IFC Sanctions $100 Million Sustainability-Linked Loan to JK Tyre
Udaipur: In a significant development for India’s manufacturing sector, the International Finance Corporation (IFC) has approved a $100 million Sustainability-Linked Loan (SLL) to JK Tyre & Industries, a leading Indian tyre manufacturer with a global footprint. The funding, which includes $30 million allocated to JK Tyre & Industries Limited and up to $70 million for its subsidiary Cavendish Industries Limited (CIL), is aimed at fostering sustainable growth in tyre manufacturing.
Boosting Tyre Production and Sustainability
The investment will support the expansion of tyre manufacturing at two key facilities:
- Passenger Car Radial (PCR) Tyres: Production capacity will be enhanced at JK Tyre’s Banmore plant in Madhya Pradesh.
- Truck and Bus Radial (TBR) Tyres: The Laksar plant in Uttarakhand, operated by CIL, will focus on ramping up energy-efficient TBR tyre production.
The initiative aligns with India’s green manufacturing goals by promoting climate-smart production practices, strengthening local supply chains, and creating high-quality jobs in the process.
Commitment to Sustainable Development
Dr. Raghupati Singhania, Chairman & Managing Director of JK Tyre & Industries, expressed optimism about the collaboration, stating:
“We are delighted to strengthen our relationship with IFC, securing a $100 million Sustainability-Linked Loan to fund our growth plans. By aligning financing to sustainability goals, we aim to drive positive environmental and social impact while achieving our growth objectives. This reaffirms our commitment to sustainable development, while embracing a holistic approach to bolster our presence in key product segments.”
IFC’s Role in Driving Green Manufacturing
Riccardo Puliti, IFC’s Regional Vice President for Asia and the Pacific, highlighted the significance of this partnership:
“Sustainable manufacturing is key to realizing India’s green ambitions. The enduring partnership between IFC and JK Group demonstrates our shared commitment to this vision. Our latest investment will drive climate-smart manufacturing, enhance supply-chain integration, create quality jobs, and propel India towards self-reliance in domestic production. The SLL, a first in India’s tyre industry, aims to set a benchmark and catalyze widespread adoption across the manufacturing sector.”
Setting Industry Benchmarks
This is the first time an SLL has been introduced in India’s tyre manufacturing industry, marking a significant milestone. By tying financing to sustainability targets, the initiative not only strengthens JK Tyre’s position in the market but also sets a precedent for the broader manufacturing sector.
Impact on India’s Manufacturing Sector
The partnership between IFC and JK Tyre underscores a shared commitment to:
- Sustainability Goals: Supporting energy-efficient manufacturing processes.
- Economic Growth: Strengthening domestic production and reducing import dependency.
- Job Creation: Generating employment opportunities in local communities.
- Supply Chain Integration: Enhancing the resilience and efficiency of supply chains.
