THE WORLD BANK GROUP ARCHIVES PUBLIC DISCLOSURE AUTHORIZED Folder Title: Banque Nationale de Developpement Economique Project [BNDE] (04) - Morocco - Loan 0660 - P005356 / Credit Immobilier et Hotelier Project (01) - Hotel Financing - Morocco - Loan 0704 - P005359 - Negotiations - Volume 1 Folder ID: 1697585 Project ID: P005356 Dates: 6/23/1962 - 12/15/1965 Fonds: Records of the Middle East and North Africa Regional Vice Presidency ISAD Reference Code: WB IBRD/IDA MNA Digitized: 11/29/2017 To cite materials from this archival folder, please follow the following format: [Descriptive name of item], [Folder Title], Folder ID [Folder ID], World Bank Group Archives, Washington, D.C., United States. The records in this folder were created or received by The World Bank in the course of its business. The records that were created by the staff of The World Bank are subject to the Bank’s copyright. Please refer to http://www.worldbank.org/terms-of-use-earchives for full copyright terms of use and disclaimers. THE WORLD BANK Washington, D.C. © International Bank for Reconstruction and Development / International Development Association or The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Mo1tocco - oan 6601704 MOR ( Negotiation~ ) I -- -=-,~ 11 1111 mm1 111 111111111 1111111 1111 11 1 111r1111 111 1887181 A11H-OIO Other#: 31 1701831 Banque Nationale de Developpement Economlque Project [BND!J (04) • Morocco. Loan 0660. P005356 I Credit lmmoblller et Hotelier Project (01) • Hottl ll'lnanclng. Morocco. - c:::, :z: >< c:::, l:ICI .. . - . .. .. . " . . . . . ' , -- - . . . . . . .. - " : .. . .. . .: . - . . . THIS FIIE IS CLOOED AS OF DECEMBER 196.5. FOR FURTHER CORRESPONDENCE SEE1 1966 - 1968. RECORDS MANAGEMENT SECTION February 1969 /f)Cf .3z.. ¢ ~ o-J°J.o ~<4. RABAT , LE 1 5 De c . 19 65 Monsieur W ill i am DI OND CAPITAL 30 MILLIONS DE DIRHAMS Directeur des Compagni e s BOITE POSTALE 407 - RABAT· TEL. 264 - 41 - 42 6< 43 ADRESSE TEL EG RAPHIOUE 9 A DEMARO C Fina nc i er es de Developpement 1818 H Stre et N•• DG/MF/ N° 207 WASHI NGTON 25 D. C. DIRECTION GENERALE .SPECJAL DELIYBIY I / Che r rrionsieur DIAI' OND , 3 \ f1~ ~ -/1-~- ~ ~~ su-'11:; - Faisant s ui t e a no s d i - f ere nt§ e n ~ au jet de notre i nt ervention pour le fina ncement des proje t s hot eli e rs , j' a i l ' h onne ur de vous t r ansmet tre ci- j oint l a let tre que j ' envo i e ce j our a M onsi eur EL EMARY a la- qu elle j ' y joins l es t a bleaux r ecapitulati fs des projets ' ./ !"/ de l'e spece . .\ J ' ai t enu , a va nt de r ep ondre a la l e ttre de Mo ,, . / EL EMARY, a c onnai tre le sentiment de not re Conseil qui s ' est t enu l e 22 Novem bre e t au cours duquel j ' a i exp os e l e s ~ r andes lignes des pr op osit ions de M. EL EMARY. No tre ~ ' Cons e il n ' a pas s oule v e d 'obj ect ion p our l ' a pplicat i on de s ua tre points ment ionnes par l a B. I . R. D. et m' a charge d e pou rsuivre l ' examen e t l a r ealisation de cette op eration afin d ' a ssure r a l a B. N. D. ~ . un volume d ' affa i res en a c- croi s sement p our l ' annee 1966 . J e vous ad re s se e a lement ci- joint, les proje t s susceptibles d ' un i nancement par la B. N. D•• pr epares par n os s oins sur la ba se des i ndi ca tions f ourni es par l a C. P . I . I1 . Vous en s ouha itant bonne r e ception, j e vous pri e de croi r e , Che r Mon s i eur DI fJ:OND , a l ' assurance de ma considerat i on . / Le Di r e ct eur Gen eral , M ~ ohamed B~NKI RA.NE H[C EIVEO li EN Efl,\ L FILES COMMU NIC ATIONS 965 DEC 20 lUi 9: 08 1 ·,- ~ RABAT, LE 15 Dec. 1965 c., . es-- i _ BANQUE INTERNATIONALE POUR LA RECONSTRUCTION ET LE CAPITAL 30 MILLIONS DE DIRHAMS 3 01TE POSTALE 407 - RABAT - TEL . 264 -41 - 42 DEVELOPPEMENT ~ 4 3 ADRESSE TELt G RAPHI O UE BADEMARO C. 1818 H. Street N. W. DG/RT. n° 205 WASHINGTON 25 D. C. A. G. El Emir a l'attention de M. EL EMARY. F=t-- DIRECTION GENERALE OBJ ET: Intervention de la B. N. D. E. dans le credit hotelier. - Messieurs, ~ ous avons bien re9u en son temps votre correspondance du 1 foct~bre qui a eu toute notre attention et vous en remercions vivement. Nous somrnes parfaitement d'accord avec vous sur les quatre points essentiels signales dans votre correspondance. Nous etudions actuellement, en liaison avec le Ministere des Finances et la C. P. I. M •• un mecanisme d'intervention de la B. N. D. E. dans ce secteur et ne manquerons pas de vous en expo- ser les grandes lignes des qu'il aura ete mis au point. ~ );.~ Comme vous l'avez demande lors de nos entretiens a
E a mmber ot hotel J)l'OjNt. to be tinaneecl joint-
]¥ with CPlM. We •ball revia thaa on a eue by' UN baaia an4
deeida 1n euh .... what.her tu projHt aho1lld be e11gible tor
t1.nanM under tha Benlc loan. In this eoDDNtion, I am attaoh1ng
a eow ot a letter whieh Mr. El...,. hu Nnt to BIDE Nttina
tort.h 'tlla aia ,rindplN *1eh w hope BNDE will follow in under-
tald.na nob joi:At projHt. wit.h CPlM.
Attuhllmit
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Meeting with the Moro,ecan. Delegation
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Maaan. JU Jaar;y, Willi•••, Ban.1-*, Boos and Cojot • t with ,.
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Mnan. Tabiri, Sl.aoui, Barpeh, Benkirane and Tui ot Merooco
on Sept.eeber 27, 1'6S. The natua of TU'ioua projNt.a or poa•
aibl• projeeti vu ~ . A ~ 11Nt1nc waa bel.4 OD
Onober 1 attend.ecl bJ '119 .... penou (--.,t Jlenn. W1l11n•, ~ ·-
Boos and Co jot) and Jlaalh"9. .Ali Ben,elloun (Dinetor General ot
OCP) and Mr. Ton Hottunn. , "" • . ' .;
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It vu agl"MCl that, pending the nllliaaJ.on ot a •te.Uecl projeet ,-
tor OCP•e iD'YNtaent prograa 1n tha Sidi Daoui area, ua D'C ld.aeion
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vould, on bebal.t of the Bank, aalc• a preUainu'J NY1n of OOP u ~
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Mr. Tahirt point.eel out that lut Jee in TolrJo the pl"inci.J)lA ·.
