SEF Tesinma Coachbuilding Project

completed

SUMMARY OF PROJECT INFORMATIONProject Name Eritrea-TesinmaRegion Sub-Saharan AfricaSector Automotive (Coachbuilding)Project No. 008224Projected Board Date: June 20, 1997Company Name: TesinmaTechnical Partners and/or Major Shareholders: The main sponsors are Mr. Tesfay Yhdego (42) and his wife Ms. Delia Brox.  Mr. Tesfay is an Eritrean national who has lived for over 20 years in Germany and obtained a degree in Production Engineering.  Ms. Brox, a German national, is also a qualified Production Engineer and both have had over 15 years experience in designing factories for batch and jobbing production. An Italian bus and coach builder (Cacciamali S.P.A) is to collaborate with Tesinma either as a technical partner or as a shareholder.Project Cost and proposed IFC investment Project Cost: US$1.91 million IFC Investment: US$0.43 million (loan), and US$0.25 million (equity)Location of Project and Description of Site:  Dekemhare, a town earmarked for industrial development about 40 kilometers west of Asmara, Eritrea’s capital.Description of Company and Purpose of Project:  The venture will trade under the name of Tesinma, a newly established Company whose majority shareholder will be Mr. Tesfay. The project aims to assemble buses, dump trucks and flat trucks using completely knocked-down (CKD) kits.  Because Eritrea has the necessary skilled labor but much lower wage costs, it will be possible to assemble vehicles more cheaply than those presently imported as completely built-up units (CBU). Tesinma also plans to export to neighboring countries such as Ethiopia and Saudi Arabia. The Company also plans to provide maintenance services which are scarcely available in the country at present.Environmental Category and Issues:  This is a category B project according to IFC''s environmental review procedure.  Environmental issues associated with this project include liquid and solid wastes disposal; handling and storage of hazardous materials, fuel, and oil; recycling of metals, solvents, oil, and motor fluids.  Occupational health and safety issues include employee exposure to dust, heat, noise and hazardous materials, and fire prevention and emergency evacuation.  The sponsor has submitted preliminary information identifying key mitigation measures, these include: proper storage of paints, thinners, and fuel; employee safety training; and provision of fire extinguishers.  Solid waste will be recycled as  appropriate, and it is expected that sewage will be discharged via soakaway. The project ERS is expected to be submitted to the PIC by May 16, 1997.Date SPI sent to PIC April 15, 1997 For additional Information contact: Corporate Relations Unit  -  telephone (202) 473-7711  -  facsimile: (202) 974-4384Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).