WASHINGTON, D.C., December 1, 1999
—The International Finance Corporation will invest US$14 million to finance the construction and operation of a new container and general cargo terminal at Zhapu Port in Zhejiang Province of China to serve the freight traffic in the Yangtze River Delta region, one of China's fastest growing regions.
IFC has signed an agreement for a $3 million equity investment in China Infrastructure Group Holdings PLC (CIGPLC) and approved loans totaling $11 million to CIG Zhapu International Terminal Two Company Limited. The new port will be built adjacent to an existing petrochemical and general cargo terminal on the northern half of Hangzhou Bay.
The project will mitigate congestion in many of the ports in this region caused by the rapid growth of containerization. When the project is complete, by December 2001, annual design capacity will be 225,000 twenty-foot equivalent units of containers and 600,000 tons of general cargo.
The project supports the government's efforts to improve the efficiency of port operations in China through increased private sector participation, said Mr. Declan Duff, Director of IFC's Telecommunications, Transportation, and Utilities Department. He added that a competitively-located private sector port terminal would encourage intra-port competition in the region, reduce overall transportation costs for exporters and importers, and in turn enhance their international competitiveness.
CIGPLC is the flagship company of the China Infrastructure Group (the Group) and is planning to list its shares on the Growth Enterprise Market of the Hong Kong Stock Exchange. The Group is principally engaged in the development, operation, and management of infrastructure projects in China, particularly transportation and logistics.
IFC's investment will be its second port project with the Group. IFC earlier made an equity investment of $1.5 million in CIGPLC and signed a loan agreement to provide $10 million to the Wuhan International Container Transshipment Company Limited (WITCL), which is a subsidiary of CIGPLC. WITCL, located on the Yangtze River, will be the first container port and transshipment facility in Wuhan, the capital city of Hubei Province in central China.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. It fosters economic growth by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.
