Cabinet approves finance scheme for infra projects abroad

Source: PIB, Government of India

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval to a scheme to enable EXIM Bank to offer concessional finance to support Indian companies bidding for strategically important infrastructure projects abroad. This will help Indian companies to bid for large projects abroad. The repayment of the loan would be guaranteed by the foreign government. The strategic importance of a project, to deserve financing under this scheme, will be decided, on a case by case basis, by a committee chaired by Secretary (DEA) and will have members from the Department of Expenditure, Ministry of External Affairs, Department of Industrial Promotion and Policy, Department of Commerce, Department of Financial Services and Ministry of Home Affairs. The Deputy National Security Adviser will also be a member of this Committee. The committee will have powers on conditions within reasonable limits, on a case by case basis, during the first two years of implementation of the scheme. The projects financed under these terms will be monitored by the committee. The committee will also consider financing strategic projects through public sector banks other than EXIM Bank on the same terms. The committee may insist on sourcing of at least 75% of the project requirements from India, if it is found compatible with the requests for bids. The experience with this scheme will be evaluated after two years.  Background: There are a number of Indian large project implementation companies which have developed a lot of expertise in building large infrastructure projects. However, they have not been able to win contracts abroad due to higher cost of finance in India. It is felt necessary to help such Indian companies/entities secure contracts abroad, if it is in India’s strategic interest to have the projects implemented by Indian companies.  

September 16, 2015 | 5:14pm IST.