IFC APPROVES SPENDING FOR TWO SOUTH AFRICAN PROJECTS

[USIA]

USIS Washington File

20 January 1998

TEXT: IFC APPROVES SPENDING FOR TWO SOUTH AFRICAN PROJECTS

(Financing equivalent to about $40 million) (510)

WASHINGTON -- The International Finance Corporation (IFC) has approved
spending the financing equivalent to about $10 million in South Africa
to expand Cashbank's services and lending activities for low-income
communities within South Africa and about $30 million for Unicell
Paper Mills (Pty) Limited, to install and operate an integrated tissue
paper mill in Germiston.

IFC, a member of the World Bank Group, is the largest multilateral
source of equity and loan financing for private sector projects in
developing countries.

Following is an IFC news release on the projects:

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January 15, 1998
Press Release No. 980/66

First Rand Loans by IFC

IFC INVESTS US$40 MILLION IN SOUTH AFRICA

WASHINGTON, D.C., Jan. 15 -- The International Finance Corporation
(IFC) has approved financing amounting to US$40 million equivalent for
two projects in South Africa. The financing is being provided in local
currency and represents IFC's first rand-denominated loans as well as
IFC's first local currency loans worldwide.

IFC approved a loan of US$10 million equivalent for Cashbank, a bank
established in 1995 by a non-governmental organization, the Group
Credit Company, to service the needs and expand lending activities for
low-income communities within South Africa through the provision of
savings facilities as well as credit for housing, education, and
personal loans.

IFC also approved financing amounting to US$30 million equivalent for
Unicell Paper Mills (Pty) Limited, to install and operate an
integrated tissue paper mill in Germiston. The mill's technology will
provide important environmental benefits through its use of waste
paper as its raw material thereby reducing the harvesting of trees and
offering an alternative outlet to what is normally destined for city
dumps. The company is expected to employ about 260 people. Another 100
persons approximately will have the opportunity to independently
collect waste paper.

Mr. Cesare Calari, Director of IFC's Sub-Saharan Africa Department
said, "Besides local currency lending, employment creation, and the
economic empowerment of lower income groups, the projects are also
noteworthy for the following reasons. Cashbank will provide
sustainable and commercially based financing in the critically
important area of low-income housing, whereas Unicell will support
regional integration of the SADC (South African Development Community)
region and the widening of markets and distribution channels."

Mrs. Farida Khambata, Director of IFC's Treasury Department added, "We
are pleased to be able to offer loans in rand to our clients. For
companies which do not generate revenues in foreign exchange, this
will provide long-term local currency financing and protect clients
against risks of local currency depreciation. The availability of a
long-term rand/dollar swap market facilitates our ability to offer
loans customized to the needs of our clients."

IFC opened an office in Johannesburg in 1994. To date, the Corporation
has approved financing of US$100.3 million for 18 projects in South
Africa.

IFC, a member of the World Bank Group, is the largest multilateral
source of equity and loan financing for private sector projects in
developing countries.

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