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Press Release

FY1996 First Quarter Guarantee Results: Strong Performance

FY1996 First Quarter Guarantee Results: Strong Performance

Washington, D.C., October 25, 1995 — The Multilateral Investment Guarantee Agency (MIGA) today announced first quarter results for fiscal year 1996, starting on July 1. MIGA issued nine investment guarantee contracts for US$261 million in coverage during this period. (This compares with seven guarantee contracts for US$130 million in issued coverage in the first quarter of fiscal year 1995). In addition, MIGA has five commitment letters outstanding for US$127 million in potential additional liability.

Mr. Leigh P. Hollywood, Vice President, Guarantees, expressed satisfaction with this strong performance, commenting that "these results set a firm foundation for continued growth in fiscal 1996."

MIGA-insured projects in the first quarter included investments in Jamaica, Kazakhstan, Kuwait, the Kyrgyz Republic, Peru, and Saudi Arabia. MIGA and the International Finance Corporation supported Waertsilae Power Development, Inc.'s investment in the construction and operation of a 74-MW barge-mounted diesel power plant at Old Harbour, Jamaica. The project, covered by a US$30 million MIGA guarantee, will improve Jamaica's electrical power system by contributing significantly to the country's total installed generating capacity. The absence of a plentiful, reliable supply of electricity has constrained the development of local industry.

In Kazakhstan, MIGA issued US$13.3 million of coverage to Efes Sinai Yatirim Ve Tikaret A.S., a Turkish beverage company, for its equity investment in Coca-Cola Almaty Bottlers (CCAB). CCAB will produce, bottle, and distribute Coca-Cola beverages using modem techniques. The project, which will generate positive developmental benefits for both Kazakhstan and Turkey, is a result of MIGA's efforts to encourage the flow of private investment both to and between developing countries.

Mr. Akira Iida, MIGA's Executive Vice President, noted: "Intra-regional investment as typified by this Kazakhstan project plays a unique and valuable role in promoting economic growth for developing host and investor countries."

In its first project in Kuwait, MIGA issued US$50 million in coverage to Union Carbide Corporation (UCC) for its equity investment in the construction and operation of a petrochemical facility in the Shuaiba Industrial Complex. The project, a joint venture with Petrochemicals Industries Company of Kuwait, will manufacture ethylene, polyethylene, and ethylene glycol for export and sale locally. It is expected to generate over US$500 million in annual export earnings and create over 700 permanent local jobs for Kuwaiti and other developing country nationals. In addition, the project will have a positive impact on the development of local industries that use polyethylene, such as packaging and plastics.

MIGA also covered its first project in the Kyrgyz Republic during this quarter. The Agency issued US$45 million in reinsurance coverage to the Export Development Corporation of Canada for Cameco Corporation's investment in the Kumtor gold mine. The mine is the largest foreign private investment in the country and is expected to be a major source of scarce foreign exchange for the host government.

In Peru, MIGA issued US$27 million in coverage to Volvo Truck Corporation for its loan guaranty to expand the customer financing services of its subsidiary, Volvo Peru. The expansion is expected to result in a substantial increase in local sales of trucks and buses, as well as greater local sourcing of parts and components. In addition, the long-term customer financing provided by Volvo Peru is a first for the Peruvian truck and bus market.

MIGA also provided US$10 million of coverage to Guardian Glass Investments S.A. for its investment in the establishment of a glass manufacturing facility in Saudi Arabia. The project enterprise, a joint venture company, Will provide high-quality glass at competitive prices to downstream glass fabricators and create additional jobs in related industries.

In addition to providing guarantees to foreign investors, MIGA offers a range of technical assistance services to its developing and transition member countries to help them attract foreign capital. As part of this effort, MIGA recently issued its first edition CD-ROM on investment opportunities and conditions in the mining sector in Africa. The Agency also demonstrated the IPAnet (Investment Promotion Agency Electronic Network) at the recently concluded World Bank Annual Meetings in October. The IPAnet is a global information clearing-house and communications network on foreign investment in developing and transition countries.