Announcement of Forty Million US Dollars Loan for Industry in India on June 3, 1970

.INTERNATIONAL BANK FOR F<ECC)NSTRUCTIOr~ /-\ND DEVELOPiYlENT 1818 H $TREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 70/34 Subject: $40 million loan for June 3, 1970 industry in India Continued expansion of India's manufacturing sector is the aim of a World Bank loan of $40 million to the Industrial Credit and Investment Corporation of India Limited (ICICI), a development finance company which provides medimn and long-term fina~ce for Indian industry. The loan will enable ICICI to meet most of its expected foreign exchange commitments over the next two years. The new loan, the eighth to be made by the Bank to ICICI, brings the Bank's net total lending to the Corporation to approximately $200 million. From its • founding in 1955 through the end of 1969, ICICI approved financial assistance totaling about $360 million equivalent to 794 projects sponsored by 536 client enterprises; more than 25 percent of these projects were sponsored by new enter- prises. At the end of 1969, the most important holdings in ICICI's portfolio were of companies in the following sectors: chemicals and chemical products, ferrous metal products, machinery manufacture, and electrical equipment. ICICI's opera- tions have been predominantly in the form of loans, but have also included equity imrestments and underwriting. Foreign currency lending constituted over half of the approximately $44 million equivalent committed by the Corporation to Indian industrial firms in 1969. ICICI's clients are making substantial contributions to the overall expansion of Indian manufacturing output., particularly in paper, steel tubes, and bearings • and cables. Of late, ICICI has contributed to the fin1.r.ncing of the expansion pro- grams of several Indian tire manufacturers~ large chemical enterprises, and Indian /more Bank P.R. No. 70/34 - India--Industry • - 2 - ocean shipping companies. Many of ICICI's client enterprises are earning foreign exchange by exporting industrial products and cont1dbuted about $260 million to India's income from exports in 1968. Among the larger exporters financed by ·ICICI are producers of cotton textiles, alumin\Dll, steel tubes, plastics, wire ropes and hand tools. ICICI's projections over the next five years show a steady)growth in its operations and a growing demand for its assistance, especially for foreign ex- change loans. ICICI has a considerable pipeline of projects under considera- tion for both foreign currency and rupee financing. Complementing current measures to increase its foreign exchange resources, ICICI is taking steps to replenish its rupee resources. The Bank loan to ICICI will bear interest of 7%, and will be guaranteed by the Government of India. Repayments to the Bank will conform approximately • to repayments received by ICICI on its sub-loans financed out of Bank funds, which will not extend for periods beyond 15 years. - 0 - •