Saturday, June 6, 2009

Legal agreements for World Bank additional financing for SIDBI signed

 
The legal agreements in respect of additional financing from the World Bank to the tune of USD 400 million to Small Industries Development Bank of India (SIDBI) were signed, here today. Dr.Anup K.Pujari, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, Dr.N.Roberto Zagha, Country Director, World Bank and Shri R.M.Malla, CMD, SIDBI signed the agreements on behalf of Government of India, the World Bank and SIDBI respectively. 

The additional IBRD financing is for the multi-donor assisted Small and Medium Enterprises Financing and Development Project that was earlier implemented by SIDBI. The loan is being taken by SIDBI directly from the World Bank with a guarantee from Government of India. The project had an IBRD loan component of US $ 120 million. The project had performed very well and keeping in view the outstanding performance of the project, SIDBI had requested for an additional IBRD financing of $200 million, which was forwarded to the World Bank by Department of Economic Affairs in August, 2008. This was later enhanced to $400 million owing to the enhanced credit requirements of SMEs due to the current economic down-turn. The objectives of the project include improved access of SMEs to concessional finance and providing business development services, thereby fostering growth competitiveness and employment creation of SMEs. The project has three components viz. Credit Facility, Risk Sharing Facility and Technical Assistance Component. This additional financing is intended to be allocated to scale-up the Credit Facility and the Risk Sharing Facility components of the project. 

The agreements were finalized during negotiations held in New Delhi on 20-21 March, 2009.

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