Document of

The World Bank

FOR OFFaCIAL USE ONLY

Rep)Ot No. P-5260-IN

MEMORANDUM AND RECOMMENDATION

OF THE

PRESIDENT OF TPE

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED LOAN

TO

INDIA

IN AN AMOUNT EQUIVALENT TO US$300 MILLION

FOR A

CEMENT INDUSTRY RESTRUCTURING PROJECT

APRIL 18, 1990

This docuent has a resticted distribtion and may be used by recipint ondy tn the perfonace ofthdir offkcl dutes. Its contents may not othrwis be disclosed without Word Bank authorization.

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CURRENCY EQUIVALEN

Currency unit - Indian rupee (Rs)Rs 1 - 0.059Rs 17 - $ 1.00

FZff6 YZlAS

Government of India - April I-March 31IDBI - April 1-March 31

ICICI - April 1-March 31

WEIGHTS AND NEASURES

Metric System

ABBRVIAIONS ADAM=ACO

DANIDA - Danish International Development AgencyDCCI - Development Commission for Cement IndustryDFI - Development finance institutionEU * Environmental Impact AssessmentCOx - Government of IndiaICICI - Industrial Credit and Investment Corporation of India-DBI - Industrial Development Bank of IndiaRTC - Regional trainlng center

FOR OFFICIAL USE ONLY

INDA

C%HENT INDUSTY RESTRUCTURING PROJECT

Loan and Probest Summar

Borrer: India, acting by its President

Beneficiaries: Industrial Development Bank of India (IDBI); the IndustrialCredit and Investment Corporation of India Limited (ICICI)and Office of Development Commissioner for Cement Industry(DCCI).

Loan Amount: $300 million equivalent.

Torms: Twenty years, including five years of grace, at the Bank'sstandard variable interest rate.

RelendlMn Terms: Urt A: GOI would relend $298 million equivalent of theproceeds of the Bank loan to IDBI and ICICI in equal propor-tions in rupees at a rate of 12 percent p.a., repayable over20 years including 5 years of grace, for on-lending to sub-borrowers at the development finance institutions' (DFI)term lending rate, currently 14 percent p.a. The Governmentwill bear the foreign exchange and interest risks.

Part-B: GOI would provide $1.6 million equivalent of theBank loan as budgetary allocations through DCCI to financepart of the Human Resource Development component.

Part C: GOI would provide $400,000 equivalent of the Bankloan as budgetary allocations to DCCI to finance part of theTechnical Assistance component.

Pinancing Plan: xLlliJn S

3ank 300.0DANIDA 5.8Industry 253.5Other 176.9

Total 736.2

Economic Rateof Return: Minimum 12 percent for subprojects financed by the DPIs.

Staff AppraisalReort: Report No. 8422-IN

This document has a restricted distribution and may be used by recipients only in the performanceof their offlcial duties. Its contents may not otherwise be disclosed without World Bank authorization.

MEMORANDUM AND RECOMMENDATION OF THE PRESIDENTOF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOANTO INDIA

FOR A CEMENT INDUSTRY RESTRUCTURING PROJECT

1. I submit the following memorandum and recommendation on a proposed loanto India for the equivalent of $300 million to help finance a cement industryrestructuring project. The loan would be repaid over 20 years, including5 years of grace, at the standard variable interest rate. Co-financing of$5.8 million equivalent is expected in the form of a grant from the DanishInternational Development Agency (DANIDA).

2. Backstround. The policy reform for the cement sector in the 1980scomprised phased decontrol of cement pricing and distribution and relaxationof industrial regulatory controls. This deregulation has led to impressivegrowth and substantial modernization of the cement industry. Production grewfrom 18 million tons in 1980 to about 43 million tons in 1988. Cement supply,which was in severe shortage only ten years ago, has now caught up with demandand created a competitive cement market. India now produces cement at a costbelow the landed import price and has begun limited exports to neighboringcountries. Per capita consumption of cement in India ia about 47 kg, very lowin comparison with other developing countries of similar income. As the majorcement-consuming sectors (irrigation, power and housing) continue to expand,there is an excellent opportunity to develop a modern and efficient cementindustry in India.

