International Finance Corporation                                    1818 H Street, NW
                                                                       Washington DC 20433, U SA




FOR RELEASE:May 31, 1989                               CONTACT&kwow Spio-Garbrah
            Press Release No. 89/51                           (202) 473-7716


             INDIAN ELECTRIC UTILITY TO EXPAND PRODUCTION WITH IFC LOAN


       A private Indian utility company will receive loans of approximately
   US$20 million from the International Finance Corporation (IF'C) to enable it
   unde�take an US$83.3 million expansion of electricity service to its growing
   market.   The loan is IFC's first investment in India's power sector.


       IFC is the World Bank affiliate whose mandate is to stimulate the growth
   of the private sector in developing countries.


       Under the terms of an agreement signed May 30, IFC will make loans of
   US$10 million and SwF16 million in the Ahmedabad Electricity Company Ltd.
   (AEC) for AEC to build a gas-fired generation unit to supply additional power
   to the cities of Ahmedabad and Gandhinagar in the state of Gujarat.


       AEC currently depends on high--cost coal burning plants for electricity
   generation and is unable to fully meet the growing needs of its customers.
   AEC supplies industrial and commercial users and over 570,000 households--a
   market that is increasing by some 30,000 new customers each year.         To
   supplement its own power generation, AEC currently purchases about a quarter
   of its peak load requirement from the state grid.   When the natural gas-fired
   plant becomes operational, AEC will reduce its dependence on imports from the
   state grid, lower its power generation costs, and retire its oldest coal unit
   for use on a standby basis, thereby decreasing the pollution caused by
   burning coal.


       Although the power sector in India absorbs about 20 percent of all public
   investment, it is characterized by shortages which impede development.         In


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