MIGA issued $21.6 million of coverage to Parmalat, S.p.A., of Italy for its loan guaranty in connection with the construction of a new bakery plant in Jundiai, Sao Paulo. Parmalat's guaranty covers a $24 million loan from the Bank of America, N.A., toward establishment of Parmalat's Brazilian subsidiary, Administracao Participacoes Ltda. MIGA guarantees cover the risks of currency transfer and expropriation.
The bakery will produce an estimated 40,000 tons of confectionery goods annually. Parmalat will source the most important raw materials, such as oil, sugar, wheat flour, and packaging, in the Jundiai region, boosting the local economy. The project's output will initially substitute for some imports; in subsequent years Parmalat expects to export its products to other Latin American markets. The investment will create more than 1,000 jobs.