3. In March 1989, the Government removed completely the price anddistribution controls on cement, thereby eliminating all subsidies to thecement users in the public sector and all cross-subsidies relating to freightequalization and differences in levy quotas among cement manufacturers. Thesust.inability of liberalization and further improvement of economicefficiency in this sector will depend on the industry's ability to adjust,through industrial restructuring, to the new and mo:e competitive environment.Restructuring during the coming years will focus on three key elements:(a) regional production canacity redistribution. Present cement production isconcentrated in the southern and western regions of India. This concentrationwas caused by uneven distribution of limestone deposits and industrialinfrastructure, but the imbalance has been exacerbated by the freight-equalization scheme, which fixed a common price for cement throughout Indiairrespective of actual transport cost. Following the elimination of thefreight-equalization system, sharp regional price differentials developedbetween the cement-deficit northeast regions and cement-surplus southwestregions. There is need for additional cement capacity in northern and easternregions which include some of the poorest areas of the country; (b) moderni-zation and restructuring of existing cement companies. The need formodernization comes from strong competitive pressure and the Government'scommitment to enforcing pollution-control standards. Major modernizationschemes would also involve corporate restructuring programs, includingrationalization and training of the work force and elimination of inefficientoperations; and (c) introduction of bulk cement transRort systems andestablishing manpower training systems that are responsive to the substantialmodernization and expansion taking place in the industry.

4. Rationale for Bank Involvement. The Bank began to work in the Indiancement sector in 1980 with a subsector study, India--Cement Subsector Report,

- 2 -

No. 3141-IN. This atudy contributed to the policy debate that led to thepartial decontrol of the cement industry in February 1982. To support thephased implementation of the elimination of the cement pricing anddistribution control, the Bank has provided loans for the Cement IndustryProject (Lns. 2660/2661-IN) of $200 million, which became effective onNovember 10, 1986. The loans are 80% committed and are expected to be fullycommitted by the time the proposed project would become effective in September1990.

5. Suosector restructuring strategy is at a formative stage, and the Bankis in a position to provide substantive assistance, based on experience inother countries, in the industrial restructuring of wet-process plants and themini-cement sector, industrial training and bulk cement transport. Inaddition, support for the cement industry is consistent with the Bank'slending strategy for the industrial sector. This strategy focuses on policyreform and lowering costs of basic inputs in the economy. The success ofcement industry restructuring would encourage reform in other industries. Asdiscussed in detail in the Staff Appraisal Report, lessons from the firstproject have been incorporated into the design of the proposed project. Banklending through subsector projects to the DFIs constitutes a small share ofthe total resources available to them, and the relending rate for the Bankfunds is consistent with the overall DFI interest rates. The risk of causingan allocative distortion through subsector lending is small and is more thanbalanced by the catalytic role of the Bank in helping improve the efficiencyof specific subsectors through restructuring projects and other measurescontained in these subsector operations.

6. Project Ob1ectives. The proposed project would support the government'spolicy decision of complete elimination of cement price and distributioncontrols and would assist the industry in adjusting to an increasinglycoia,)etitive environment. The proposed project is expected to enhance theindustry's economic efficiency and pave the way for sustained growth to meetincreasing demand in the 1990s.

