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November 15, 1993

PLENTY OF LOAN CAPITAL AVAILABLE BUT NOT MUCH PROSPECT OF COMPUTER BUSINESS: WORLD BANK OFFSHOOT

By CBR Staff Writer

Despite there being plenty of loan capital potentially available for Russia, Tim Nulty, principle economist at the telecommunications and information technology division at the International Finance Corp says there will be serious problems in distributing this money to computer projects for the foreseeable future. The International Finance Corp is the private sector side of the World Bank. It will invest in projects only if its share is less than 25% of the total loan, and it is not prepared to be the largest single investor. We find it difficult to do projects worth less than $3.5m to $4m. Unless some kind of devolved structure can be set up to distribute money in the regions, International Finance-backed projects in the computer sector look unlikely, he says. The best prospects for computer suppliers are in contracts with utilities and other infrastructure projects where computer purchases will be one of many components. From the point of view of investment opportunities, he says that the most interesting sector at present is the fabrication of application-specific integrated circuits in the countries of the former Comecon trade area.

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