IFC Approves $100M Loan for JK Tyre to Boost Green Manufacturing in India

Funding to Expand Energy-Efficient Production of Radial Tyres and Strengthen Domestic Supply Chains.

The International Finance Corporation (IFC) has approved a $100 million Sustainability-Linked Loan (SLL) to JK Tyre & Industries, a prominent Indian tyre manufacturer and part of the JK Organisation conglomerate. This landmark funding initiative marks the first SLL in India’s tyre sector, reflecting a commitment to fostering sustainable and climate-smart manufacturing.

The funding package comprises $30 million allocated directly to JK Tyre & Industries Limited and up to $70 million for its subsidiary, Cavendish Industries Limited (CIL). The investment will enable the company to expand tyre production capacity at two facilities:

• Banmore Plant in Madhya Pradesh: Focused on Passenger Car Radial (PCR) tyre production.
• Laksar Plant in Uttarakhand: Enhancing output of Truck and Bus Radial (TBR) tyres.

Driving Sustainability and Local Development

The funding will emphasize energy-efficient manufacturing processes, reduce the carbon footprint, and bolster local supply chains. It is expected to generate employment opportunities, particularly in rural and semi-urban regions.

“This partnership with IFC reinforces our dedication to sustainable development while supporting our business expansion,” said Dr. Raghupati Singhania, Chairman & Managing Director of JK Tyre & Industries. “Through this sustainability-linked loan, we are aligning our growth objectives with impactful environmental and social outcomes, ensuring we remain leaders in green manufacturing.”

IFC’s Vision for Green Manufacturing

The collaboration is part of IFC’s broader commitment to advancing India’s green ambitions. The loan agreement includes sustainability performance targets such as reducing greenhouse gas emissions and promoting the use of renewable energy in production.

“Sustainable manufacturing is a cornerstone of India’s journey toward climate resilience,” said Riccardo Puliti, IFC’s Regional Vice President for Asia and the Pacific. “This investment not only elevates India’s tyre industry but also sets a benchmark for adopting sustainability-linked financing in manufacturing. It reinforces our shared goal of fostering climate-smart innovation and strengthening domestic industries.”

Key Impacts and Additional Initiatives

The SLL is projected to:

• Cut Energy Use: Adoption of energy-efficient technology to reduce power consumption across facilities.
• Promote Renewable Energy: Shift towards cleaner energy sources for operations.
• Support Local Economies: Strengthen supply-chain integration and provide skill development opportunities for workers.
• Catalyze Sectoral Change: Inspire other manufacturers in India to adopt sustainability-linked financing models.

Strengthening Market Leadership

JK Tyre is among India’s leading manufacturers with a global presence in over 100 countries. With this funding, the company aims to reinforce its market position in the radial tyre segment while contributing to India’s goal of becoming a global hub for sustainable manufacturing.

This initiative signals a turning point for India’s tyre industry, marrying financial growth with environmental responsibility to pave the way for a greener, more self-reliant future.