International Banking :European Bank keen to partner with Indian firms

September 29, 2014 
Multilateral lender European Bank for Reconstruction & Development is keen on forging partnerships with Indian companies that want to expand operations to select overseas markets. 

"We would like to engage more with Indian companies with all kinds of financial instruments if they are willing to invest in our countries of operation," EBRD Managing Director Riccardo Puliti said at an Assocham event here. 

EBRD's investments with Indian firms include financing a USD 89.9 million loan for Tata Power and 28 million euro loan with JSW Steel - both in Georgia. It has also invested in loan and equity with SREI Infrastructure Finance (6.5 million euro) and with Tata Tea (USD 13.2 million) - both in Russia.

EBRD Director Nandita Parshad said: "We cannot invest in India, we cannot operate here. We are working with around 10 (Indian) companies.... We are willing to have more Indian companies that can work together. But obviously they must be companies that want to operate where we are.

"There are basically three areas where we can help Indian companies, financing your investments in our countries, procurement and trade facilitation. We have nine Indian banks now that have signed up to the trade facilitation programme." 

Assocham President Elect Sunil Kanoria said: "We intend to push with the (Indian) government to become a member of EBRD. I think one of the key markets which can be a very good opportunity for India would be the Eastern European countries. By India becoming a member of EBRD, it can really strengthen that relationship more and create awareness for Indian groups to look at more opportunities" 

To this, Prashad said the ball is in the court of the Indian government it wants to formally take this forward. "Over the years there have been a lot of discussions but India has never formally applied, part of it is because there have been so many different priorities. We won't be approaching the Indian government." 

Puliti said India is an important source of foreign direct investment in the EBRD's countries of operations. "The value of the joint India-EBRD investments stood at about 800 million euro as of June 2014 and the EBRD accounted in these joint investments with about 630 million euro and the rest were from Indian companies in private sector specially in Russia, Turkey, Romania." 

EBRD is owned by 65 countries (equity participation) and two inter-governmental institutions. It has a capital base of 30 billion euros. The bank has a AAA rating from all three main credit rating agencies including Standard & Poor's, Moody's and Fitch.