IFC extends $15 million credit facility to Vinavil Egypt to boost production and create jobs
IFC, a member of the World Bank Group, is providing a $15 million loan mainly in Egyptian pounds to Vinavil Egypt for Chemicals, a leading manufacturer of construction-related materials, to help the company boost production and create jobs.
IFC’s financing will help the company double its annual production of chemical binders and emulsions, which are used in paints for industrial and commercial projects. IFC is also addressing the need for local currency financing by providing the loan largely in Egyptian pounds, a first for the organization.
This will address Vinavil Egypt’s need for flexible borrowing in both Egyptian pounds and US dollars, and create a model for future multi-currency loans.
“The flexibility of borrowing in both Egyptian pounds and US dollars will enable our company to make long-term capital investments and support our working capital,” said Gianmaria Palazzolo, Managing Director of Vinavil Egypt. “The financing from IFC will help us expand in Egypt and become a regional exporter of specialty construction chemicals, creating jobs, especially for highly skilled workers.”
The financing is part of IFC efforts to boost the development of Egypt’s construction industry, an important source of employment and a key economic driver. It accounts for more than 4 percent of Egypt’s gross domestic product and employs 12 percent of Egyptian workers.
The industry is also one of the country’s fastest growing sectors, having grown by 10 percent in 2017.
“Supporting the development of Egypt’s construction industry is key to spurring economic growth,” said Mouayed Makhlouf, IFC Director for the Middle East and North Africa. “Local currency financing, which we plan to expand, is also vital for sustainable private sector investment. Providing the loan in Egyptian pounds ensures the currency is more accessible to local companies, which can help boost crucial industries like manufacturing and construction.”
The investment is part of IFC’s wider efforts to promote private-sector-led growth in Egypt. In the last 10 years, IFC has invested close to $3 billion in the country’s private sector, and is aiming to invest a further $1.5 billion this year, including money mobilized from other investors.
