DEV. BANK

closed

The proposed credit to Development Bank of Solomon Islands is the second co-financing operation undertaken by IDA/IBRD with ADB and the first such operation in Solomon Islands. The proposed project will assist DBSI in providing needed finance for production investments in the agricultural, industrial, commerce, transportation and service sectors for the period 1981-82. The co-financing arrangements have been agreed with ADB according to a Letter of Credit Administration under which ADB will be the lead co-financing institution and will be responsible for the supervision of the project. The proposed project is expected to benefit about 500 subborrowers whose total fixed investment cost is estimated at US$8.4 million. The subprojects would help increase the involvement of the indigenous population in the economy and would generate much needed opportunities for earning cash incomes. The risks associated with the project stem from DBSI's relative lack of experience in development banking.