ot Bas f:1D&Jle1ng of '°'11'1111111,.d. been ueepted and \hat \he tour1ea • I
ohapt;m, of \he MeroMan nan . . ftr7 IIWlh 1n line wt.th that ot the ,: .•
IIVft7 111.-ion•e report. Mr. vn11- nplied that the )lri.Doiple \
bu been UNpted nt that. a pNjeot ~ t l y oonftnecl to touria .. ~
,rou1.d aout.1\ut. a MW t ~ te ti. Bink. To enable \be Bank to ... · -
N&Ch a poeitlon DD ~ I tounaa, u noh, in Moroeeo, it wo'Qld
be balp.tu1. to reo*1n a clofnment duffibiq ~1"0000'• procr- tor ·
••ther
touriat .tnelo)allllt., than Uaoua• 1.aolated Pf'0.1MW. ror the
t1ae be~1, •QM propue ooul.4 be ll&da bJ un1n:lng a t.ut oaee 1'h1oh
oould be IUbld.tted to ti. BaDk u a nb-irrojeet by BNDI. Mr. Tahiri
wined that while the Bade ooulll finanoe tov1.a through the BRDB,
ha nnt.l OPIM, 11hich vu ti. l'NOp.ise4 Korooean bCM\r tor tinano1q
tour:l.111, to be a~ to 111• ita aperi.eDoe 1n tld.a •tter, ~ have
aooue to lam flmde. It wu clNil"able to ha'Y• bol'Nllin depen4 only •
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QOD a ehgla ina\ituticm tor U"Nit tor touria, rat.be than on two. J
It ..,.. a1ao all,"Md that thl Bas "1.ght un,ne projeota to ftnanee
1ntnetneture {roa4e, pc,nr and ,rat.er eupp].y) eonnected vit.h the dne•
lopaent, ot a tourietic &NI&.
). ldueaUon aad A@1::!ultural CJNdit
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Projeota
Mr. lenjem illdi.oated that the tOl'IIID va• to ao to tbi BoaN DD
ootober 7. litgotiationa for the latter &ft ocapl.et,ed aD4 proyi4ecl
the taruli\iN &N properly ooapl.W with, ta projNt eould be
pnaentedlto tbl Boari about Jdd..Qetober.
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MP. Benjenk 1ndiea'414 that th1e 1netitution vaa na.t on our
projeot U..t end t.bat a Kiee1.on vu to go to Moroooo to appraiae 1te :
needa for oredit.
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A joint Bad&/IJ.O 111aaton ia \o exaw1ne th19 Pl"03Mt •"' tlllt -~--~.rio1v · J- ·i..
and of October. ~. Barga.ch indioated \ha\ bl ha4 ao laaowl.NP ~ _ _ ~ •....._
of the Nnd.ing of a UM8J' Miaion t,o lloroooo Sn OOIIIIMUm with •-
\hie project. Be S.U.W hia ..s.re \o coor4iute \bit etfona .,:_ · ·.'1 ·
of all ianitutiou ~ witb-Derro. ~- _.....
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halt of Oc~r to aP,lll"lliN BHDB•a 1..,,..,na Pl'OP'UI and need tor 1
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t\mda Vi.th a via¥ t.o the reaobiDg a dHi'16D on a aeooad Bak•• -i flfl"' I. ';
line or oNCl.it tor BIDI. ,~ · ,
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October 1.3, 1965
Jlfr • MohaMc.l Benld.raM
DirMtev 06n,ra1
BalM(u latioule pour le
Dmlopp_..t loonoJd.ttue
Botte Foatale 407
Rabat, Karoo.
BIDE'• letter ot Jw JO ukN u to N rut on oert.ain propoul.a
tor the f:l.1wud.111 of hotel projeota in aaaooi&tion with t.ba CaiaN du
Mta Iaobilien a Ma.roe (C PJX). A• 7ft kaow, the paval. ..-t.1on ot
hotel f:lvne1ng bu DND tia8118Nd with the Bau: and with D'C OD Nteral
oooaaiou in the put J'N.I' or aon. You will han a JINON of tboN
llltChaaa'e• aDd I ..itl nwpq add that the 1961a. Worli Bank loonmd.o Suney
Mi•d.en to Jlol'Ooeo ba• ,aid partinlar attention to hotel 4.nelo,-nt and
!'NC'IIIIBCI ita report to 79111' attention lfhen it beooa• an1labl.••
We beliffe that clneloJ1119Dt ot hotel• an4 tour.la 1• ot hip
~ priority ill t.- Mol'Oeean eooDOJ17, aDl that it ahcnalcl be aa illportant
field ot aoti'Yit7 tor BIDI. We lteJ.ien, tutbal'IIOre, that BliDI'• app:roaoh
to the fimoiltg •f hotels aboul.4 be hnda:alD~ the .... u ita &PJ)l'Oaoh
to indutrial pl'Ojeota.
