1818 H STREET, N.W., WASHINGTON      D. C. 20433    TELEPHONE:   EXECUTIVE   3·6360




             Bank Press Rel.ease No. 71/91               Subject:      $50.0 million loan for
             December 2 3, 19 71                                       industry in Iran


                  Iran's efforts to sustain the momentum of industrial growth will be.

             assisted by a World Bank loa11 of $50.0 m:f.llion to the Industrial and Mining

             Development Bank of Iran (Ir-IDBI).     The loan will provide IMDBI with most

             of the funds it needs to finance its clients' requirements for imported goods

             and services over the next two years.

                  IMDBI    was   established in 1959 as a privately owned development finance

             company.     It has become the major source of long-term institutional finance

             for private industry in Iran and in ~.arch 1971, its cumulative connnitreents

•••          for loans and equity investments reached $275 million equivalent.

             grown rapidly in recent years, and its          annue1 rate of commitments has
                                                                                                    It has



             doubled in the past two years to about $66 million equivalent.

                  Iran's economy has been growing at an annual rate of over 10% during

             the past five years.       Industry has been growing at an even faster rate of

             14% a year.     The Govemment of Iran assigns a major role to the private

             sector in industrial development and gives high priority to increasing the

             export capacity of Iranian industry.          Recently industry in Iran has moved into

             the production of intermediate and capital goods.

                  IMDBI has contributed to the rapid growth of industry by promoting

             industrial projects, setting up new firms in non-traditional fields,

             attracting direct foreign investment and introducing new technology.                      The



•            new industrial proj.ects promoted by IMDBI include those in industries


                                                                                            /more
                                                                                    •
 Bank P.R. No. 71/91 -- 'Iran -- IMDBI
                                    - 2 -

manufacturing metal products, non ..·metallic minerals, transport· equipment,

electrical and other machinery and rubber and oil-based products.

      In many instances, IMDBI's promotional work. has been undertaken in

partnership with forei.gn investors who also participate in the share cap:! tal

of the new companies.   Through the financing of its projects,: IMDBI has been

an important instrument in raising ftmds in Iran and ab·road.      IMDBI is also·

working to develop the local capital market and, toward this end has helped

to establish the Tehran Stock Exchange.

     The World· Bank has been IMDBI 's major source of foreign exchange.

The present loan of $50.0 million is the seventh to be made by the World




                                                                                    ••
Bank to IMDBI and brings total World Bank lending to IMDBI to approximately

$205 millior,.

     The loan to IMDBI will bear interest at 7~% per year, and will be

guaranteed by the Government of Iran.       Repayments to the World Bank will

conform approximately to repayments received by IMDBI on its loans financed

out of the World Bank· fund.




                                  - 0 ..~




                                                                                    •