Ahmedabad, India, May 17, 2007—
IFC, the private sector arm of the World Bank Group, will invest up to $25 million in Electrotherm India Limited, helping the company expand the production of environment-friendly vehicles and enhance its competitiveness. The project is expected to have a strong impact in the Kutch region, one of the most underdeveloped districts in Gujarat, India.
The company will use the funds to expand its electric vehicles business, upgrade its induction furnace business, introduce value-added iron and steel products in addition to its existing product line, and increase its competitiveness and energy efficiency by building a 30 megawatt captive power plant.
Electric motorcycles are a novelty in India, with annual sales of around 50,000 vehicles currently (compared to China’s market of around 10 million per annum). The growth of the electric vehicles market will help reduce pollution in urban areas.
“Partnering with IFC will allow us to leverage its global expertise to increase our range of products, improve our competitiveness, and help us improve our social and environmental practices,” said Shailesh Bhandari, Managing Director of Electrotherm. “It is commendable to see the speed and efficiency with which IFC executed this transaction,” he said, adding that he looked forward to a long term partnership with IFC.
Dimitris Tsitsiragos, IFC Director for Global Manufacturing and Services, said, “Our investment will provide long-term funding to Electrotherm to help it develop new products and export its engineering skills in induction furnace technologies.
Sujoy Bose, IFC Senior Manager for South Asia, said, “Working with medium-sized Indian companies to help them improve their competitiveness and expand their product range is a key component of IFC’s strategy in India. Our investment will help expand the supply of structural steel components, a critical input for infrastructure, and support the nascent electric vehicles market providing affordable transportation to low- and middle-income households.”
About IFC
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
www.ifc.org
.
IFC in India
IFC’s $1.3 billion portfolio in India (as of June 2006) makes it the fourth-largest country exposure. In FY06, we committed over $400 million in new investments in the country. Our cumulative commitment to projects in the country since 1956 totals $3.3 billion. We support private sector–led development through direct investment and advisory services that promote growth and competitiveness.
About Electrotherm
Electrotherm is an engineering company based in Gujarat, active in three distinct business sectors, namely induction furnaces, electric motorcycles, and iron and steel products. It has a 50 percent market share in the induction furnace business in India and is beginning to export its engineering skills by executing turnkey projects in overseas markets. In the electric vehicles segment, the company has established itself as the leader in India by selling 30,000 electric motorcycles within the first nine months of its operations.
