World Bank private sector lender International Finance Corp is to spend EUR135m onVolkswagen India’s Pune car assembly plant to help create local jobs.

IFC told Reuters the finance would consist of a EUR60m loan from its own resources and an additional syndicated loan of EUR75m raised through commercial banks Socit Gnrale, Bank of Mitsubishi, DBS Bank, and Fortis Bank.

The European Investment Bank and German development bank KFW were considering further loans to meet the project’s remaining funding needs, IFC added.

Construction of the plant, with capacity of 110,000 cars a year, started in 2007 and Volkswagen has itself spent about EUR245m on it.

The investment would “support the development of India’s car manufacturing sector and sends a strong signal to other investors in the country,” Dimitris Tsitsiragos, IFC director for global manufacturing and services, said.