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Add to Preferred SourcesIFC, a member of the World Bank Group, and Cassa Depositi e Prestiti (CDP), Italy’s national promotional institution, announced a loan of €134 million to support the international expansion of CLN Coils Lamiere Nastri Spa (CLN), a leading Italian automotive parts manufacturer.
The financing package, which includes €84 million from IFC and €50 million from CDP, will primarily support CLN’s plans to modernize and expand local production of advanced automotive components for leading car manufacturers in South Africa. The project will boost South Africa’s automotive industry by increasing value addition through increased localization, introducing new production processes, and training local workers to participate in the international automobile value chain.
IFC Director for Southern Africa, Kevin Njiraini, said: “IFC’s investment in CLN is part of our broader approach to support the South African automotive industry through advisory and investment services. CLN’s expansion in South Africa will promote the competitiveness of the automotive industry, helping create jobs and livelihoods in the country.”
IFC’s financing will consist of a €48 million from IFC’s own account and another €36 million loan through the IFC Managed Co-Lending Portfolio Program, a new syndications platform, which enables institutional investors to passively participate in IFC’s future senior loan portfolio. It represents IFC and CDP’s first transaction under the Master Cooperation Agreement, which aims to streamline lending procedures for joint investments to ease financing to private companies in emerging markets.
The South African economy struggles with high unemployment. Automotive production represents the largest manufacturing sector in South Africa and plays a central role in creating jobs and transferring knowledge and technology in the economy. IFC estimates that increasing the amount of locally produced content to 45 percent, up from the current 35 percent, could generate an economic value of an additional $4 billion and support 80,000 more jobs. Success depends on the ability of local suppliers to build capacity to meet the demands of global automotive companies.
Original source: IFC
Published on 14 November 2018