Announcement of India to Establish Petrochemical Complex in Maharashtra State on March 21, 1985

FOR IMMEDIATE RELEASE INTERNATIONAL MONETARY FUND JOINT LIBRARY World Bank NfAIN 2 coNSTUCTION AND DE2043 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. WASHI T D.C, 20431 BANK NEWS RELEASE NO. 85/38 Contact: P.B. Sison March 21, 1985 (202) 477-3573 INDIA TO ESTABLISH PETROCHEMICAL COMPLEX IN MAHARASHTRA STATE India expects to double its production of petrochemicals and to expand its plastics processing industry with the help of a World Bank loan of $300 million. The loan will help finance the construction of a petrochemical complex in the Raigarh District of Maharashtra State, some 120 kilometers south of Bombay. The plant will help further the government's policy to develop the country's petrochemical industry and to make it competitive internationally. It will be the first such plant in India to use natural gas as a raw material. The complex will include process plants for the production of ethylene and polymers. A power generating plant and facilities for supplying 15 million gallons of water daily to the complex will be set up. And transport facilities are being built or improved. These include roads, bridges, a rail line linking the project site with Bombay, and a deep water jetty. The project is expected to create some 60,000 new jobs and to save over $230 million in foreign exchange annually. The project is expected to be completed by late 1989 and to cost a total of $1.8 billon. Additional financing will come from the Government of India, Indian Petrochemicals Corporaton, Ltd. (IPCL), the executing agency for the project, cofinanciers, and internal cash generation from the project. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 9.29 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances. NOTE: Money figures are expressed in U.S. dollar equivalents.