7. Project Description. Part A of the proposed loan would help finance,through a line of credit to IDBI and ICICI, part of the following twocomponents: (a) an Industry Modernization and Restructuring component whichwould finance (i) capacity expansion in the cement-deficit regions to reduceregional demand/supply imbalances and to reduce excessive transport of cement,and (ii) modernization and restructuring projects in existing cement companiesthroughout India to reduce energy consumption, enhance operational efficiencyand improve environmental protection standards; (b) a Pilot Bulk Cement Trans-gort component which would help establish a pilot bulk cement transport systemincluding loading facilities at participating cement plants, special bulkcement rail wagons, and unloading and distribution systems at KalamboliRailway Terminal near Bombay. Part B of the loan would help finance part of aHuman Resource Development component which would establish demand-driven, in-plant training systems at regional training centers (RTC), attached torespective lead plants, for groups of cement plants having geographicproximity. Part C of the loan would help finance part of a TechnicalAssistance component which includes the following studies and technicalassistance programs: (i) a study of the general environmental status andpollution control measures for the cement industry; (ii) technical assistance

- 3 -

for the Pilot Bulk Cement Transport component; (iil) a feasibility study forbulk cement transport by coastal shipping; (iv) a study for mini-cementdevelopment strategy; (v) a feasibility study for setting up coal washeriesfor the cement industry; and (vi) a feasibility study for use of lignite forthe cement industry.

8. The total cost of the project is estimated to be $736 million, with aforeign exchange component of $110 million. A breakdown of project costs andthe financing plan are shown in Schedule A. Amounts and methods ofprocurement, disbursements, and the disbursements schedule are presented inSchedule B. A timetable of key prcject processing events and the status ofBank Group operations in India are given in Schedules C and D, respectively.The Staff Appraisal Report, No. 8422-IN, dated April 10, 1990, is beingdistributed separately.

9. Agreed Actions. For Part of the Loan, GOI has agreed to relend$298 million of the proceeds of the Bank loan to IDBI and ICICI, in equalproportions, in rupees at a rate of 12 percent p.a., repayable over 20 yearsincluding 5 years of grace, for on-lending to subproject borrowers at theDFIs' term lending rate, currently 14 percent p.a. An understanding was alsoreached that GOI would review the DFIs' term lending rate from time to time inrelation to inflation and other domestic and international market conditionsand adjust this rate as necessary to ensure that the on-lending rate on newsubloans will remain positive in real terms, reflect market conditions andprovide a reasonable spread to the DFIs. For Part B of the loan, GO hasagreed: (i) to pass on $1.6 million of the proceeds of the Bank loan asbudgetary allocations through DCCI to finance part of the Human ResourceDevelopment component; (ii) through DCCI, to enter into Memoranda of Under-standing (NOU) acceptable to the Bank with selected cement companies for theestablisbment of RTCs and to ensure that the RTCs operate effectively andefficiently in accordance with agreed operating guidelines; (iii) to establisha Steering Committee chaired by DCCI; and (iv) to position a ProgramCoordinator by December 31, 1990 to assist implementation of the HumanResource Development component. For Part C of the loan, GOI has agreed:(i) to pass on $400,000 of the loan as budgetary allocations to DCCI tofinance part of the Technical Assistance component in accordance with theterms of references acceptable to the Bank, and (ii) to discuss the resultsand follow-up actions of the assisted studies with the Bank during projectimplementation.

10. IDBI and ICICI have agreed to (a) maintain internal debt:equity anddebt-service coverage ratios acceptable to the Bank; (b) adopt subproject andparticipating company criteria including that for adequate economic andfinancial rates of return; and (c) adopt adequate environmental assessmentrequirements and review procedures, and employ environmental consultantswhenever in-house expertise at IDBI and ICICI is not adequate for subprojectappraisal. For subprojects costing over $20 million, the Bank's approval ofthe IDBI or ICICI appraisal report and the Environmental Impact Assessment(EIA) would be required before a subloan commitment is made. IDBI and ICICIwould seek assurance from subproject borrowers that all subprojects complywith necessary requirements to protect the environment.

11. The Government's entering into Subsidiary Loan Agreements with IDBI andICICI would be a condition of effectiveness of the Bank loan. The effect-

- 4 -

iveness of the Financing Agreement between the Government and DANIDA, and theestablishment of the Steering Committee would be conditions of disbursement ofthe Human Resource Development component.

