Washington D.C., August 5, 2009—
IFC, a member of the World Bank Group, has agreed to invest €135 million in Volkswagen India Private Ltd to help the company set up an integrated car manufacturing plant in Pune, India, that will help create jobs locally.
Construction of the plant started in 2007, and Volkswagen AG already has invested about €245 million in the project. IFC’s financing package consists of a €60 million for its own account and a syndicated loan of €75 million arranged with Société Générale, the Bank of Mitsubishi VUFJ Ltd Singapore, DBS Bank Ltd Singapore, and Fortis Bank SA/NV. In addition, the European Investment Bank and KfW, the German development bank, are considering investing to meet the project’s remaining financing needs.
The plant will have an initial capacity of 110,000 units a year, enhancing competitiveness of the growing Indian automotive sector through transfer of technology and know-how. Volkswagen India will target the local small- to compact-car segments, and will aim to create a cost-competitive base for large-scale market entry through a strong local supplier base.
“This investment demonstrates the important counter-cyclical role IFC plays in supporting a vital project with significant job-creating potential during challenging times,” said Dimitris Tsitsiragos, IFC Director for Global Manufacturing and Services. “The investment will also support the development of India’s car manufacturing sector and sends a strong signal to other investors in the country.”
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $15 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit