IIC Approves An Equity Investment In The Central America Growth Fund To Strengthen And Modernize Small And Medium Enterprises In Central America And Panama


WASHINGTON, D.C. - On October 12, 2000, the Board of Directors of the Inter-American Investment Corporation (IIC)1 approved an equity investment of up to US$5 million in The Central America Growth Fund, L.P., a private equity investment fund whose aim is to invest mainly in securities of privately held small and middle market growth-oriented companies in Central America and Panama. The fund has an eight-year life and a target capitalization of US$50 million. The IIC's participation in the fund will help strengthen and modernize small and medium-size companies in Central America and Panama and help improve SME's corporate governance practices through active fund participation. By including IIC's environmental and occupational health and safety standards in the fund guidelines, the IIC will multiply its social effect and disseminate its guidelines to portfolio companies. The investment will have a catalytic effect by attracting other institutional investors and facilitating the flow of fresh capital to the region. The fund is expected to reach some ten final beneficiaries over its expected life, creating approximately 200 jobs and an estimated US$25 million in annual export earnings and contributing about US$100 million annually to the region's GDP.

1 The Inter-American Investment Corporation is a multilateral financial institution that is part of the Inter-American Development Bank Group. It provides financing (in the form of equity investments, loans, guarantees, and other instruments) and advisory services to private enterprises in Latin America and the Caribbean. The IIC's mission is to promote the economic development of its regional borrowing member countries by stimulating the establishment, expansion, and modernization of private enterprises, particularly those that are small and medium in size. The IIC has thirty-six member countries: twenty-five in Latin America and the Caribbean and eight in Europe, plus the United States, Japan, and Israel. For further information on IIC's activities please visit our web site at www.iadb.org/iic/ or contact Mr. Jorge Roldán at 202-623-3948.

Contact: Roldan Trujillo

Telephone: (202) 623-3922

Email: sylviasz@iadb.org