12. Bjngsft. The proposed project would add about 5 million tpy productioncapacity in cement-deficit regions, bring significant savings in cementtransport costs and reduce the cost of cement in some of the poorest regionsof the country. The project would support modernization and restructuring ofexisting cement companies, reduction in energy and other productLon costs, andimprovement in the economic efficiency of operations. The project would alsosupport installation of pollution control equipment, ensure adequateenvironmental assessment of subprojects, finance a study for subsectoralenvironmental protection and pollution controls, and support productive use ofslag, a waste product of steel plants, which must be disposed of in anecologically acceptable manner. Financing the pilot bulk cement transportproject would pave the way for significant long-term efficiency improvement inthe cement distribution system and promote productivity increases in theconstruction industry. The project would also finance training programs foroperating personnel and environmental professionals in much-needed skillcategories.

13. Rlsks. No unusual technical risks would in-Ive in construction andmodernization of cement plants under the Industry odervization and Restruc-turing component. Introducing a bulk cemont transport system requires thedevelopment of a new marketing and distribution approach and involves manyplayers with substantial investments: it is therefore inherently riskf.Measures that have been designed to miniw±ze the risk are provision of limitedbagging facilities at the unloading terminal, arrangements for phasedimplementation, and provision of further DANDA-financed technical assistancefor market development of bulk cement. Implementation of the Human Rt sourceDevelopment component is likely to be slow due to the innovative nats -a of theapproach and the need to have groups of cement plants joining in a . aoneffort. The Memorandum of Understanding signed between DCCI and tht eadplant's company of each RTC would provide assurances that the lead plants'companies would commit their financial and managerial resources to trainingactivities and that the RTCs would offer training services to other .--ants forappropriate fees. DANIDA has also agreed to finance consultants for implemen-tation assistance for this component.

14. Recommendation. I am satisfied that the proposed loan would comply withthe Articles of Agreement of the Bank, and I recommend that the ExecutiveDirectors approve it.

Barber B. ConablePresident

AttachmentsApril 18, 1990Washington, DC

§W-=A

INDUSTRY RUMULcamSCHEDULE

Proiect Costs and Financina

Estimated Pro1ect Costs:

Lecal zueig Totil-Million --------

Modernization and restructuring 585.0 90.0 675.0Pilot bulk cemer.t transport 37.5 12.5 50.0Human resource development 3.5 6.5 10.0Technical assistance 0.2 1.0 1.2

T-otal 626.2 Z1. 36.2

Financn Plan:

Bank 195.8 104.2 300.0DANIDA 0.0 5.8 5.8Industry 253.5 0.0 253.5Other sources 176.9 0.0 176.9

Toti1 66.2 110.0 736.2

6 -

ZNDZA S9gE IE

CommercialUR La Practice_, ar&g I&tKO Total_ .____-.__. (Million S) ---------

Equipment & educational materials 270 115 3 388(Bank) (270) (27) (2) (299)

Consultants' services andttaining 0 0 5 5

(Bank) (0) (0) (1) (1)Civil works 0 343 0 343

(Bank) (0) (0) (0) (0)

Total in2--70 A5 83(Bank) (270) (27) (3) (300)

JA International competitive bidding.! Commercial practices of IDBI and ICICI for equipment, and of subborrowers

for civil works.L Consultants selected according to Bank guidelines, shopping from at least

three competing suppliers and DANIDA procurement procedures for DANIDAfinanced goods and services.

