Financing & Insurance Solutions for Indian Companies
New Partnership Provides Package of Financing and Insurance Solutions for Indian Companies Investing Overseas
WASHINGTON, DC, November 17, 2004—Export-Import Bank of India (Exim Bank), Export Credit Guarantee Corporation of India Ltd. (ECGC) and the World Bank's Multilateral Investment Guarantee Agency (MIGA) have formed a partnership that will provide a package of services that combines competitively-priced financing with risk mitigation to Indian companies investing overseas.
The objective is to support the outward expansion by Indian companies, as they increasingly seek opportunities to invest overseas. Outbound foreign direct investment by Indian companies is about $1 billion a year and growing.
"By providing financing and risk mitigation tools, the partnership between MIGA, Exim Bank and ECGC would cater to the needs of the Indian enterprise and encourage them in venturing abroad with higher level of confidence", said Mr. T.C. Venkat Subramanian, Chairman & Managing Director of Exim Bank, during the launch of the partnership in Mumbai.
Under the new arrangement, Exim Bank will provide the needed financing, while ECGC and MIGA will provide insurance against the risks that are out of investors' control—such as currency inconvertibility and transfer restrictions; expropriation; war, terrorism and civil disturbance; and breach of contract.
MIGA and ECGC will work together largely through reinsurance/coinsurance arrangements. Investors can opt for either financing or insurance or the combined package of services. Additionally, investors can interact locally with ECGC while still benefiting from the World Bank's involvement.
MIGA's presence brings the World Bank umbrella of deterrence against host government actions that might affect project viability, says Luis Dodero, Vice President and General Counsel of MIGA. "MIGA's involvement can help protect investments, and in the event that disagreements do occur between investors and host governments, MIGA can mediate disputes and prevent claims from arising and disrupting projects." MIGA also brings unparalleled knowledge of country conditions and opportunities in developing countries, as well as international best practice in terms of environmental and social standards.
Investors will able to take advantage of all the benefits of partnership with the World Bank without having to interact directly with MIGA staff in Washington DC. Says Mr. P.K. Dash, Chairman-cum-Managing Director of ECGC, "The new arrangement will have a very strong impact on efficiency and turnaround time. Investors can, for example, work with a primary contact at ECGC who coordinates the process and eliminates duplication. Documentation for the non-commercial risk insurance aspect of the partnership has been standardized by MIGA and ECGC."
For more information go to:
Multilateral Investment Guarantee Agency (MIGA)
Export-Import Bank of India (Exim Bank)
Export Credit Guarantee Corporation of India (ECGC)
Contacts:
At MIGA, Audrey Liounis, aliounis@worldbank.org
At Exim Bank, S. R. Rao, Chief General Manager, eximcord@vsnl.com
At ECGC, Geetha Muralidhar, General Manager, geetha.muralidhar@ecgc.com