New Delhi, India, July 2, 2007 —
IFC, the private sector arm of the World Bank Group, will provide a long-term loan of $40 million to West Coast Paper Mills Limited, an integrated printing and writing paper manufacturer in India’s southwestern state of Karnataka. IFC’s support will help the company modernize and expand capacity. Part of the loan will fund the installation of a new chlorine-free fiber line to eliminate a major source of pollutants from pulping operations.
The key demand drivers for paper consumption in India are increases in GDP, literacy levels, corporate spending, and industrial activity. Per capita consumption is estimated at 7 kilograms per year—the lowest in the world and far below the global average of 56 kilograms. IFC’s loan, with a longer grace period and maturity than available elsewhere, will improve West Coast’s debt profile, aligning its debt service requirements with its ability to repay. This promises significant growth for the country’s paper industry.
S.K. Bangur, Chairman of West Coast Paper Mills, said, “The paper industry in India has been highly fragmented, with a capacity of 6.8 million tons per year distributed among over 500 players, most of whom are informal companies. Plans by several players to consolidate and expand are underway. With IFC’s support, we hope to improve the sector’s efficiency and enhance our competitiveness.”
Paolo M. Martelli, IFC Director for South Asia, said, “With this loan, IFC will help strengthen West Coast’s cost competitiveness, helping a key player in the paper industry achieve international standards in environmental and social performance. The project will also help increase the company’s capacity and enhance its productivity.”
Dimitris Tsitsiragos, IFC Director for General Manufacturing and Services, said, “IFC’s sectoral knowledge, global experience, and leadership in environmental and social standards are providing the company added value that goes well beyond the financing.”
K. L. Chandak, Executive Director of West Coast Paper Mills, added, “A partnership with IFC will also let us significantly upgrade the environmental performance of our operations in Dandeli, Karnataka.”
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products have committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business-enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
IFC in India
In India, IFC holds a portfolio of $1.3 billion (as of June 2006), its fourth-largest country portfolio. IFC’s cumulative commitment to Indian projects since 1956 amounts to $3.3 billion. IFC focuses on supporting private sector–led development through direct investment and advisory services that promote growth and competitiveness in India. During its 2006 fiscal year, IFC committed over $400 million in new investments in India.
Infrastructure is central to IFC's strategy in India. In recent years, IFC has supported manufacturing companies aspiring to global competitiveness. IFC also supports innovation in financial services, including expansion of consumer and housing finance for lower-income groups. IFC provides advisory services and equity financing to microfinance institutions that provide loans to farmers and small enterprises in rural areas. IFC helps companies overcome the limited availability of long-term financing by using its strong credit rating and financial structuring expertise to encourage domestic investors to buy longer-term commercial paper. IFC also focuses on the innovative application of technology by backing IT companies whose products offer potential for important contributions to economic development.