Disbursement CatLgrles

portiona AOMQu ZTo Be F1nanced

Part AEquipment and Spares 297,000,000 100% CIF, foreign

100% ex-factory, local80% of local expenditures

Consultants' services 1,000,000 100land training

Part BEquipment and educational 1,400,000 100% CIF, foreignmaterials 100% ex-factory, local

80% of local expendituresConsultants and training 200,000 100%

Part C: Consultants 400.000 100%Total 300,000,000

Estimated Disbursements

IBRD XY1991 1992 1993 1994 1995 1996

Annual 25 105 90 40 30 10Cumulative 25 130 220 260 290 300

-7-

a- ~c

T122table of le! Project D=oeassbg ftents

(a) Time taken to prepare project: 1.5 years

(b) Prepared by: Governrent, IDBI and ICICIwith World Bank and DANIDAassistance

(c) First Bank mission: October 1988

(d) Appraisal mission departure: January 8, 1990

(e) Negotiations: March 28, 1990

(f) Planned date for effectiveness: September 1, 1990

(g) List of relevaat PCRs and PlARs: Fourteenth loan to ICICI(Loan No. 2051-IN)

-8- SCHULE DPage 1 of 5

THE STATUS OF l K UP OI0ATIONS IN INDIA............ .............. ..............................

A. STATEISt OF UNK LOANS AND IA CREITS...........................................

(s of March 31, 1"0)US MIllon

(not of canelations)Loan or Fiscal Year ....Credit No. of Approval Purpow low IDA 1/ Udisbursed 2J

72 Loans/ 490.1150 Credits fully disbursed 1053.2

1172-I1 1982 Korba Thermal Power II 400.0 29.73117-?IN 1982 Kadhys Pradesh Major Irrigation * 220.0 71.731178-IN 1982 West Bergal Sochil Forestry 29.0 6.002076-IN 1982 Ragundum Thermat Power II 280.0 23.581280-I1 1983 Gujarat Water Suply 72.0 38.881286-IN 1983 JamuzlKaWshmir and

Haryana Social rjrestry - 33.0 s.27 a/1319-IN 1983 Haryana Irrigation 11 1SO.0 41.97

1332-IN 1983 U.P. Public Tubvoells It - 101.0 14.98

1356-IN 1963 Upper Indravati Hydro Power * 170.0 55.97

2278-IN 1983 Upper Indravati Hydro Power 156.4 - 156.01

1369-IN 1983 Calcutta Urban tevelopsmnt III 147.. 91.82

2283-IN 1983 Central Power Transmissfon 250.7 173.09

2295-IN 1983 Himalayan Watershed Management 46.2 16.21

1383-IN 1983 Naharashtra water Utilization - 32.0 6.55

2329-IN 1983 Madhya Prde"sh Urban 18.1 7.27

1424-IN 1984 Rainfed Areas Watershed Oev. - 31.0 30.89

1426-IN 1984 Population III - 70.0 29.02

1432-IN 1984 Karnataka Social Forestry - 27.0 11.27

2387-IN 1984 Nhava Sheva Port 250.0 - 27.90

2393-IN 1984 Oudhichua Coal 109.0 - 29.07

2403-IN 1984 Cambay Baain Petroteum 213.5 - 75.98

2415-IN 1984 Nedhya Pradesh Fertilizer 203.6 - 44.19

1454-IN 1984 Tamil Nada Water Supply - 36.5 21.99

SF-1Z-IN 1984 Tamil Wadu Water Suppty - 36.5 43.54

1468-IN 1984 Periyar Vaigal tl Irrigation - 17.5 0.44

SF-16-IN 1984 Perlyar Vaigai t1 Irrigation 17.5 13.59

1483-IN 1984 Upper Ganga Irrigation - 125.0 108.75

1496-IN 1984 Gujarat Kedium Irrigation - 172.0 110.64

2416-IN 1984 Ine-irs Sarovar Hydroelectric 17.4 - 12.50

SF-20-IN 1984 Indira Sarovar Hydroelectric - 13.8 16.16

1613-IN #985 Indira Sarovar Hydroelectric - 13.2 16.03

2417-IN 1984 Railways Electrification 279.2 - 89.54

2442-IN 1984 Faralkk 11 Thermal Power 300.8 203.52

2452-lN 1964 Fourth Trombay Thermal Power 135.4 - 16.49

1502-IN 1984 National Cooperative

Development Corporation III 220.0 153.33

1514-IN 1965 Kerata Social Forestry - 31.8 20.70

1523-IN 1985 National Agric. Extension I - 39.1 38.83

1544-IN 1985 Boitay Urban De wlopment - 138.0 120.79

... ...................F

a/ Final disbursements being processed.

