Slowdown? US Exim Bank gives India a high five

Going by the sheer number of projects coming up with funding from overseas agencies, India is likely to emerge as the largest market for the US Exim Bank in the next 12-18 months. The fact speaks for itself: The official export credit agency of the US federal government ranks India at No 2, next only to Mexico, in credit commitments.

“India is second only to Mexico globally. The Exim Bank has committed $7 billion to India while it is $8.5 billion for Mexico and at the rate India is growing, it could be the single-largest market for us in 12-18 months,” said Fred Hochberg, US Exim Bank’s chairman and president. Currently on a South India tour, he called on Kiran Kumar Reddy, chief minister of Andhra Pradesh, on Friday. Hochberg termed the meeting as “introductory”, adding he was meeting more private entrepreneurs, including those from the GVK Group.

“Andhra Pradesh is seeing much of the activity within India. Our focus is on energy, renewable energy, power transportation and other activities. The idea is to promote exports from the US,” he explained.

In terms of sectoral exposure, power gets the top billing from the Bank. Of the $7-billion commitment for Indian projects, about 30% is in the power sector alone. “We are very excited about the power sector growth in India. India’s growth is good and we will continue our investments in the sector. US is one of the leaders in technology and turbines. We look to finance these projects. Out of the $7 billion commitments, about a third is in the power-related sector,” he said.

Additionally, the bank is exploring opportunities in other sectors, including solar and wind energy and oil and gas. Medical devices, medical equipment, agriculture and agrology have been identified as some of the areas for funding.

It financed $176 million for solar projects in Rajasthan and Gujarat last year. “In fact, we are financing more solar projects in India than any other country. Then, we are also financing oil and gas projects. We have also financed the Samalkot power project of Reliance. We have also done some petro chemical projects,” he said.

Meanwhile, the agency’s chairman has clarified that the Exim Bank had not granted any loan to Amerind, which has come up with a proposal to set up a refinery in Andhra Pradesh. It was based on Amerind’s claim that since it was being funded by the Exim Bank of the US, the Andhra Pradesh government has agreed to allocate land to the company for setting up of the project.

“We had provided a letter of interest to Amerind and that does not mean we have granted any loan to it. We are yet to review the project,” he said.