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Our Bureau

Ahmedabad, March 13 The International Finance Corporation (IFC), the private sector lending arm of the World Bank Group, has picked up 25 per cent equity in Gujarat-based Meghmani Finechem Ltd (MFL), a subsidiary of the Singapore-listed Meghmani Organics Ltd (MOL) as a strategic investor for its proposed environment-friendly chlor-alkali plant in the State.

Under the tie-up announced here on Thursday, IFC will invest up to Rs 46.1 crore in MFL, equal to 25 per cent equity of the project, and provide a long-term loan dollar-equivalent of up to Rs 80 crore for import of equipment for the Rs 554.2-crore plant to be set up at Dahej in Bharuch district in Gujarat. IFC will also help to strengthen the project’s technology and environment-friendly operating standards, involving energy-efficient membrane cell technology.

Mr Lance Crist, Senior Manager, IFC’s Oil, Gas and Chemicals Division, said on the occasion that IFC plans to invest $1 billion in India in diverse sectors that include health, education and rural finance.

“We are open to business in many sectors including oil and gas, chemicals, etc for energy and food security. In chemicals, we are looking at supporting companies with economies of scale.” Discussions are in progress with many companies, including Cairn in the petroleum sector, in Rajasthan. However, he did not elaborate further.

IFC is currently investing $14 billion in 70 countries globally. India, which is among top five of IFC’s investment places, accounts for half of the institution’s investment in China. Indian chemical business is likely to achieve the size of $60 billion by 2010, he said.

As regards its investment in MFL, IFC has gone beyond its normal investment norm of 20 per cent to close the financial gap, thus reflecting its confidence in the potential and viability of the project. IFC will have the right to subscribe to warrants of up to Rs 5 crore, Mr Jayantibhai Patel, Meghmani Group Chairman, said at a press conference after signing a share subscription and share-holding agreement with the IFC representative.

The commercial production of the first phase of MFL is targeted to commence by December 2008/January 2009. The second phase would comprise the production of derivative products with higher value-addition. First announced in October 2007, MFL is involved in the development of a large-scale caustic soda-chlorine complex that will produce caustic soda, chlorine and hydrogen gases in the first phase. The next phases will involve downstream/derivative projects based on caustic soda and chlorine. The MFL plant is being set up in a 161-acre area in a strategic location for chemicals and related industries as it is an approved SEZ for chemicals with a high concentration of chemicals companies.

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