Announcement of Financing for Indian Cement and Engineering Projects July 19, 1985

i ation-al Finance Corporalion FOR RELEASE Monday, July 29, 1985 Don Roessner Press Release No. 86/5 (202) 676-0394 IFC TO HELP FINANCE INDIAN CEMENT AND ENGINEERING PROJECTS The International Finance Corporation (IFC) is lending $13.45 million to Larsen and Toubro Limited (L&T), a leading Indian engineering and industrial organization, for two projects -- a S98.5 million doubling of the company's cement capacity and a 823.5 million new heavy engineering facility able to produce 10,000 metric tons a year of heavy plant and equipment. IFC is the affiliate of the World Bank that provides financial assistance in the form of loans and equity to the private sector in developing countries. Half of the Corporation's loan to L&T is for its own account and is denominated in Swiss francs while the other half is for the account of Chase Manhattan Bank and is denominated in Deutsche mark. The cement project will increase L&T's capacity from 1.1 million tons a year to 2.2 million tons and consists of the installation of a 3,200 tons-a-day kiln using the latest dry process technology and designed by F.L. Smidth of Denmark. The new facility will be located at the company's cement plant south of Nagpur in the State of Maharashtra where there is an abundant supply of raw materials. The expansion will help alleviate a cement shortfall in the region. The heavy engineering project will establish a new facility, close to Surat in the State of Gujarat, capable of fabricating heavy plant and equipment for power generation and associated modules. The L&T engineering facility is expected to create more than 1,500 jobs. It will also significantly increase India's capacity to produce sophisticated, heavy and oversized equipment and reduce the need for imports. In addition to IFC's loan, the Industrial Development Bank of India and participating institutions will lend approximately $31.35 million equivalent to L&T. A rights issue to shareholders will provide approximately $10.2 million equivalent and a debenture issue will provide $41.7 million equivalent. Cash generation of $25.3 million equivalent completes the financial plan.