The proposed investment fits into IFC’s crisis response for Covid-19 financing and would help fill the company’s cash flow gaps and provide for timely completion of the project.
The captive power plant will be funded through the company’s internal cash flows, according to IFC, the World Bank's investment arm.
IFC's financing will also help to add around 100 permanent skilled jobs and 250 temporary jobs and preserve 800 temporary jobs during construction, as a result of the expansion.
The expansion will also ensure the availability of caustic soda at competitive prices, and key raw materials to downstream industries such as aluminum, paper, detergents, agro-chemicals, and pharmaceuticals.
IFCs investment is intended to promote the resilience of real sector markets, by ensuring continued supply of goods and services in sectors affected by reduced demand, price reductions and exchange rate volatility thereby mitigating the effects of the economic downturn. The chemicals sector, an important sector in India is already exposed to the effects of severe supply chain disruptions and slowing economic growth
The company will benefit from IFC's long tenor offering (10-year tenor) which is useful for companies
such as DCM Shriram
that operate in a largely cyclical business. IFC will play a countercyclical role providing liquidity to bridge any funding gap triggered by the effects of Covid-19.