasChief Counsel . .................................................................... David G.T d'AdhemarChief Counsel ..................................................................... Daoud L. KhairallahChief Counsel .................................................................... Humphrey C. Winterton

OtherOperations Adviser . ............................................. ................. Nissim H. EzekielCoordinator, Africa Enterprise Fund .................................................... Guy C. Antoine

Personnel and AdministrationManager ........... .......................... ................................. Robert M. Voight

Portfolio and Advisory OperationsHead, Corporate Finance Services ..................................................... Peter C. JonesManager, Special Operations ......................................................... Rolando M. ZosaManager, Portfolio Operations Support Unit .............................................. John W Lowe

SPECIAL REPRESENTATIVES AND REGIONAL MISSIONS7

Special Representative in Tokyo ........................................................ Sugio HatanakaDeputy Special Representative in Tokyo .................................................. Mitchell AllandSpecial Representative in Europe (London) ............................................... Giovanni Vacchelli8

Special Representative in Europe (Paris) .................................................. Gunter H. Kreuter'Regional Mission in Eastern and Southern Africa (Nairobi) .................................... Ernest M. KepperRegional Mission in India (New Delhi) .................................................... Mohan WikramanayakeRegional Mission in Indonesia (Jakarta) .................................................. Mumtaz KhanRegional Mission in the Middle East (Cairo) ................................................ John H. StewartResident Mission in Nigeria (Lagos) ..................................................... Bahadurali JethaRegional Mission in North Africa (Casablanca) ............................................. Sami HaddadRegional Mission in the Philippines (Manila) ............................................... Richard L. RankenRegional Mission in Thailand (Bangkok) .................................................. Carlos M. TanResident Mission in Turkey (Istanbul) ..................................................... Reynaldo OrtizRegional Mission in Western Africa (Abidjan) ............................................... Hung NguyenIFC Adviser, Australasia (Sydney) .......... ............ ........................ Neil Paterson

These officers hold the same position in the International Bank for Reconstruction and DevelopmentFormerly Burma.

1 Drectors of investment departments and the Capital Markets Departm ent report to the Vice President, Irivestment Operations, on new business, and to the Vice President, Portfolio andAdvisory Operations, on portfolio superv sion matters.

2. Effective July 1,1989. Mr. Stephansen will retire after 22 years with theeCorporation. Mr Pho Ba Quan wmu succeed h m in this posit on.3. Effective July 1, 1989, Mr. Quan will become Director, Department of Investments, Asia 1, and Mr Richard P Parry wilt hold this postion4. Effective May 19, 1989, Mr Nicholas W Noon resigned from IFC to loin the private sector; effective July 17,1989, Mr. Robert Graffam w 11 occupy this position.5. The D rector of the Business Development and Syndications Department reports to the Vice President, Engineering, on energy matters6 Effective July 1, 1989, Mr. Parry will become Divisional Manager, Department of Investments, Latn Amerca and the Caribbean l. Mr Ignacio D Maramba will replace him on September 1,

19897. Effective July 1, 1989, Mr. Torstein Stephansen will hold the new position of IFC Adviser in Scandinavia (Dslo).8. Effective September 1, 1989, Mr Christopher Bam will occupy this position.9. Effective September 30, 1989. Mr. Kreuter will retire after 27 years with the Corporation. Mr G ovanni Vavchelii will occupy this position effective September 1, 1989

91

International Finance Corporation

Headquarters Regional Mission in Jakarta Regional Mission in Western1818 H Street, N.W. LIPPO Building, 3rd floor AfricaWashington, D.C. 20433, U.S.A. JI. Rasuna Said, Kav. B-10 Corner of Booker Washington andTelephone: (202) 477-1234 Kuningan 12940 Jacques Aka StreetsTelex: ITT 440098 P.O. Box 324/JKT Cocody

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Telephone: 347-3739, 347-8081 Fax: 216151Tokyo Office Telex: 93110 I oKokusai Building, Room 913 Cable: IFCAI PO Box 465341-1, Marunouchi 3-chome Fax: 347-3738 P.O. Box 46534|<iR ~Nairobi, KenyaChiyoda-ku Chiyoda-ku ~~~~~~~~~~~~~~~~~~~~~~Telephone: 722200Tokyo 100, Japan Regional Mission in New Delhi Telex: 25303Telephone: 201-2310 55 Lodi Estate Fax: 339121Telex: 26838 P.O. Box 416Cable: INTBAFRAD New Delhi 110003, India c/o UNIDOFax: 211-2216 Telephone: 697 905, 617 241 Lowenstrasse 1

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and Southern Africa Cable: INTBAFRAD Cable: CORINTFINReinsurance Plaza, 5th & 6th Floors Fax: 616360 Fax: (202) 334-8855Taifa RoadP.O. Box 30577 Regional Mission in North Africa Eastern Caribbean Regional OfficeNairobi, Kenya 30 avenue des F.A.R. Musson Building, 2nd FloorTelephone: 24726, 338868 Casablanca, Morocco Hincks StreetTelex: 22022 Telephone: 312-888, 312-278 P.O. Box 259Cable: CORINTFIN Telex: 22606 Bridgetown, BarbadosFax: 338464 Fax: 315181 Telephone: 809-429-6298

Telex: 2473Resident Mission in Turkey Fax: 809-429-5809Mete Caddesi No. 24/3, TaksimIstanbul, TurkeyTelephone: 1432593, 1432126Telex: 24994Cable: CORINTFINFax: 1492476

92

International Finance Corporation1818 H Street, N.W.Washington, D.C. 20433, U.S.A.

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