Beijing, October 12, 2005
—The International Finance Corporation, the private sector arm of the World Bank Group, has committed to lend RMB405.5 million to Guangzhou Development Industry (Holdings) Co., Ltd. to support the company’s on-going capital expenditure program. GDIH, which is currently a majority municipal-owned corporation, is listed on the Shanghai Stock Exchange and is a part of the pilot share reform process. IFC’s lending to the company supports its continued reform and encourages its efforts to improve environmental and social performance.
The project is the first Municipal Fund transaction in China. Through the IFC-World Bank Municipal Fund Department IFC is able to offer increased support to subnational enterprises, or those controlled by municipalities, states, and provinces, for activities operated on a commercial basis.
GDIH owns power generation assets in the Pearl River Delta area of Guangdong Province, China, with related investments in fuel logistics, gas distribution and a toll road. The IFC loan will be provided out of the proceeds of a renminbi-denominated bond that IFC launched on October 10, 2005. The IFC loan has a 10-year maturity, matched to IFC’s renminbi bond.
“IFC’s financing and technical assistance to GDIH will help the company substantially upgrade its environmental and social profile,” said IFC Director of Infrastructure Francisco Tourreilles “This investment is expected to have a positive demonstration effect on other Chinese companies in the energy sector in the Pearl River Delta region and beyond.”
GDIH Chairman Yang Dandi said: "We are very pleased to have this association with IFC and with the support that it is providing GDIH to continue improving our environmental and social practices. We look forward to developing a strong long-term relationship between GDIH and IFC."
The Pearl River Delta area, the primary location of GDIH’s operations, is one of the most industrialized regions in China with corresponding environmental challenges. To meet them, GDIH plans to retrofit existing coal-fired power plants with flue gas desulphurization technology, build a natural gas-fired combined cycle gas turbine power plant, and develop a natural gas distribution network in the Nansha area.
Since 1985, IFC has invested more than $2 billion in 100 private sector companies in China.
The International Finance Corporation, the private sector arm of the World Bank Group, promotes sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Its 178 member countries provide its share capital and collectively determine its policies.
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.
