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Projects

Project Brief

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
Baz International Pharmaceutical Company (BIPC)
Project ID
6260
Fiscal year
2007
Status
Not Active
Guarantee holder
Business Humanitarian Forum Association (BHF)
Investor country
Switzerland
Host country
Afghanistan
Environmental category
C
Sector
Services
Gross exposure
 $0.3 million
Project type
SIP
MIGA has issued a guarantee of $365,364 to Business Humanitarian Forum Association of Geneva, Switzerland, for the establishment of a pharmaceutical manufacturing plant in Afghanistan. Another $64,476 is being guaranteed by the MIGA-administered trust fund, Afghanistan Investment Guarantee Facility. The two guarantees cover Business Humanitarian Forum Association’s $477,600 stake in Baz International Pharmaceutical Company (BIPC). The coverage, for up to three years, will protect the investment against the risks of transfer restriction, expropriation, and war and civil disturbance.

The project involves the establishment of a pharmaceutical company in Puli-E Charqui industrial area, approximately 8 kilometers from the Kabul city center. The company will produce essential generic medicine locally, which will help improve the availability, quality, and access to essential medicines in Afghanistan.

The health sector in Afghanistan remains underdeveloped. Due to the shortage of essential medicines, diseases such as acute respiratory illnesses, diarrhea, pneumonia and typhoid continue to spread through the Afghan population.

The plant is expected to produce 300 to 400 million tablets per year. Initial production will consist of antibiotics and analgesics, but can be expanded to include other pharmaceutical products in the future.

At start-up, the company is expected to employ 45-50 local staff, eventually going up to 100. The project is in line with the Afghan government’s strategy to rehabilitate the infrastructure needed for the delivery of essential public services in the health sector, thereby fostering economic development and better quality of life in the country. In addition, the project is expected to contribute up to $500,000 annually to the Afghan government in the form of taxes and import duties.

The plant is expected to have a strong demonstration effect on other investments in the country. It is the first initiative focused on producing basic medicines, adhering to international standards of production and quality control. One of BIPC’s project partners—the European Generic Medicines Association—has designed the technical assistance, standard operating procedures, and quality assurance programs for the company. This will be one of the first concrete reconstruction projects led by the international community in partnership with local entrepreneurs to rehabilitate Afghanistan’s manufacturing infrastructure.

MIGA’s participation in the project is aligned with several agency priorities: encouraging investment in conflict-affected nations, and improving access to financing options for small local businesses. The agency’s support for the project is also in line with the broader World Bank Group goals in Afghanistan, particularly in promoting growth of the rural economy; improving rural livelihoods; and supporting the growth of a formal, modern, competitive private sector.

 
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