- 9 SCIHEDULE D

Page 2 of 5

USt Nillan(net of cancellations)

Loan or Ffscal Year ........................................Credit No. of Approval Purpoe IBD IDA 1/ Udishburd Z/,........... ........... ............................... ......... ......... ..............

2497-IN 19S inrda (COularat) Om and Poer 200.0 200.001552-IN 9 Morads (Gujarat) Om Power - 100.0 fl.711553-IN l9d5 Naraxd Caujorat) Cnt 150.0 152.091569-IN 1985 Second Natiroal Aericultural Ext. - 49.0 37.991611-IN 19S National Socal Forestry - 165.0 116.652498-IN 1985 Jharia Coking Coal 57.7 * 12.082505-111 1965 Mharashtra Petrochemicals 300.0 20.632534-IN 1985 Second Natioral Highpwas 200.0 - 151.872544-IN 1985 Chandrpr Therwal Power 300.0 - 173.942555-IN 1985 Rihad Power Transmission 250.0 - 84.902582-IN 1985 Kerala Power 176.0 - 152.801619-IN 1986 West Bengal Ninor Irrigation - 99.0 120.711621-IN 1986 aharashtra Compsite Irrigation - 160.0 188.931622-IN 1986 Kerala Vater Supply wd Sanitation 41.0 41.961623-IN 1986 West Bel Population 51.0 39.131631-IN 1986 National Agricultural Rsearch It 72.1 70.732629-IN 1986 Industrial Export Oov. Finance 90.0 - 48.72630-IN 1986 ICICI-Indus. Exp. De. Finance 160.0 79.111643-IN 1986 Gujarat Urbon - 62.0 49.672653-IN 1966 MABARD 1 375.0 - 6.802660-IN 1986 Cement Industry 165.0 - 94.222661-IN 1966 ICICI - Cement -4stry 35.0 - 25.291665-IN 1966 Andbra Pradesh It Irrigation - 140.0 156.372662-IN 1966 Andhre Pradesh 11 Irrigation 1S1.0 - 131.002674-1N 1986 Cabined Cyctle Powr 45.0 - 141.082729-IN 1986 Cooperative Fertilizer 150.2 - 6.952730-IN 1986 Cooperative Fertilizer 145.0 55.551737-IN 1987 Bihar Tubewells - 68.0 66.842769-IN 196? Bombay Water Supply &

Sewerage 111 40.0 40.001750-IN 1987 Baabey Mater Supply &

Sewerage II t 145.0 117.711754-IN 1967 National Agrc. Extension III - 85.0 75.151757-IN 1987 Gujarat Rural Rodi. - 119.6 115.841770I1N 1987 National Mater Managesent - 114.0 106.402785-IN 1987 Oil India Petroleum 140.0 93.182796-IN 1967 Coat Mining Qualfty Improvement 340.0 - 138.092613-1 1987 Telecmuniceatifns IX 193.0 - 42.562797-IN 1987 Utter Pradesh Urban Devetopment 20.0 - 20.001780-IN 1987 Uttar Pradash Urban Development - 130.0 109.122827-IN 1987 Karnataka Power 330.0 - 308.332844-1 1987 National Capital Power 485.0 - 364.082845-IN 1987 Talcher Thermal 375.0 - 344.822846-IN 1987 Madras Mater Supply 53.0 - 53.001822-IN 1987 Madras Water Supply - 16.0 4.082893-IN 1988 National Dairy 11 200.0 - 200.001859-IN 1968 National Dairy II - 160.0 96.002904-IN 1988 Uestern Gas Development 283.3 146.602928-IN 1988 IndJs. Fin. & Tech. Asat. 360.0 - 238.62

