Announcement of IFC Investment in Modernization of Indian Motor Industry May 18, 1987

Monday, May 18, 1987 Bruce McWilliams Press Release No. 87/61 (202) 676-1950 IFC TO INVEST IN MODERNIZATION OF INDIAN MOTOR INDUSTRY The International Finance Corporation (IFC) will invest US$36 million in the modernization of Hindustan Motors Limited in India, it was announced. The modernization involves setting up two new projects. One project will involve the production of up to 15,000 modern, fuel-efficient power trains per year for Hindustan's passenger car line. This plant is located near Indore, Madhya Pradesh. The second project concerns the production of up to 15,000 heavy commercial vehicles per year and will be located near Vadodara, Gujarat. The projects will go ahead simultaneously and are expected to be completed in 1991. The technical collaborator in both cases is Isuzu Motors of Japan. Total cost of the projects is estimated to be US$275 million. IFC's foreign exchange-related loan comprises US$15 million, DM14 million, SwF1l.2 million and 1.1 billion Yen. The remainder of the financing involves US$34 million equivalent foreign currency loans from Indian financial institutions, Rupee term loans from Indian financial institutions, debentures in local currency equivalent to US$117.8 million and internal cash generation. This is the seventh investment made in the Indian transport sector by the International Finance Corporation, an affiliate of the World Bank and the leading private sector agency providing equity financing and long-term loans without government guarantees to private enterprises in developing countries. - END -