Washington, D.C., July 5, 2006
— The International Finance Corporation, the private sector arm of the World Bank Group, has agreed to provide a $19.4 million loan and $2 million in equity to Continental Carbon India Limited (CCIL), a key carbon black producer in the Indian state of Uttar Pradesh. IFC’s financing will enable CCIL to expand its power production capacity with a new 15 megawatt plant. The loan financing consists of a $7 million loan for IFC’s own account and a syndicated loan of up to $12.4 million.
Carbon black is a reinforcing agent used for rubber products, such as tires and hoses. Instead of flaring the waste gases from carbon black production, CCIL will use its new power generation plant to tap the energy locked in these gases. The company plans to sell the power to the local distribution company, thus increasing the local power supply. IFC’s financing will enable CCIL to enhance its production efficiency and output quality, and help the company restructure its balance sheet.
Rashad Kaldany, IFC’s Director of Oil, Gas, Mining, and Chemicals, commented, “Our role in mobilizing long-term funding to expand CCIL’s power production capacity is in line with IFC’s strategy of improving infrastructure through greater private participation. The financing will allow CCIL to become more energy efficient and help alleviate the power shortage in Uttar Pradesh through the sale of surplus power.”
Iyad Malas, IFC’s Director for South Asia, noted, “This transaction fits well with IFC’s strategy in India which aims to support companies willing to restructure and modernize their operations to become more competitive in the global market, while being environmentally friendly and socially responsible. We are pleased to work with companies like CCIL that share IFC’s vision of sustainability.”
“IFC has been involved with CCIL since 2001, when we acquired the carbon black business of Oriental Carbon and Chemical Limited, modernized and expanded it, and restructured its debts. We value our long-term partnership with IFC which has supported us through both good and bad times. Its continued support, through the new investment package, is helping us broaden our sources of capital and strengthen our power co-generation activities,” added Kim Pan, President of Continental Carbon Company and Board Chairman of CCIL.
The project sponsor is China Synthetic Rubber Corporation (CSRC), one of the world’s leading carbon black producers and technology providers. In the past ten years, IFC has worked successfully with CSRC in financing its carbon black projects in India and China.
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing and transition 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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications.
