Source : Yogima Seth Sharma,Digitalfc: Apr 06 2011 , New Delhi
" Always remember that the future comes one day at a time. "
-Dean Acheson
-
In a move that could boost project exports in India,
Export-Import Bank of India
(Exim Bank) along with Export Credit Guarantee Corporation (ECGC)
of India has set aside Rs 2,000 crore to provide buyers’
credit to large projects overseas.
This will benefit companies
like ONGC, Bhel, Punj Lloyd and L&T,
as they are bidding for projects overseas.
The scheme, which is buyer’s credit under National Export Insurance Account (NEIA), would come with maximum exposure of $ 2 billion from ECGC with $ 100 million cap for each project.
It will be used to fund big projects abroad with eight to 10 years gestation period and 85 per cent of the contract value will be funded. Under the scheme, sovereign governments and government-owned entities will be eligible for credit for import of goods and services from India on deferred payment terms.
It will be used to fund big projects abroad with eight to 10 years gestation period and 85 per cent of the contract value will be funded. Under the scheme, sovereign governments and government-owned entities will be eligible for credit for import of goods and services from India on deferred payment terms.
Though Exim Bank continues to provide credit to buyers, currently it is low value credit with five years tenure. “The move is aimed at enabling larger project exports in sectors like power, roads, railways, water resources, oil and gas to provide competition to Indian companies vis-à-vis peers from other nations in project bids,” TCA Ranganathan, chairman and managing director of Exim Bank of India said.
Exim Bank has also identified 30 countries where bulk of funding would be focused. These are in Central Asia, Africa, West Asia, South-east Asia and Eastern Europe and include countries like Bangladesh, Maldives, Indonesia, Vietnam, Libya, Morocco, Nigeria, Kenya, Zambia, Uganda, Kazakhstan, Russia and Belarus.
“At this juncture, we will provide total cover of $ 2 billion with single project exposure of $ 100 million. However, we hope to take the total cover to $ 10 billion with single project cover of $ 1 billion as more and more Indian companies are bidding for government-run projects overseas,” Arvind Mehta, chairman of ECGC added.
Exim Bank has also identified 30 countries where bulk of funding would be focused. These are in Central Asia, Africa, West Asia, South-east Asia and Eastern Europe and include countries like Bangladesh, Maldives, Indonesia, Vietnam, Libya, Morocco, Nigeria, Kenya, Zambia, Uganda, Kazakhstan, Russia and Belarus.
“At this juncture, we will provide total cover of $ 2 billion with single project exposure of $ 100 million. However, we hope to take the total cover to $ 10 billion with single project cover of $ 1 billion as more and more Indian companies are bidding for government-run projects overseas,” Arvind Mehta, chairman of ECGC added.
