WASHINGTON The International Finance Corp, the World Bank's private-sector lender, said on Wednesday it would invest 135 million euros in Volkswagen India's manufacturing plant in Pune to help create jobs locally.
IFC said the financing would consist of a 60 million euro loan from its own resources and an additional syndicated loan worth 75 million raised through commercial banks Socit Gnrale, Bank of Mitsubishi, DBS Bank, and Fortis Bank.
In addition, the European Investment Bank and German development bank KfW are considering further loans to meet the project's remaining financing needs, IFC said
Construction of the plant, which will have the capacity to produce 110,000 cars, started in 2007 and Volkswagen AG has invested about 245 million euros in the project.
"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," Tsitsiragos added.
Trending On Reuters
Companies are struggling to recover from years of exuberance, and say that Reserve Bank of India (RBI) Governor Raghuram Rajan's caution in cutting rates despite historically low inflation is making it harder for them to get back on track. Full Article