960424

IFC to raise $160 million

for Turkey in 1996

ISTANBUL: The International Finance Corp (IFC) will provide $160 million in funds for Turkey in 1996, IFC executive vice-president Jannik Lindbaek said on Wednesday.

"In 1996, we plan to invest about $160 million in Turkey's private sector and mobilise a total of $200 million for these projects," he told reporters. "IFC's loan and equity investments in Turkey are in a broad range of sectors: manufacturing, financial, agribusiness and tourism."

He said the IFC had been channeling around $100 million per year to Turkey's private sector in recent years.

Turkey's Koc Bank on Monday signed a memorandum of understanding for an $85 million IFC funding package.

The bank will receive a $25 million six-year loan, with a grace period of three years, from the IFC and the remaining $60 million will be provided through a facility jointly structured by IFC and Credit Suisse, which will provide Koc Bank access to the U.S. financial markets.

Lindbaek said the IFC would continue support of large industrial companies, especially those concentrating on exports, so they could compete in a new customs union with Europe.

It would also seek to help Turkish companies expand into new markets, such as the newly independent states of the former Soviet Union and support infrastructure projects to meet the strong demand for power and other services, he said.

"The weakness of capital markets in Turkey is the lack of access to longer-term loans," Lindbaek told reporters.

"The reason for that is the rate of inflation and perceptions for the future...This is a continuing problem and must be tackled at the source, by tackling inflation...Tackling inflaton must remain a top political priority."

Turkey's year-on-year wholesale price inflation was 65.3 percent in March. Its end-1996 inflation target is 64 percent.-Reuter