By Arun Kumar, Washington, Sep 20 : The Export-Import Bank (Ex-Im Bank) of the US has given India's national carrier Air India USD 548.6 million in loan guarantees to support the purchase of Boeing aircraft.
Air India chairman and managing director Raghu Menon and Ex-Im Bank chairman James H. Lambright signed the deal Friday at a ceremony at the bank headquarters here. Air India is officially called the National Aviation Company of India Limited (NACIL).
"We greatly value Ex-im Bank's contribution in partnering with Air India in our project to acquire 68 state-of-the-art aircraft from The Boeing Company," said Menon.
"Induction of these modern aircraft into our fleet will be a major step forward in making Air India a truly global airline through a significant expansion of our international network," he said.
"The fast-growing Indian market offers enormous opportunities for US exporters in many sectors including transportation, energy and infrastructure development," said Lambright.
"We're also pleased that India has taken advantage of the new benefits offered by its participation in the Cape Town Treaty," he added.
The Cape Town Treaty is an international treaty that facilitates the cross-border financing and leasing of aircraft, helicopters and aircraft engines.
Ex-Im Bank reduces its exposure fee by one-third on asset-backed financings of new US-manufactured large commercial aircraft and spare engines for international buyers located in countries that ratify and implement the treaty.
Ex-Im Bank's exposure fee is the risk premium that the bank charges for its export financing. As a result of ratifying and implementing the Cape Town Treaty, NACIL saved over $5 million on financing costs on this one transaction, the bank said.
Ex-Im Bank said it has identified India as a key market for its export financing. In April 2008, the bank established the Indian Infrastructure Facility to support US exports to Indian projects in sectors such as power and renewable-energy generation, oil and gas development, airport and seaport development, railway and urban transit, and health care.
The facility now includes nine Indian financial institutions and has a financing capacity of $2.45 billion.
In 2007, Ex-Im Bank concluded a $1.2 billion financing of Boeing aircraft for NACIL. Accordingly, the bank's aggregate exposure under the 2007 financing and the current financing is approximately $1.6 billion.
In fiscal year 2007, Ex-Im Bank authorised $12.6 billion in financing to support an estimated $16 billion of US exports worldwide. The bank authorised more than $1.4 billion last year to support US exports to India, including a $500 million loan guarantee to Reliance Petroleum Ltd. for the Jamnagar refinery.
Ex-Im Bank is the official export-credit agency of the US. The independent, self-sustaining federal agency, now in its 74th year, helps create and maintain US jobs by financing the sale of US exports, primarily to emerging markets throughout the world, by providing loan guarantees, export-credit insurance and direct loans.
--- IANS
