WASHINGTON, D.C., Oct. 31 -- The International
Finance Corporation (IFC) today signed an agreement to provide up to US$20.6
million for an expansion project being undertaken by General Tyre and Rubber
Co. of Pakistan Limited, the country's premier automobile tire producer.
IFC's financing consists of a loan of US$14.7 million and an equity investment
of about US$2.9 million. In addition, IFC will provide a standby loan of
up to US$3 million. The US$41 million expansion program will make General
Tyre and Rubber Co. the first producer of steel-belted radial tires in
Pakistan, where demand for the product is growing. The company will increase
its car tire production capacity from 800,000 to 1,300,000 units annually,
and expand its production of passenger car, light truck, truck, tractor,
and bus tires. The project will be implemented with the support of Continental
AG of Germany and its affiliate, General Tire Inc. of the United States.
"IFC is pleased to be associated with this important value-added segment
Pakistan's automotive industry and we look forward to continue working
with business circles and the Government of Pakistan in developing the
potential of the automotive sector," said Mr. Jemal-ud-din Kassum,
IFC's Vice President, Operations, when he signed the agreement with Lt.
Gen. (Retd.) Habibullah Khan Khattak, Chairman of General Tyre and Rubber
Co. of Pakistan in Karachi. Mr. Kassum added: "The transfer of technology
and skills and access to research and development are key elements for
success and we are therefore very happy to have played a role in enhancing
the ties between the General Tyre and Rubber Co. of Pakistan and Continental
AG." General Tyre and Rubber Co. of Pakistan is largely owned by Pakistani
investors and is listed on the Karachi Stock Exchange. Continental AG has
10 percent shareholding in the company. IFC is a member of the World Bank
Group and is the largest multilateral source of equity and loan financing
for private sector projects in developing countries.