It appeara altopt.bar natural that ill unat1111 th1a aeotor BHDE
ahould frequntq adert.ake the joint tiuMilla of projeeta with CPIM.
I a nre 70\l ean work out the 11Nhan1 oa ot tbia Nlatiouhip with CPIii to
the Rtiafaot1on ot both partiH. In uk1ng thue arranpMBta, n tNl
that there are tnr ••nntial point• to N aatiafied troa BIDE'• point ot
'Yi•s
Fint, BHDE ahould retain ita ~ t power to appl"Oft
or rejeot ita partioipation in Ul1' loan or ilrnataat.
Seoond, BIDE aholll.cl partioipate aot1...:l.7 in t.he .appniaal
~ the projeot, and ita enldnation ahoul.cl be d.ireoted
toward N'Nal1q the projeot'• MODald.o aD4 tinanoial
•l'ita, in the .... u:aner u in BIDE'• appraiaal• ot
indutrial projeota. We haft noted that CPDI'• appra1Nl.•
are oarried out bT, or under the aupem.aion ot, eacperta
from the Cridit Fonoier de Franoe, whoN partinlar -,erimoe
1a in the tiel.4 of real utate &Del aortaap tirwac1q. I
would th1nk that BHDE eould MJm a ft'J7 nbatantial oontribution
in add1:nc to tb8 work ot theN -,ertll it• oaprehenllin
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apprd.Nl. of the eoonoa:Lo ancl t1n1vial jut1.tioation ot the
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ot the Jllall&PlllaDt ent'iaapcl, and ao on.
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Third, BIDE ~ rata:1a fJ 11rta to ~ ta. tena ot
ita lolma. Tba JIIP03en &Jllll'ld.u1 all tba a.euatom vi th
CPIM w1 with ta app11eaat 1lll1 l'IIRlt ia a apeed
t1uncd111 p1.aa. bat ta lom baa tha we illnitat.iw
probabq aboRlA aot be on ta w .......... Blll>B alloll1d
eharp ita DOftlal rate ot 1Dte!Wt ad oapt t o ~ tM
duration of and ....ar1.ty tor it.a loam to ta.a ..... of tba
project. All - - it, 1ib1a 1lill ...it 1a 1 - fJIGll -
on t w -,w11ar to t.hoN ot ita low to ialutr:l.al projecta.
Fourth, vbataftl' eoatruwal anaeamta plWll Bllm'•
lendinc. t..a, allould be uan ia auh a - , u t,,o . . . . . .taq
proteO't BIDE'•~.
I hope th1a apl •1N ov poait.ion olearly mil prc,,ea wta1 tor BIIDI.
If the abotS Tllt.icmld ecmditiau U9 M.f1J]N1 the Bank 1a pnpt.Nd to
eamder hotel p,rojeeta tor 11.....,111 Gilt d ita loan to BIDE under the
.... proeecblre ancl aabj•t to ta .... Nldl.U.. appqilll to indutr:l.al
p:,ojeet.t. We look tonud. to l'MCnJIC lllloh pziojeeta.
With 1dm Nl&l'da,
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~ Record Removal Notice Arch iVes
0
& Records M.inagcmcnt
File Title Barcode No.
Banque Nationale de Developpement Economique Project [BNDE] (04) - Morocco - Loan 0660 - P005356 / Credit
Immobilier et Hotelier Project (01) - Hotel Financing - Morocco - Loan 0704 - P005359 - Negotiations - Volume 1
1697585
Document Date Document Type
28 September, 1965 lI Terms of Reference
Correspondents/ Participants
A : M. Abdel G. El Emary
B : Abderrahman Tazi
Subject/ Title
Financement d'un credit hotelier au Maroc
·---
Exception(s)
Additional Comments
The item(s) identified above has/have been removed in
accordance with The Wo rld Bonk Policy on Acces s to
Pending a decision on matters co ncern in g Board of Governors (BoG) records , the declassification and disclosure Information . This Poli cy ca n be found on th e World Bank
process set out in the World Bank's Policy on Access to Information cannot be applied to the non public records of the Access to Information website.