- 10 SCHEDULE DPaze 3 of,5

USS Miltion(net of cancellations)

Loan or Fiscal Yeer .....................................Credit No. of Approval Purpose ItiD IDA 1/ Undisbursed 2/.......... ............... ........... ..................... . ..................... ......... ..................... ........ .......... ...

2929-IN 1988 Housilng Oev. Finance Corp. 250.0 59.602935- IN 1988 Railtay Nodmrniation Itt 390.0 3`318.332938-11 1988 Karnataka Powr It 260.0 239.102957-IN 1988 Utter Pradash Power 350.0 323.381923-IN 1988 Taidl Nadu Urban 0ev. 300.2 242.031931-IN 1988 Bombey & Nadras Population - 57.0 20.432994-IN 1989 States Roads 170.0 170.001959-IN 1989 States Roads 80.0 62.453024-IN 1989 Nathpa ihakri Power 485.0 * 449.981952-IN 1989 National Seeds III - 150.0 136.503044-IN 1989 Petroleun Transport 340.0 - 340.002008-lN 1969 Vocational Training 250.0 215.673045-IN 1989 Vocational Training 30.0 * 30 102010-IN 1989 Upper Krishna Irrlyatfon 11 - 160.0 134.993050-IN 1989 Upper Krishna Irrigstion 11 165.0 * 165.003058-lN 1989 Export Development 120.0 - 110.003059-IN 1989 ICICI - Export Development 175.0 - 160.002022-IN 1989 National Ser1culture - 147.0 129.593065-IN 1989 Nationsa Sericutture 30.0 30.003093-IN 1989 Electronics Inumstry Dev. 8.0 - 7.so3094-in 1989 ICICI - Electronics tnd. Dev. 101.0 - 91.003095-IN 1989 101 - Elettronies Ind. 0ev. 101.0 - 91.043096-IN 1989 Naharashtra Poewr 400.0 - 380.062057-IN 1989 Nat'l. family telfare 7rng. - 113.3 106.783108-lN 1989 Nat*l. Faily Velfare Trng. 11.3 11.303119-IN 1990 Industrial Technology Development* 14M.A0 145.002064-IN 1990 Industrial Technology Developimant - 55.00 57.133144-IN 1990 PunJab Irrigation/Drainage 5.OO - 15.002076-IN 1990 Punjab IrrigationDrsianege - 150.00 144.16

Total 16134.9 16269.3 11525.5of ihich has been repaid 2402.3 555.6

Total now outstanding 13732.6 15713.7Amnunt Sotd 133.8of which has been repaid 133.8

Total now held by Bank and IDA 3i 13733.6 1S713.7Total undisbursed (excluding '1 7280.9 4044.7

................ ....................... .....

1/ IDA Credft sounts for SR-denomfnated Credits are exp-essed in terms of their US dollarequivalents, as established at the time of Credit negotiations and as subsequenttypresented to the Board.

21 UndWisbused amounts for SDR-denafinated IDA Credits are derived from cumulative disbursementsconverted to their iS dollar equivalents at the SOR/US dellar exchune rate ineffect on September 30. 1989, while original principal is based on the exchange rate ineffect at negotiations. This accounts for the fact that in some tases the urdisbruredbalance as shoam in USS equivalent is higher than the original principal.

3/ Prior to exchange adjustmaent.

* Not yet effective.

- 11 -

SCHEDULE DPase 4 of 5

8. STATENET OF IFC INVESTUENTS.................................

(As of March 31 190).................................

Amount (US million)

fiscal Year ca nwy Loon Equity Total................. ....... ...... . ... ... ....... ..... ..

