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.”
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.
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.