IFC finances Piaggio's expansion drive in Asia
28 July 2010
World Bank Group member, IFC, has lent €45 million loan to Italian auto maker Piaggio to help it expand production of its environmentally-friendly scooters, motorcycles and light commercial vehicles in Vietnam and India, creating new jobs and building the market for more fuel-efficient transport.
The loan will enable the company to increase the production capacity of its Vinh Phuc plant in Vietnam and improve its manufacturing capability to 100,000 two-wheeled vehicles each year.
The company's existing plant in Baramati, in the state of Maharashtra, India, which manufactures fuel-efficient diesel and turbo engines for its two wheelers and light commercial vehicles will also benefit from the loan.
"One of Piaggio's strategic priorities is expansion in emerging markets, particularly in Asia, with an increasingly eco-friendly and fuel-efficient product pipeline for both our two-wheeler and light commercial vehicles ranges," said Roberto Colaninno, Piaggio Group chairman and CEO. "We work closely with our local suppliers to improve their industrial processes, quality, and environmental standards."
The expansion projects will create approximately 300 new jobs in India and 480 new jobs in Vietnam.
Dimitris Tsitsiragos, IFC director for global manufacturing and services, said, ''IFC is pleased to finance our first project with Piaggio. This will introduce more fuel-efficient engines in India and Vietnam and improve environmental standards in the transport equipment sector.''
In India, Piaggio's light commercial vehicles are popular with smaller business owners because they are a cost-effective way to distribute products, particularly in crowded cities.
IFC is the largest global development institution focused on the private sector in developing countries.