Washington, D.C., July 5, 2006—
The International Finance Corporation, the private sector arm of the World
Bank Group, has agreed to provide a $19.4 million loan and $2 million in
equity to Continental Carbon India Limited (CCIL), a key carbon black producer
in the Indian state of Uttar Pradesh. IFC’s financing will enable CCIL
to expand its power production capacity with a new 15 megawatt plant. The
loan financing consists of a $7 million loan for IFC’s own account and
a syndicated loan of up to $12.4 million.
Carbon black is a reinforcing agent used for rubber products, such as tires
and hoses. Instead of flaring the waste gases from carbon black production,
CCIL will use its new power generation plant to tap the energy locked in
these gases. The company plans to sell the power to the local distribution
company, thus increasing the local power supply. IFC’s financing will
enable CCIL to enhance its production efficiency and output quality, and
help the company restructure its balance sheet.
Rashad Kaldany, IFC’s Director of Oil, Gas, Mining, and Chemicals, commented,
“Our role in mobilizing long-term funding to expand CCIL’s power production
capacity is in line with IFC’s strategy of improving infrastructure through
greater private participation. The financing will allow CCIL to become
more energy efficient and help alleviate the power shortage in Uttar Pradesh
through the sale of surplus power.”
Iyad Malas, IFC’s Director for South Asia, noted, “This transaction fits
well with IFC’s strategy in India which aims to support companies willing
to restructure and modernize their operations to become more competitive
in the global market, while being environmentally friendly and socially
responsible. We are pleased to work with companies like CCIL that share
IFC’s vision of sustainability.”
“IFC has been involved with CCIL since 2001, when we acquired the carbon
black business of Oriental Carbon and Chemical Limited, modernized and
expanded it, and restructured its debts. We value our long-term partnership
with IFC which has supported us through both good and bad times. Its
continued support, through the new investment package, is helping us broaden
our sources of capital and strengthen our power co-generation activities,”
added Kim Pan, President of Continental Carbon Company and Board Chairman
of CCIL.
The project sponsor is China Synthetic Rubber Corporation (CSRC), one of
the world’s leading carbon black producers and technology providers. In
the past ten years, IFC has worked successfully with CSRC in financing
its carbon black projects in India and China.
The International Finance Corporation is the private sector arm of the
World Bank Group and is headquartered in Washington, D.C. IFC coordinates
its activities with the other institutions of the World Bank Group but
is legally and financially independent. Its 178 member countries
provide its share capital and collectively determine its policies.
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing and transition
countries, helping to reduce poverty and improve people’s lives. IFC finances
private sector investments in the developing world, mobilizes capital in
the international financial markets, helps clients improve social and environmental
sustainability, and provides technical assistance and advice to governments
and businesses. From its founding in 1956 through FY05, IFC has committed
more than $49 billion of its own funds and arranged $24 billion in syndications
for 3,319 companies in 140 developing countries. IFC’s worldwide committed
portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion
held for participants in loan syndications.