BoG. Please refer to Al Policy interpretation on the "Application of the Access to Inform ation Policy to the Records of -------------··----· ---·······---- __ . ___ · - - - · ________
the Board of Governors", dated February 27 , 2014 which is available on the World Bank Access to Information
website .
Irwithdrawn by _J Date
Chandra Kumar 24-M ar-l 5
·-------
Archives 1 (Augu , t 2014)
FORM NO, 59
( 2. 55)
CROSS REFERENCE SHEET
COMMUNICATION: Me,no
DATED: Sept. 28, 1965
TO: Files
FROM: Mr. Williams
F1LED UNDER: Morocco General Negs.
SUMMARY: Tourisr- a nd Bnde; consideration of CPI and also Bank Loan since
BNDE could not fina nce it;
FORM NO. 59
( 2. 55)
CROSS REFERENCE SHEET
COMMUNICATION: Memo
DATED: September 27, 1965
TO: File s
FROM: Mr. Skillings
FILED UNDER: Vorocco BNDE General
SUMMARY: Profitability; Adviser; A:111ount of Loan; Financing of Touris'!Tl .
MOROCCO -- FINANCING OF HOTEL INDUSTRY
1. The Government asked the Bank for a loan for CPIM, for the financing
of the hotel industry. CPIM, a subsidiary of the government-controlled Caisse
des Depo ts de Gestion, until recently functioned primarily as a real estate
mortgage-financing institution. Of late, its activities have been increasingly
directed towards financing hotels. The Bank told the Government that it would
not lend to CPil1 primarily because it was not a suitable institution but also
because the Bank felt ENDE was a proper instrument for financing the hotel
industry.
2. The Government then proposed that ENDE give a line of credit to CPIM,
but this has been discouraged both by the Bank and by ENDE itself, because
CPIM would thus be inserted as an unnecessary intermediary between BNDE and its
clients.
3. The Government's latest proposal has been for joint financing of in-
dividual hotel projects by both BNDE and CPIM: CPIM providing dirham financing
and BNDE providing foreign exchange from the World Bank line of credit.
(a) The exact mechanics of collaboration, as described in the
documents we have received, are a little unclear. However,
they imply that CPIM's Board (on which ENDE would be rep-
resented) would make loan decisions binding on ENDE as well.
(b) There appears to be a difference of opinion as to ~hether in
any particular joint financing there should be a single loan
contract (government's view) or two separate but related loan
contracts (BNDE's view, at least until the summer of 1965).
The Government's argument for a single contract is that CPIM
is an institution specialized in hotel financing and thus having
considerable expertise in the field. However, there is ambiguity
on the contract: one document states that the CPIM contract would
assure ENDE rights of end-use supervision; another does not
mention this point, but implies the opposite.
Our views have been asked on this proposal for joint financing.
4. Tourism merits high priority in Morocco's development plan; and BNDE
has already been informed that the Bank would have no objection to BNDE's
financing hotels or to the use of the Bank's line of credit for that purpose.
As for joint operations between CPIM and ENDE, both institutions could benefit
from such collaboration. CPIM would contribute domestic currency and special
privileges for its borrower as well as som e experience. BNDE has also developed
considerable expertise in the tourist field, perhaps more than CPIM itself,
which has only recently bggun to finance hotels, while ENDE has been involved
for several years in one or another aspect of tourist industry promotion.
Moreover, BNDE's ability to invest in e~uity will be important in financing
the hotel industry-i~ --unsatisfactory debt-e~uity ratios are common.
-2-
5. Accordingly, we would encourage joint financing by BNDE and
CPIM. However, BNDE 1 s responsibility to its shareholders and its position
as an independent decision-m aker require that, in joint financing as in
other cases:
(a) BNDE have an independent power of decision whether or not
to finance a particular project;
(b) its examination of that project be based on the project's
economic and financial merits and that it agree with CPIM
on a satisfactory financing pTam f or the project;
(c) its terms and conditions be "hard"; and
(d) contractual arrangements with the borrower adequately pro-
tect BNDE's interests
6. fhe question of whether to have separate contracts or a single
contract appears to us to be unimportant if the foregoing criteria are
strictly adhered to, and if BNDE's rights as an independent creditor
are adequately protected. The question is principally a matter of
convenience.
