HYDERABAD: International Finance Corporation (IFC), part of the World Bank, will provide financial aid to Aditya Birla Carbon's proposed $200 million carbon black manufacturing facility in China.
According to IFC, of the total project cost of $200 miliion, it will provide an equity investment of up to $10 million, a senior loan of up to $40 million from its own accounts, a syndicated loan of up to $35 million and potentially up to $30 million from IFC acting in its capacity as implementing entity for the Managed Co-Lending portfolio programme.
It will also mobilise financing from international banks and help expand the project company to expand its future access to the financial markets.
Birla Carbon is one of the largest manufacturers and suppliers of carbon black globally. It operates 17 manufacturing facilities and setups in 15 countries with a combined annual production capacity of over 2 million tonnes.
The proposed plant in China will be constructed in two phases — phase I with a capacity of 120,000 tonne per year expected to become operational by end of 2016, and phase II with an incremental capacity of 120,000 tonnes expected to come into operation 2-3 years after completion of phase I. The plant will adopt established technology from Columbian Chemicals (USA), a subsidiary of Birla Carbon and IFC's investment includes both debt and equity in Columbian Chemicals (Jining) for phase I.
Columbian Chemcials (Jining) will be built within an existing chemcial industrial park in Jining, adjacent to an existing plant of the Jining Carbon Group, which will supply most of the raw materials for Columbian Chemicals (Jining).
According to IFC, the preliminary engineering design for the project was completeand the engineering/procurement/construction (EPC) model will be adopted for the project.
The shortlisting of EPC contractors has been completed with the associated companies being major contractors in the chemical industry. The final EPC contractor will be selected shortly.