Jakarta, June 30, 2004—The International
Finance Corporation, the private arm of the World Bank Group, has signed
an agreement with P.T. South Pacific Viscose to provide a $9.5 million
loan to finance a two-year capital investment plan. The company aims
to achieve self-sufficiency in electricity, modernize its production facilities
and refinance its medium-term debt. IFC is providing long-term financing
to send a positive signal to foreign investors about prospects in companies
that adopt good practices.
SPV is an internationally competitive producer of high quality viscose
staple fiber, or VSF, with production equivalent to 7-8 percent of world
consumption. IFC has worked with SPV since 1992, financing its two
most recent expansions and leading its financial rescheduling in 2000.
Following the rescheduling, SPV has achieved sound financial and
“This project promotes the long-term sustainability of an environmentally
and socially responsible industrial company in Indonesia,” said Javed
Hamid, IFC director for East Asia and the Pacific. “It will encourage
a reliable and inexpensive source of power for a company committed to high
standards of financial and environmental performance.”
SPV operates one of the largest VSF plants in the world and is a major
supplier to the domestic and regional textile sector. The project
sponsor is Lenzing AG of Austria, SPV’s major shareholder, the world’s
second largest VSF producer.
IFC’s mission is to promote sustainable private sector investment in developing
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, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956, IFC has committed more than $37 billion of its own funds and arranged
$22 billion in syndications for 2,990 companies in 140 developing countries.
IFC’s committed portfolio at the end of FY03 was $16.8 billion.