70mn euro financing for a diesel part plant
IFC, a member of the World Bank Group, is financing the construction of a new car parts factory in Thailand, which will produce environmentally friendly components and create jobs in the country's flood-affected automotive industry.
Continental Automotive Thailand Ltd’s new plant will rise in Ayutthaya province, where many factories closed last year at the height of Thailand’s worst floods in 50 years.
IFC mobilised 70 million euro in financing for the plant, equally contributed by its own account and Germany's KFW Ipex Bank.
The plant will produce high-precision common-rail injection components that increase fuel efficiency of diesel engines and cut carbon emission by more than 15 per cent compared with regional standards.
“This financing recognises our innovation and contribution to improving fuel efficiency in the automotive sector,” said Stefan Scholz, Group Treasurer of Continental AG, the parent company of Continental Automotive Thailand. “IFC has shown a strong commitment to support us and helped us diversify our funding sources, especially during these difficult market conditions," he said in a statement.
The financing package is part of IFC’s Thailand Flood Response Strategy to support the government’s efforts to help local businesses, especially small and medium enterprises, recover from the disaster. IFC is providing emergency liquidity to agricultural and manufacturing companies through Thai banks, as well as directly financing the rebuilding and upgrade of key industrial estates.
“IFC’s investment in Continental Automotive and support of the Thai auto industry’s recovery show our vital countercyclical role in the financial markets – providing financing when the private sector needs it the most,” said Simon Andrews, IFC Regional Manager for Thailand, Cambodia, Lao PDR, and Vietnam. “The new plant will help create hundreds of jobs in the local market and about a thousand more along the supply chain.”
