28611 - Kalyani Gerdau

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Summary of Proposed Investment

Project Number

28611

Company Name

GERDAU STEEL INDIA LIMITED

Date SPI Disclosed

Nov 24, 2009

Country

India

Industry

Manufacturing

Projected Board Date

Dec 24, 2009

Status

Completed

Sector

Integrated Steel Works

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Feb 2, 2010
Signed : Feb 11, 2010
Invested : Sep 3, 2010

Project Description

The proposed project will support the expansion of the steel activities of the Gerdau Group (Gerdau), the Brazilian steel major, through a debt to Kalyani Gerdau Steels Limited (KGSL) in Karnataka, India. This debt will be used to finance a 6MW gas recycling power generation plant, a sintering plant and a rolling mill.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	25.0
Equity

Development Impact

Support India’s infrastructure development through creation of adequate steel capacity Support conversion of an idle asset into an operating asset, with global efficiencies Promote energy efficiency through gas recycling power generation plant and reduce heat emission into the environment Create a number of direct and indirect jobs in and around the region, by reviving the operations of the plant

Assist an diverse and efficient global player to revive a distressed asset and enter a high growth market in an IDA country Provide financing suitable to long-term nature involving restoration of an idle asset. Also, the Sponsors see IFC’s role as a long-term financier as a value addition to its entry strategy in India Continually share its best industry practices and benchmarks in the steel sector Work with the company in adopting best practice environmental and social standards

This is a Category B project according IFC’s Procedure for Environmental and Social Review of Projects.

The key environmental and social issues associated with this project include: environmental and social management systems, HR policies and practices - including those for contract labor, management of occupational health and safety - including that during construction, resource consumption (water, energy), air emissions and waste management, GHG emissions (including those associated with transportation), emergency management plans and community engagement, safety and security.
Further details on the potential environmental and social impacts of the project, corresponding mitigation measures and guidance on how and where information about the project can be obtained are provided in the IFC Environmental & Social Review Summary and Environmental &Social Action Plan.

Contacts

For Inquiries About the Project, Contact

Mr. K.M. Bhat Kalyani Gerdau Steels Limited Village Jambulpadu, Tadipatri Mandal, Ananthpur District, Andhra Pradesh 515 411 Tel: 08558-220 222 Fax: 08558-222 299Email: kmbhat@kalyanigerdau.com

For Inquiries and Comments About IFC, Contact

General IFC Inquiries IFC Corporate Relations 2121 Pennsylvania Avenue, NW Washington DC 20433 Telephone: 202-473-3800 Fax: 202-974-4384E Mail: Webmaster

Local Access of Project Documentation

Mr. K.M. Bhat Kalyani Gerdau Steels Limited Village Jambulpadu, Tadipatri Mandal, Ananthpur District, Andhra Pradesh 515 411 Tel: 08558-220 222 Fax: 08558-222 299Email: kmbhat@kalyanigerdau.com

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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