WASHINGTON, D.C., Aug. 1 -- The International Finance Corporation (IFC) is to invest about US$8 million (Ind. Rs. 250 million) in the South Asian Regional Apex (SARA) Fund in India to increase the availability of venture capital to small and medium-sized companies at the state level. The SARA Fund will provide the initial capital to start venture capital funds in about ten states in India. Among the states that have been preliminarily identified are Karnataka, Kerala, Orissa, Rajasthan, Tamil Nadu and Uttar Pradesh. Each state venture fund is expected to invest in the equity capital of about fifteen to twenty companies with investments ranging from $50,000 to $600,000. Between 150 and 200 ventures are likely to benefit from the funds, with total investments exceeding US$1 billion. "This is a way to mobilize and channel domestic and foreign resources to small and medium-sized ventures at the state level that are often overlooked by national-level venture funds," said Varel Freeman, Director of IFC's Asia Depar
tment. Creditcapital Venture Fund (India) Limited (CVF), a leading venture capital company in India, will act as manager of the SARA Fund as well as the state funds. CVF was set up by Creditcapital Finance Corporation, a leading private sector merchant bank promoted by Mr. Udayan Bose and Lazard Brothers. The size of the SARA Fund is likely to be US$32 million. IFC's equity participation is 25 percent. Other international financial institutions and the private sector are also expected to participate. The SARA Fund will provide about 50 percent of the capital of each state venture fund and mobilize 40 percent from the private sector. The State Industrial Development Corporations or State Financial Corporations in each state will invest 10 percent and help to identify investment opportunities. IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.