Bayerische Motoren Werke Aktiengesellschaft (“BMW AG” or together with its subsidiaries, the “BMW”) has invited IFC to provide up to US$150 million financing equivalent in South African Rand (ZAR) for the upgrade of its existing automotive assembly plant to produce the new BMW X3 model in South Africa (the “Project”), for global markets including Europe, Africa and Asia. The IFC financing would be a long-term loan in local currency and would be extended to BMW (South Africa) (Pty) Ltd, Pretoria (“BMW SA”). BMW SA is incorporated in South Africa (“SA”) and engages in the manufacturing, importing, exporting and distribution of motor vehicles, parts and accessories.

The Project will be undertaken at BMW SA's existing assembly plant in Rosslyn (the “Rosslyn Plant”), which was taken over by BMW in 1973 as BMW's first overseas plant out of Germany. Currently the plant produces the BMW 3 Series with about 2,800 direct employees and about 12,000 indirect employees engaged by suppliers. The IFC investment will be used to support the establishment of a new BMW X3 production facility, increase the plant efficiency and upskill employees. The investment will support technological transition of the plant from producing steel body vehicles to vehicle bodies built partially from aluminum with significant impacts to the supply chain.

Along with financing from IFC, there are potential opportunities for IFC advisory services to be provided to BMW SA and its suppliers in the areas of improved efficiency, compliance and clean energy. More specifically, the identified opportunities include:

1. Support across the supply chain including efficiency improvements:

   1. Advice on energy and water conservation practices that would lead to improved operational efficiency and cost-savings as well as possible energy self-supply (alternative fuels and renewable energy solutions) options for suppliers;

   2. Advice to local suppliers on operational efficiency, lean manufacturing practices and quality control, as well as governance issues (BWM SA indicated interest in guiding and coordinating such an effort in this area).

2. Possible in-depth advisory support to BMW SA in staff development, inclusive business practices and community outreach programs, including gender related activities.

3. Possible support to BMW SA’s sustainable energy sourcing initiatives, including biomass-to-energy and solar power projects that would serve as energy self-supply solutions.