Hyundai Motor Pakistan Project (MIGA-3612)

Countries
  • Pakistan
Where the impacts of the investment may be experienced.
Financial Institutions
  • Multilateral Investment Guarantee Agency (MIGA)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Active
Bank Risk Rating
B
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Jan 10, 2018
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Sojitz Corporation
The holder of the loan, grant, or other investment.
Sectors
  • Agriculture and Forestry
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Guarantee
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 103.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Primary Source

Original disclosure @ MIGA website

Updated in EWS Jan 5, 2018

Disclosed by Bank Nov 21, 2017


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Project Description
Project description Sojitz Corporation of Japan has applied for MIGA guarantees of up to JPY12.3 billion (US$103 million) for its equity investments in Hyundai Nishat Motor Private Limited project in the Islamic Republic of Pakistan and its loan guarantees to commercial lenders to the project. The guarantees are available for up to 15 years, and will provide coverage against the risks of currency inconvertibility and transfer restriction, expropriation, war and civil disturbance and breach of contract. The project involves the design, construction, and operation of a greenfield motor vehicle assembly plant with a maximum annual production capacity of 30,000 units, located within the M3 industrial City in Faisalabad of Punjab province. The project will establish flagship dealerships, bring new technologies to improve production efficiencies, as well as increase competition within the domestic automobile sector. Information on this project is being disclosed under the early disclosure procedures outlined in MIGA's Access to Information Policy. Environmental Categorization The project is a category B under MIGA's Policy on Environmental and Social Sustainability. Click here to view the Environmental and Social Review Summary. Development Impact The project is expected to support over 500 sustainable jobs once the assembly plant is fully operational, in addition to short term jobs created during the construction phase. The project will raise domestic production standards by bringing in international expertise, yet also support local businesses by utilizing and further developing existing network of suppliers for localized automotive components. Significant contribution to government revenues can be expected in the form of payments for sales taxes and import duties. MIGA's proposed support for the investment is aligned with the World Bank Group's Country Partnership Strategy to support private sector development, as well as MIGA's mid-term strategy FY18-20 to support investments to countries eligible for financing from the International Development Association (IDA). Pakistan is an IDA-blend country as it is also creditworthy for borrowing from the International Bank for Reconstruction and Development (IBRD).
Investment Description
  • Multilateral Investment Guarantee Agency (MIGA)
Private Actors
Contact Information
ACCOUNTABILITY MECHANISM OF MIGA The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/