SREI II International Finance Limited

completed

Summary Of Project Information (SPI)Project NameIndia – SREI IIRegionAsia and the PacificSectorFinancial ServicesProject No009950Projected Board DateMarch 31 2000Company NameSREI International FinanceTechnical Partner and/or Major ShareholdersThe Kanoria family, a joint business family from Calcutta, controls 50.6% of SREI International Finance, with rest of the ownership allocated among: IFC (9.1%), DEG (the German government’s development agency)(3.5%), FMO (the Dutch government’s development agency)(6.1%), domestic financial institutions and banks (14.3%), and non-resident Indians and the general public (16.4%). SREI International Finance is a publicly traded company in India.The Kanoria family has been operating SREI since its inception in 1989 and has demonstrated a strong track record in efficiently managing the operations of the company.Project Cost Including proposed IFC investment     IFC Loan: US$10 million; IFC equity: US$5 million.Location of project and Description of site SREI International Finance is headquartered Calcutta and has several offices throughout the country.Description of Company and Purpose of ProjectSREI''s primary area of business has been financing (under lease and hire/purchase arrangements) heavy construction equipment to infrastructure related projects. In addition, a small portion of SREI''s business is in small and medium scale infrastructure project financing and this segment is expected to represent a larger share of the company''s future business volume. The project consists of making available a credit facility of US$10 million and an investment of up to US$ 5 million in subordinated bonds (with warrants) issued by SREI. The purpose of the funding is to allow SREI to further expand its small and medium scale infrastructure finance activities in the power, transportation and port sectors. The need to develop India’s infrastructure sector, to underpin the ongoing economic liberalization efforts as well as to ensure sustained economic growth and export expansion, is today widely recognized. The demand for infrastructure investment is expected to grow substantially as the process of industrial modernization accelerates and urbanization continues. A major constraint on private infrastructure investment, however, has been the lack of necessary market mechanisms to provide funds in terms of maturity, structure, and volume required. This is true not only of the larger infrastructure projects, but also small to medium sized projects, which are wholly dependent on local financial institutions for financing, particularly for debt financing. SREI is one of the few private financial institutions in India that have been engaged in financing assets in the infrastructure sector.      Environmental Category and Issues      This is a category FI type 2 project according to IFC’s environmental review procedure. SREI has committed to continuing to operate their environmental management system that will ensure that investments are consistent with applicable host country environmental laws and regulations as well as applicable World Bank Group environmental, health and safety guidelines and policies; confirming that appropriate individuals who will have responsibility for environment; attending IFC’s environmental management workshops; submitting an environmental management plan; ensuring that category A projects are cleared by IFC’s Environment Division; and submitting an annual environmental performance report      Date SPI sent to Infoshop February 25, 2000For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 974-4384