1959 Repbtlc Forge Company Ltd. 1.S 1.51959 Kirloska Ofl Engines Ltd. 0.8 - 0.81960 Assas Slltimsnite Ltd. 1.4 1.41961 K.S.B. PU3mS Ltd. 0.2 0.21963-66 Precision Searings Indfa Ltd. 0.6 0.4 1.01964 Fort Gloster Industries Ltd. 0.8 0.4 1.21964-75-79/90 MNhindra Ugine Steel Co. Ltd. 11.8 2.7 14.51964 Lakshmi Nachine iorks Ltd. 1.0 0.3 1.31967 Jayshree Chemicals Ltd. 1.1 0.1 1.21967 Indian Explosives Ltd. 8.6 2.9 11.S1969-70 Zuari Agro-Chemdcals Ltd. 1S.2 3.8 19.01976-87 Escorts Limited 1S.6 - 15.61978 Nusing Development Finane Corp. 4.0 1.6 5.61980/82/87io9 Deepak Fertilizer and

Petrochemicals Corporation Ltd. r.s 4.2 11.71981 Coromandet Fertilizers Limited 1S.9 - 15.91981-86-89 Tate Iron and Stool Company Ltd. 72.0 21.4 93.41981/90 Mahindr, Mahindr Limfted 15.0 6.4 21.41981 NagarJura Coated Tubes Ltd. 1.5 0.3 1.81981-86/87 wagarjuna Signode Limited 2.3 0.3 2.61981 Magarjuna Steels Limited 3.5 0.2 3.71982 Ashok LeyLand Limited 28.0 - 28.01982 The Bombay Dyeino and

Mmlacturing Co. Ltd. 18.8 - 18.81982 Bharat Forge Company Ltd. 15.9 15.91982 The Indian Rayon Corp. Ltd. 14.6 - 14.61984-86 The Owulior Rayon Silk anm-

facturing (Vong) Co. Ltd. 16.0 * 16.01985 Sihar Sponge 15.2 0.6 15.81985 BaJsJ Auto Ltd. 23.9 - 23.91985 Nodi Cement 13.0 13.01985 India Lease Developaent Ltd. 5.0 0.3 5.31986 Larsen and Toubro Ltd. 21.8 21.81986 India Equipment Leasing Ltd. 2.5 0.3 2.8

- 12 -

SCHEDULE DPage 5 of 5

Amout (US mitllion)

Fiscal Year Co Wm Loain Equity Total.. .... ..... . . . ..... .... . ...... ...........

1986 Bajaj Teqmo Limited 30.5 30.51986 The 6reat Eastern Shipping

Compeny Ltd. 6.0 S.9 11.91987 Gujarat Narmada Valley Fertilizer 3?.S - 37.51987 Hero Honda Motors Ltd. 7.7 7.71987 Wimco Limited 4.7 4.71987-89-90 Titan Watches Limited 21.7 0.6 22.31987 Export-lrport Bank of India 15.0 - 15.01987 Gujarat Fusion Gtass Ltd. 7.5 1.7 9.21987 The Gujarat Rural Housing

Firnce Corp. 0.2 0.21987 Hindustan Motors Ltd. 37.0 37.01988 Irnel 1.1 1.11989 1B3 0.2 0.21989 Keltron 0.4 0.41989 Gujarat State Fertilizer 28.9 - 28.91989 Ahemdabad 20.5 - 20.51990 Tata Electric 39.5 - 39.5

1990 J.N. Shar 0.4 0.41990 H & I 10.0 - 10.0

1990 UCAL 0.6 0.6

TOTAL GROSS COMMITMENTS 621.5 57.3 678.8

Less: Cancellation, Terminations,Repayments and Sales 330.3 20.8 351.1

Now Held 291.2 36.5 327.7

Undisbursed 159.2 0.8 160.0- -