7. Rather than continue to discuss general principles, it would be
better to develop a concrete case, to proceed with it in accordance with
the criteria mentioned before and to draft contracts appropriate to the
case.
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r.. our - , to t.be w.ldll8 111.t'tf' of Sljttr A• , - tdl1 ,.....,. U. WGfld.ail
Jvta.r'• ~ Oil tht.a lattar pNp>Ml.
2. '1'hl w.ldll8 BlriF bae not dltJOUIINll tbt foll!IW propoal - cttNot .,..... to
-111.-
CF.Df.Batlb 1lbm Mr. Tald.r1 Ni . . 1\ with Mr. Sk1ll1. Sa lloncco 1D J\lm 1964, 1111111
- - Hr. Blupob rateed lt b11ra wltb thl Bttlt 1n Juli' 1'6S, U. 1,-.pclllN w
JT naaattw.
.3. '1'111 CPDC 1a a aabd4:l,tJ7 ot tm Od.- dlie D6p&ta • • Oert.1m aal t.am
~
Oo•••
It. bu flDrt.toDl4 • a r..:l-Ntate or mrt.1111 fl.,,,,,IW tn.tita-
ttan lnrl aaJ II 1cwW for -.J_ ~ ~ tc. law IINt lme.1111,
~s~~1::1n~l: t:9a~,~ ~f~-':'!:'~ ::=~·
tor~ h d = - . tor botela. 'ftd.11 lMt. actt..S.v ot b CPDI la aabt.i.t.lAld
U. __.. of 1lo & I • S• 19621 ca IIDft8III ..U.t, wld.ab eateNt.., ~
oansUtiiw tor 1oeDI to ..:a. ....,...,... t'l'GII mtboJ'Sald l a n i ~ . ..,._
b l 111, t.bla act.1.T.U" Z'ISIIU 1'84 ~ 2h% ot 1-- appao,114111 ~
4. CPJIC•a aper!- 111 bota1. loee Sa, ~ llaaft. 1111d bu not bean
a 1 ~ eat:1atactol'7', tt "'.,..,., .. tm ot • 1962 • • • Jll'Gftd
dUt!GuJ.t, to atlaty UDt.11 IIOdlfted MJE I lblt dlar.l.lll 1SJ63 m l ~ . We a- DD
........ t.hat, CPIM hu aaqaS.Nll tba ...,..S.0. ot tANl'.1.III that 1ll>B bu u a l'llllalt
of 1ta operat:l.ona 1n SCIWZT, SFDLlH,eto.
S. 1"9 Blmk S1ll'ftLY Nlaaia . . not Sip I IIM bT CPDI' a ft.t.lW t.o 8Rft,1.N bot.el.
p!'Ojeota - ~ -.-u hall tM "C..wt.t l'ad•n, cm 1lblll CP.DI Nl:l.a, law
_.. ...,..S.O. 1D Na1 eatate l:aeln1r1 SIi ....,.:1 (...iuau.cm ot OCIIUIVIIOtiaD 11114
11111d .,.i.) t.bla 1n botie1 buetmN. It bu NO . . . . . . . . . . of 1lbl Cndlt
JISteUw Sato m _, ___ 11111111d.tll 1W OIID eq,wt, etaft. Tbe 111.....-•e Rllport
daa dl8'1llpilb 1ibll eatAlblt.. 11,t; 11d tlDll.lld.Jw of hotA1 Oftdit U WIii r, "tO
at1al1ate Ja'J,'fate NOt.ar iauaf 111t.•
9T21pdop
6. Aa ildlMt.ed, tbe Wostd.111 Alrt,' teal8 tat BrlJE om 81111. ebaold 1ta4 to hot.el
pa'Ojeota iD umoiatiOD vlt.b ta. CPJII, 8UbJeat to Clll"tldD Jll'llldpJ•, ml W IIOa1d
.....t time aN Nte:Nl. ~ to . . ~ for Ban1c Jw dlNct to tbe
CPJIC, ~ 1
(1) 1\a ataadud of operat.1CD8 . . ..,. 111111&U~J
ts...,,.
