The Export-Import Bank (Exim Bank) of the US is bullish about financing some big ticket infrastructure projects especially in the logistics and power sector in India this year with the government’s renewed focus on infrastructure.
The Washington-based export-credit agency had set up the ‘Indian Infrastructure Facility’ in April last year for supporting US exports to Indian projects in sectors such as power and renewable-energy generation, oil and gas exploration, airport and seaport development, railway and urban transit, and healthcare.
The facility included nine Indian financial institutions including State Bank of India, India Infrastructure Finance Company Limited, Power Finance Corporation with a total financing capacity of $2.45 billion.
Speaking to Business Standard on the sidelines of an interactive seminar organised by Confederation of Indian Industry, Diane G Farrell, member, board of directors, Exim Bank of the United States said, “The fast-growing Indian market offers enormous opportunities for US exporters in many sectors including transportation, power and energy and infrastructure development. We see huge opportunity in India, especially with the government’s renewed commitment to infrastructure and opening up the PPP route which will definitely attract US companies.”
However, she pointed out that till date only about $100 million of the infrastruture facility had been authorised because of the existing cap on external commercial borrowings and also the regulations of the RBI and the government on loan guarantees for Indian banks.
The bank has had talks with the ministry of finance and RBI in this regard and hopes to resolve the issues.
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Exim Bank was mainly established with the mandate to boost financing of credit-worthy entities and facilitate export of goods and services of US origin in order to help create and maintain US jobs.
Now, with the economic downturn, more and more US companies are looking towards India for exports and sustenance of jobs.
Raymond J Ellis, vice president & manager, strategic initiatives division of the bank, said that the bank would focus more on airports, ports and roads sector apart from renewable energy and power this year.
The bank has recently approved a $2-billion loan guarantee to Air India for buying Boeing aircraft.
"Despite the recession, our business in India has been really doing good in India, which is one of the key markets for us and we look forward to more such big ticket financing projects," said Ellis.
"In 2007, the Exim Bank authorised more than $1.4 billion to support US exports to India, including a $500 million loan guarantee to Reliance Petroleum for the Jamnagar refinery," he said.