World Bank insures vehicle assembly project in Pakistan

The US-based international financial institution World Bank (WB) has issued guarantees for $66 million commercial loan to projects in Pakistan.

The guarantee was issued to Sojitz Corporation, a Japanese trading company, for Hyundai Nishat Motor vehicle assembly plant in Lahore. Hyundai Nishat Motor is a joint venture between the Korean carmaker Hyundai and the Nishat Group, one of the largest conglomerates in Pakistan.

As per the Global Trade Review, the guarantee issued by World Bank insurance arm, the Multilateral Investment Guarantee Agency (Miga). It will support the construction, design and operation of a vehicle assembly plant, which will produce three Hyundai-branded vehicles from 2020. The plant will have a yearly production capacity of 30,000 vehicles.

“This project will help strengthen Pakistan’s automotive industry, reducing vehicle shortages, improving safety standards, and increasing the choices consumers will have available to them,” said Miga CEO and executive vice-president, Keiko Honda.

The report further adds that the Japan based Sojitz, will operate a number of dealerships in Pakistan and will open a number of franchises across the country.

Earlier in June, it was learnt that Sojitz Corporation along with Nishat Mills Limited and its Associates, a consortium forming part of major Pakistani conglomerate Nishat Group, and Millat Tractors Limited will enter the assembly, wholesale, and retail business for Korean Hyundai Motor Co. brand vehicles in Pakistan.