EX-IM BANK SIGNS MOU TO PROMOTE CLEAN POWER PROJECTS IN INDIA
Export-Import Bank of the United States (Ex-Im Bank) Chairman James A. Harmon today signed two Memoranda of Understanding pledging cooperation on the financing of power projects beneficial to both India and the United States through participation in the India Energy Partnership Program (IEPP), a project of the United States Energy Association (USEA) and the U.S. Agency for International Development (USAID). Ex-Im Bank expects that up to $500 million in new transactions could be financed as a result of the initiative.
Indian buyers and US exporters of clean energy technologies are looking for new sources of financing for power projects that will contribute to economic and job growth in both countries while protecting the environment, Harmon said.
Harmon and Dr. Uddesh Kohli, chairman and managing director of the Power Finance Corporation of India, entered a Memorandum of Understanding to study the establishment of an information sharing partnership that would lead to the identification and financing of appropriate power projects. Eligible projects may include air and water quality measuring and monitoring, emission and effluent control, waste disposal, refuse collection, waste water treatment, environmental assessments, ecological monitoring and renewable energy. Ex-Im Bank would work with potential suppliers, borrowers and lenders to expedite applications for Ex-Im Bank financing.
Ex-Im Bank and the USEA entered a second complementary Memorandum of Understanding with the United States Energy Association to place the proposed partnership program under the auspices of the IEPP. The IEPP would facilitate the transfer of information between Ex-Im Bank and PFC and organize seminars, visits, and exchanges to further the partnership.
Ex-Im Bank provides enhanced financing support for US environmental exports through its export credit insurance, loan and guarantee programs:
Environmental export credit insurance enables small business exporters to offer Indian buyers attractive open account credit on terms of up to 180 days, as well as protecting exporters against loss with 95% commercial coverage and 100% political coverage, and providing other enhancements.
Under Ex-Im Bank's loan, guarantee and medium-term insurance programs, exporters are offered the maximum allowable repayment terms under international guidelines, capitalization of interest during construction of a project, and local cost coverage equal to 15% of the US contract price.
Transactions initiated under the program would be offered the most favorable terms permitted under the Organization for Economic Cooperation and Development (OECD) guidelines and Ex-Im Bank's Environmental Export Program.
Ex-Im Bank has taken the lead in gaining cooperation among export credit agencies on common environmental guidelines for evaluating projects. In 1999, Ex-Im Bank successfully negotiated an agreement among members of the OECD Export Credit Group that encourages export credit agencies to share environmental information voluntarily on a case-by-case basis for large, multi-source projects in environmentally sensitive sectors.
Ex-Im Bank is an independent US government agency that helps finance the sale of US exports primarily to emerging markets throughout the world, by providing loans, guarantees, and insurance. Worldwide in fiscal year 1999, Ex-Im Bank supported nearly $17 billion in exports.