The International Finance Corporation (IFC), a member of the World Bank Group, is providing a $15m 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, according to a press statement on Wednesday.
The statement said that the 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. The IFC is also addressing the need for local currency financing by providing the loan largely in Egyptian pounds, a first for the organisation. This will address Vinavil Egypt’s need for flexible borrowing in both pounds and dollars, and create a model for future multi-currency loans.
“The flexibility of borrowing in both Egyptian pounds and dollars will enable our company to make long-term capital investments and support our working capital,” said Gianmaria Palazzolo, managing director at Vinavil Egypt, adding, “the financing from the 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 the IFC’s 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% of Egypt’s GDP and employs 12% of Egyptian workers. The industry is also one of the country’s fastest growing sectors, having grown by 10% in 2017.
Mouayed Makhlouf, IFC director for the Middle East and North Africa, said that supporting the development of Egypt’s construction industry is key to spurring economic growth.
Makhlouf noted that local currency financing, which the IFC plans 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 the IFC’s wider efforts to promote private sector-led growth in Egypt. In the last 10 years, the IFC has invested close to $3bn in the country’s private sector and is aiming to invest a further $1.5bn this year, including money mobilised from other investors.
Vinavil Egypt is a subsidiary of Mapei SpA, a global IFC chemicals client. It was established in 2001 and is a subsidiary of Vinavil SpA, which in turn is wholly-owned by Mapei, a global leader in specialty construction chemicals used in infrastructure projects, including housing, underground construction, ports, and marine industry. The company is a three-generation family-owned businesses, founded in 1937 and headquartered in Milan, Italy. Mapei has 82 subsidiaries, 28 research and development centres, and 79 production plants in 34 countries.