(11) flm9 - . nc,t, . . . . t.o be 811' ~ . . . ..
11 IIIOli t'or ~ a ....S lalt.t.taatlCD
ill ltwoooo ill a ftflld ot aoti..S.t,7 w be11 •• ~ -
tor 111>!:.
001 MIU NeSk1ll1np, . . . . T.-., Rnl!r, B a t a d . 1 l a l d , ~ •
lWilal'toll1110.
~
Mr. N. H. Hanh Septeaber 20, 196S
R. B. J. licbarda
ll>IOCGD - BNDE1 Propoaala tor rinanci.D& ot Hotel•
In 70ur ..._andml dated September 17 to tbe Working Party
it 1a recorded that "D'C Legal Department has upreaaed a preference
tor al'Nngeaenta allowing BNDE to aign a separate contract w1 th
the client". Thia does not fully reflect our vine.
In the tirat place, I think that the question of form may
auk a question of aubatance. I haTe not e:xpnaaed arq Tina upon
the basic question ot who lenda to whom tor what. This is the
illlportant basic utter •
.A.a to the aeconda!7 .... u.
ot ton, it aeeu to • a matter
ot no i.llportance whether._. 18 a mltilateral loan agreeaent
between a DUllber ot lencillN ad a borrover, or aeparate &gl'Nll8llte
between aneral lendera _. a borrower. Thia ia a utter ot con-
venience onl.7.
J'requentl.7 it ia .... NlmlDient to haw Hparate contracts
between each lender and tM NnOlfwr beoaun, 1n thia wq, each
lender oan baTe the tol"Dl Ula\ he vante, ratber than negotiate on
the matter. In an:r eTent, it, will be nece88&17 to coordinate
coT9ll&llte and events ot dllfa11lt.
I I
~
RBJR/jgb
-
I ff A •.
•• . . ' . l t\llW '
•
HEADQUARTERS '.
WASHINGTON 25 . D. C.
INTERNATIONAL FINANCE CORPORATION
TELEPHONE WHITEHALL 3886/ 3887 c .. eLE AoORESS : CORINTFIN LONDON SWI
LONDON OF"F"ICE:
NEW ZEALAND HOUSE
HAYMARKET · LONDON. S.W. I
7th September , 19650
Mr . William Diamond.
irector ,
Development Finance Companies
Department ,
International Finance Corporation,
1818 H Street, N. W.,
Washington. DoC. 204330
U. S . A.
Dear Bill,
B DE - Tourism 'aJld Hotels
~ Thanks f or your letter of Augu~Oth, anc] the memo of A ugust
23rd prepared for the W orking Party o This i s interestin and it is useful
to me to be brought up to date on I BRD/IFC contacts with BNDE and the
Moroccan Government on the subject of finance for hotel s .
I have two observations to make , on paragraph 14 of the memo-
randum. Paragraph 14 recommends rejection of the Finance M inistry's re-
quest that t here should be one combined loan contract, covering both the
C. P.I.M. loan and the BNDE l oan (which in the opinion of the Survey Mission,
see paragraph 9 , may often be acccmpanied by a BNDE equity investment )o
First : on the purely formal and procedural question whether there
should be one or two loan contracts, our own IFC experience in our early
years led us to t he firm conviction that one canbined loan contract was un-
questionably the best met hod, when t wo or mor e investment institutions were
making more or less simultaneous investment cornmitmentso Ask Dick
Richards about the troubles and waste of time involved in the several loan
contracts in Mantos Blancos!
Second: m uch more is involved here t han legal formalities or
investment procedureso You will recall (from my recent conf i dential letter
on the Bengelloun drama ) that Bengelloun himsel f believed that his refusal
of the Finance M inist er 's request for B N DE t o channel I B RD funds through
the CPIM was the event which triggered the G overnment ' s decision to get rid
of himo Now you are proJ:los'na (or: at l east •the memo of A ugust 23rd proposes )
t o continue to refuse tha ipequ st to channe l funds in t hat wayo I entirel y
agree with you , but if you refuse the request t o charmel, I think you would
further inflame our rel ations w ith thel
_I
Finance
J
Minister, if you a l so refuse
/ continued ••• o•• oo.. o
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