IFC Investing €135 million in Volkswagen India to Support Local Job Market
In New Delhi:
Minakshi Seth
Phone: +91 11 4111 1058
E-mail: mseth@ifc.org
In London:
Carmen Powell
Phone: +44 207 286 5439
E-mail: cpowell@ifc.org
Washington D.C., August 5, 2009—IFC,
a member of the World Bank Group, has agreed to invest €135 million in
Volkswagen India Private Ltd to help the company set up an integrated car
manufacturing plant in Pune, India, that will help create jobs locally.
Construction of the plant started in
2007, and Volkswagen AG already has invested about €245 million in the
project. IFC’s financing package consists of a €60 million for its own
account and a syndicated loan of €75 million arranged with Société Générale,
the Bank of Mitsubishi VUFJ Ltd Singapore, DBS Bank Ltd Singapore, and
Fortis Bank SA/NV. In addition, the European Investment Bank and KfW, the
German development bank, are considering investing to meet the project’s
remaining financing needs.
The plant will have an initial capacity
of 110,000 units a year, enhancing competitiveness of the growing Indian
automotive sector through transfer of technology and know-how. Volkswagen
India will target the local small- to compact-car segments, and will aim
to create a cost-competitive base for large-scale market entry through
a strong local supplier base.
“This investment demonstrates the important
counter-cyclical role IFC plays in supporting a vital project with significant
job-creating potential during challenging times,” said Dimitris Tsitsiragos,
IFC Director for Global Manufacturing and Services. “The investment will
also support the development of India’s car manufacturing sector and sends
a strong signal to other investors in the country.”
About IFC
IFC, a member of the World Bank Group,
creates opportunity for people to escape poverty and improve their lives.
We foster sustainable economic growth in developing countries by supporting
private sector development, mobilizing private capital, and providing advisory
and risk mitigation services to businesses and governments. Our new investments
totaled $15 billion in fiscal 2009, helping channel capital into developing
countries during the financial crisis. For more information, visit www.ifc.org.
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