World Bank Group member IFC and Italy’s national promotional institution Cassa Depositi e Prestiti (CDP) have announced a loan of US$151mn to Coils Lamiere Nastri Spa (CLN), Italian automotive parts manufacturer
This loan is to support CLN’s international expansion to South Africa.
The financing package, which includes US$95mn from IFC and US$56mn from CDP, will primarily support CLN’s plans to modernise and expand local production of advanced automotive components for leading car manufacturers in South Africa.
The project will boost South Africa’s automotive industry by increasing value addition through increased localisation, introducing new production processes, and training local workers to participate in the international automobile value chain.
CEO of CLN Group, G. Perris Magnetto, said, “We are greatly honoured to be part of this important investment plan, which will help our group strengthen our position in South Africa as a strategic supplier for the leading automotive industry.”
Kevin Njiraini, IFC director for southern Africa, added, “IFC’s investment in CLN is part of our broader approach to support the South African automotive industry through advisory and investment services.”
“CLN’s expansion in South Africa will promote the competitiveness of the automotive industry, helping create jobs and livelihoods in the country,” Njiraini noted.
IFC’s financing will consist of a US$54mn from IFC’s own account and another US$40mn loan through the IFC managed co-lending portfolio programme, a new syndications platform, which enables institutional investors to passively participate in IFC’s future senior loan portfolio.
It represents IFC and CDP’s first transaction under the Master Cooperation Agreement, which aims to streamline lending procedures for joint investments to ease financing to private companies in emerging markets.
The South African economy struggles with high unemployment. Automotive production represents the largest manufacturing sector in South Africa and can play a central role in creating jobs and transferring knowledge and technology in the economy.
IFC estimated that increasing the amount of locally produced content to 45 per cent, up from the current 35 per cent, could generate an economic value of an additional US$4bn and support 80,000 more jobs.
