Ex-Im bank frees up $2.2 billion to help U.S. exports in India

The U.S. Export-Import Bank on Friday approved a $2.2 billion Indian Infrastructure Facility that will support U.S. exports to India.

The loan covers Indian projects in sectors such as power and renewable energy generation, oil and gas development, small aircraft, airport development and health care.

The move will see eight Indian financial institutions provide their guarantees to expedite processing of Ex-Im Bank-backed medium-term and long-term financing for Indian buyers of U.S. exports. Each financial institution has an underlying pre-approved credit line of $50 million to $250 million, and one lender, Power Finance Co., has a pre-approved line of $800 million. Financing provided under the facility is denominated in U.S. dollars.

   The Indian financial institutions participating in the facility are:

   Power Finance Co. (PFC).

   Infrastructure Development Finance Corp. (IDFC).

   Industrial Development Bank of India (IDBI).

   India Infrastructure Finance Co. Ltd. (IIFCL).

   State Bank of India (SBI), Infrastructure Leasing & Financial Services (IL & FS).

   India Renewable Energy Development Agency (IREDA).

   Punjab National Bank.

The first beneficiary of the new facility is a $29.4 million long-term loan guarantee to support multiple exports of U.S. medical, building and office equipment and services for the construction of Bhopal Medical College in Bhopal, India.

There is a rising demand for U.S. goods and services in India because of their high quality and competitive prices, Ex-Im Bank Chairman and President James H. Lambright said in a statement. This new facility will help Ex-Im Bank to work with major Indian lenders to provide dollar-denominated financing for U.S. exports to India's current and future infrastructure projects. India's Ministry of Finance has estimated that more than $500 billion will be needed to finance development of India's infrastructure. To facilitate financing for U.S. exports for Indian projects, Ex-Im Bank has been working to establish partnerships with business, government and financial institutions in India. In October 2007, Ex-Im Bank Chairman Lambright participated with U.S. Treasury Secretary Henry Paulson in the U.S.-India CEO Forum Infrastructure Investment Conference in Mumbai. Last month, Ex-Im Bank Board Member Diane Farrell and staff conducted business development meetings, focusing on small and medium-sized enterprises, with officials in Hyderbad, Pune, Mumbai and New Dehli.

Source: American Shipper