US Exim Bank to lend $6 bn to Indian airline cos

Mumbai: Export-Import Bank of the US is looking to lend more than $6 billion to Indian airline companies such as Jet Airways and Air India for aircraft financing in the medium term, according to Mr James Lambright, its Chairman and President.

Mr Lambright was in India to sign agreements with eight Indian financial institutions for financing facilities totalling $2.2 billion under the India Infrastructure Facility.

The institutions and the pre-approved limits are IDBI-$250 million, India Infrastructure Finance Corporation- $250 million, IDFC-$250 million, IL&FS-$100 million, State Bank of India-$250 million, Punjab National Bank-$250 million, Power Finance Corporation - $800 million and Indian Renewable Energy Development Agency Ltd-$50 million.

Of these, the bank signed agreements with IDBI, IDFC, IL&FS and State Bank of India on March 12.

“These pre-approved levels are just the starting point. We can increase them if it is relevant,” Mr Lambright said, speaking to reporters in Mumbai today.

The financing facilities are available for infrastructure related goods and services manufactured in the USand it could form part of the entire project cost.

The credit is US dollar denominated and linked to LIBOR, which would make it cheaper than a rupee loan or an overseas loan raised from commercial banks overseas, by Indian companies, Mr Lambright said.

US Exim Bank already has an exposure of $3.5 billion to Indian companies such as Jet Airways, Air India and Reliance Petroleum.

India’s exposure as part of the bank’s balance sheet is about 6 per cent currently. “We have a strong interest in expanding business in India.

“We are optimistic about the Indian economy and are looking forward to working with private corporate sector in India,” Mr Lambright said.