Jakarta, June 30, 2004
—The International Finance Corporation, the private arm of the World Bank Group, has signed an agreement with P.T. South Pacific Viscose to provide a $9.5 million loan to finance a two-year capital investment plan. The company aims to achieve self-sufficiency in electricity, modernize its production facilities and refinance its medium-term debt. IFC is providing long-term financing to send a positive signal to foreign investors about prospects in companies that adopt good practices.
SPV is an internationally competitive producer of high quality viscose staple fiber, or VSF, with production equivalent to 7-8 percent of world consumption. IFC has worked with SPV since 1992, financing its two most recent expansions and leading its financial rescheduling in 2000. Following the rescheduling, SPV has achieved sound financial and operational performance.
“This project promotes the long-term sustainability of an environmentally and socially responsible industrial company in Indonesia,” said Javed Hamid, IFC director for East Asia and the Pacific. “It will encourage a reliable and inexpensive source of power for a company committed to high standards of financial and environmental performance.”
SPV operates one of the largest VSF plants in the world and is a major supplier to the domestic and regional textile sector. The project sponsor is Lenzing AG of Austria, SPV’s major shareholder, the world’s second largest VSF producer.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC’s committed portfolio at the end of FY03 was $16.8 billion.