IFC Helps Mobilize Mizuho Corp Bank's Financing for Transmission Project in India

IFC, a member of the World Bank Group, is helping Mizuho Corporate Bank finance a power transmission line project that operates transmission links between East and Northeast India and power-deficit North India.

IFC’s long-term maturity currency swap will enable Mizuho Corporate Bank’s participation in the project without any need to fund in local currency, addressing one of the issues for foreign banks looking to fund infrastructure projects in the country.

“IFC’s innovative structure, the first of its kind to be executed globally, allows a bank to invest U.S. dollars to participate in a local currency loan. This will enable Mizuho Corporate Bank to invest in Indian infrastructure projects,” said Takeshi Kurita, General Manager, Global Structured Finance Division, Mizuho Corporate Bank. “We are keen to do more through creative financial structures that address the needs of projects and meet the requirements of international lenders.”

Participation from many more international commercial banks through similar novel financial structuring mechanisms can help meet India’s rising project financing needs to address the country’s tremendous infrastructure gaps.

Paolo M. Martelli, IFC Director for South Asia, said, “India, its infrastructure, and especially its energy requirements are a priority for IFC. To meet India’s needs for project financing in the sector, our strategic focus has been one of evolving innovative frameworks to support private sector participation in generation, transmission, distribution, renewable energy, and rural electrification.”

IFC provided a 15-year loan in 2004 to Powerlinks Transmission Limited, a joint venture between Tata Power Company Limited and Power Grid Corporation of India, for their project connecting Tala Hydro power project in Bhutan with the grid in India. This was the first public-private partnership transmission line project in South Asia.

Operating since September 2006, electricity generated by Tala hydroelectric power plant in Bhutan is transmitted to power-starved parts of North India. The project facilitates improved evacuation of hydropower from Bhutan contributing to its economy in addition to reducing power shortages in North India.

To learn more about IFC’s activities, visit www.ifc.org/southasia.

About IFC

IFC, a member of the World Bank Group creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing capital for private enterprise, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit www.ifc.org.

About Mizuho Corporate Bank

Mizuho Corporate Bank is one of Japan’s leading banks and provides optimal solutions to meet the increasingly diverse and sophisticated needs of customers in the areas of finance and business strategies, focusing its efforts on serving major corporations, financial institutions and their group companies, public sector entities, and Japanese and international companies overseas. For more information, visit http://www.mizuhocbk.co.jp/english/