Mekong Financing Line

completed

Summary Of Project Information (SPI)Project NameCambodia, Laos and Viet Nam - Mekong Financing Line      RegionAsiaSectorProject No007543Projected Board DateApril 30, 1996Company NameMekong Financing Line (MFL, Financing Line)Technical Partner and/or Major Shareholders Not applicable. Project is an IFC financing line, and shareholders of individual projects are not yet known, although they will generally be small, private local entrepreneurs.Project Cost Including proposed IFC investment MFL will have an initial commitment amount of US$5 million, which should fund projects with a total cost of US$25-30 million. The Financing Line’s investments will range in size from US$50,000 to US$750,000. The average size of a Financing Line investment is expected to be about $500,000, suggesting a total portfolio of 10 companies.     Location of project and Description of site The Mekong Financing Line (MFL, or the Financing Line) will lend to and make investments in small companies in Viet Nam, Cambodia and Laos. MFL will seek a geographical distribution that reflects the relative populations of Cambodia, Laos and Viet Nam. Accordingly, it is expected that as much as 75% of the Financing Line may be invested in Viet Nam. Description of Company and Purpose of Project The Financing Line is designed to help support the development of the local private sector in the region by providing seed capital to small private companies. MFL will operate for a trial period of 3 years and will work closely with the Mekong Project Development Facility (MPDF) -- a donor-funded, IFC-managed Facility that will assist small businesses with developing business plans and obtaining financing. The MFL would be allowed to provide up to 40% of project cost. A maximum exposure of 50% of project cost might be considered on an exceptional basis. Equity investments would normally not exceed 25% of the investee company’s outstanding share capital, and the Financing Line would never be the largest single shareholder in a company.Environmental Category and Issues Individual investments made under the initiative will be subject to the World Bank’s and host countries’ environmental and occupational safety guidelines. MFL’s investment procedures will include consultation with IFC’s environmental review staff; IFC’s environmental review procedures and disclosure policies will apply to all MFL investments. As noted above, the Financing Line may seek to utilize local environmental specialists for environmental review purposes, under the review and supervision of IFC’s Technical and Environmental Unit. IFC’s Environmental Unit has advised that an ERS is not required for this project, however, environmental reviews will be prepared for all sub-projects.     Date SPI sent to PIC April 4, 1996For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365