Announcement of World Bank Lends One Hundred Million Dollars for Development Finance Company in India on May 15, 1980

. . ' ' FOR IMMEDIATE RELEASE I •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 80/92 May 15, 1980 WORLD BANK LENDS $100 MILLION FOR DEVELOPMENT FINANCE COMPANY IN INDIA The World Bank today announced the approval of a loan of $100 mill ion to the Industrial Credit and Investment Corporation of India (ICICI) to help it meet the foreign exchange requirements for financing high-priority indus- trial projects during the two-year period commencing September 1980. The Bank has been closely associated with ICICI since its establishment in 1955. The long asoociation has resulted in substantial Bank resources being channelled through ICICI to high-priority industrial projects and investments in India. The new loan, the thirteenth in a series of Bank lending operations to ICICI, brings the total of Bank assistance to ICICI to $590 miliion, net of cancellations. A major study undertaken in 1979 jointly by the Bank and ICICI confirmed that ICICI 's impact on the industrial development had been substantial, particularly through helping to e~sure that scarce foreign resources were allocated to priority industries. • By the end of 1979, ICICI approved assistance totaling $1.5 bill ion for some 2,600 projects. ICICI gives emphasis to the technologically advanced industries, including mechanical and electric machinery and equipment manufacturing, as well as the chemical and petrochemical industries. The economic and employment impact of ICICl-assisted prqjects has been significant. In addition to its mainstream lending and investment operations, ICICI is undertaking a broad range of other developmental activities and services with a view to enhancing its overall impact on industrial development. These include undertaking industrial sector and pol icy studies; identification and promotion of new project ideas; backward area development programs; and training and advisory support for other domestic and foreign financial institutions. ICICI 's foreign currency resources have come mainly from the World Bank. Of the total foreign exchange resources rnised by ICICI the twelve earlier Bank loans accounted for 77%. Seventeen 1ines of credit from Kreditanstalt fur Wiederaufbau (KFW), totaling about $80 mill ion equivalent, accounted for 13% and eight credits from the U.K. accounted for 6%. The remining 4% was made up of one loan from the U.S. Agency for Inter- national Development and two commercial borrowings - one Swiss Franc bond issue and a Eurodollar syndicated loan. With the encouragement of the Bank, ICICI plans to progressively diversify its foreign exchange sources. The Bank loan to ICICI is guaranteed by the Government of India. The interest on thF loan will be 8.25% per annum. Amortization of the loan will conform subs•antially to the aggregate of the amortization applicable • to subloans, subject to a maximum of 15 years, --i,1ciuding three years• grace. NOTE: Money figures are expressed in U.S. dollar equivalents.