The Japanese Export and Import Bank has given an in-principle nod to extend finance amounting to Rs 210 crore to Haldia petrochemicals, Spic Limited and Chambal Fertilisers for their respective expansion plans.
Loan to these corporates will be given under the supplier credit scheme, wherein these companies have to import more than 30 per cent of their machinery from Japanese companies, the banks chief representative for South Asia, Masahito Ikeda said.
Of the prescribed amount, Rs 71.5 crore would go to Haldia Petrochemicals, Rs 80.7 crore to Spic and Rs 57.8 crore to Chambal, Ikeda said.
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The repayment will be in 20 instalments spread over a period of 10 years, he said, adding the coupon rate will be based on the interest rate guidelines prescribed by Organisation for Economic Cooperation and Development (OECD).
Ikeda said the disbursement of the loan will be directly made to the Japanese exporter only after the shipment of the machinery to the Indian companies.
He said this would be the first time that the bank would be directly financing Indian corporates.
The bank has received such proposals from various private companies seeking loan under the supplier credit schemes. These include big companies from the steel, power, fertilisers and chemical sectors, Ikeda said.
India is a good potential market and the Japanese companies are willing to invest in the country.
The political uncertainty would in no way hamper investment opportunities, he said.
A survey conducted by the bank, having about 342 Japanese companies involved in foreign direct investment (FDI), has said that India is a promising investment destination in the medium-term.
In 1996, the survey had shown 66 Indian firms as having FDI potential.
This has increased to 77 during 1997, Ikeda said.
The bank provides semi-commercial lending to India through its tied and untied loan facilities and finances projects to promote Indo-Japanese joint ventures.
Under the Indo-Japanese promotion scheme, the bank has already provided finances to the tune of Rs 200 crore to the Industrial Development Bank of India, he said.