WASHINGTON, D.C., Oct. 31 -- The International Finance Corporation (IFC) today signed an agreement to invest US$8 million in the India Oil and Gas Finance Facility, which will provide equity, quasi-equity, and loan financing for small and medium-sized projects in the country's oil and gas sector. Creditcapital Venture Fund (India) Ltd. (CVF), a leading Indian venture capital company, will provide up to US$2 million for the Facility. With average costs of US$1 million to US$4 million for these projects, the Facility will be an effective way of channelling funds to viable projects that are too small for IFC to finance directly. CVF will identify, appraise, and supervise the investments, while IFC will also help develop sector-specific expertise and capabilities. IFC's investment will support the Indian Government's efforts to privatize and develop what is considered a priority sector in India. In an effort to boost production and attract foreign capital, the Government has over the last few years been offering
oil and gas fields for development to the private sector. "This new investment approach for financing small oil and gas projects could pave the way for a larger oil and gas fund," said Mr. Azam Alizai, Director of IFC's Oil, Gas and Mining Department. "The projects will help meet India's growing energy needs. By supporting new companies, the Facility will also encourage the development of a more competitive oil and gas industry." CVF was established in 1989 by Creditcapital Finance Corporation Ltd. (now Lazard Creditcapital Ltd.). IFC owns 10 percent of CVF and is represented on its Board. IFC has invested in various other CVF-managed funds, including the Information Technology Fund and the South Asian Regional Apex Fund. 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.
