IFC to invest $21.4 mln in Power Sector in UP
New Delhi, July 5: International Finance Corporation, the private sector arm of the World Bank, will provide 21.4 million dollar to Continental Carbon India (CCIL) of Uttar Pradesh to expand its power production capacity.
The money, of which 19.4 million dollar will be given as loan and 2 million dollar as equity, will enable CCIL with a new 15 megawatt plant. The loan consists of a 7 million dollar loan for IFC's own account and a syndicated loan of up to 12.4 million dollar.
''Our role in mobilising long-term funding to expand CCIL's power production capacity is in line with IFC's strategy of improving infrastructure through greater private participation,''said IFC's Director of Oil, Gas, Mining, and Chemicals Rashad Kaldany.
The financing will allow CCIL to become more energy efficient and help alleviate the power shortage in Uttar Pradesh through the sale of surplus power, Mr Kaldany added.
Carbon black is a reinforcing agent used for rubber products, such as tyres and hoses. Instead of flaring the waste gases from carbon black production, CCIL will use its new power generation plant to tap the energy locked in these gases. The company plans to sell the power to the local distribution company, thus increasing the local power supply.
IFC South Asia Director for South Asia Iyad Malas noted, ''This transaction fits well with IFC's strategy in India which aims to support companies willing to restructure and modernise their operations to become more competitive in the global market, while being environmentally friendly and socially responsible''.
''We value our long-term partnership with IFC which has supported us through both good and bad times. Its continued support, through the new investment package, is helping us broaden our sources of capital and strengthen our power co-generation activities,'' said Continental Carbon President Kim Pan.
The project sponsor is China Synthetic Rubber Corporation (CSRC), one of the world's leading carbon black producers and technology providers. IFC has worked with CSRC in financing its carbon black projects in India and China.