Developmental Investment Activities
The IIC's developmental financing program targets small and medium-size
private companies in Latin America and the Caribbean that have limited
access to long-term financing.
IIC loans are denominated in United States dollars. Loan amounts may
be up to 33 percent of the cost of a new project or up to 50 percent of
the cost of an expansion project. Loan terms generally range from five
to eight years (up to a maximum of twelve years), including an appropriate
grace period. The loans, which are priced in accordance with international
market conditions, are usually variable in rate and based on LIBOR. In
certain cases, the IIC may provide convertible, subordinated, or participated
loans.
The IIC also makes equity investments of up to 33 percent of the investee
company's capital. At the end of the investment period, the IIC sells
its shareholding. Possible exit mechanisms include sale on the local stock
market, private placement with interested third parties, and sale to the
project sponsors under a prenegotiated share purchase agreement.
During 2001, the Corporation received sixty-three funding requests;
forty-four were not considered because they did not meet basic IIC criteria
regarding size, additionality, or perceived risk, among others. nineteen
proposals were considered at an initial stage. As a result, nineteen transactions
were submitted for consideration and approval by the Board of Executive
Directors.
Sixteen of the operations described below include loans totaling $98
million; three include equity investments totaling $30 million. This year's
three cofinanced loans will mobilize an additional $55 million in funding,
and the two investment funds in which the IIC acquired an equity participation
will further leverage the resources available for the region's small and
medium-size companies. The total cost of the projects financed as a result
of the operations approved by the IIC in 2001 is $673 million.
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