EXIM Bank is the foremost lending institution giving heft to India’s infrastructure diplomacy in South Asia region and globally. Established by the Government of India, under the Export-Import Bank of India Act, 1981, as a specialized export credit agency, the bank provides Lines of Credit or LOCs to overseas financial institutions, sovereign governments and other entities for developmental and infrastructure projects, equipment, goods and services from India, on deferred credit terms.
EXIM Bank’s Policy Business, done on behalf of Government of India, which facilitates project exports and supports development priorities in over 60 countries, constitutes 52% of its loan portfolio. Net loan assets as on March end was at Rs. 1,34,523 crore.
Of all the neighbouring countries, Bangladesh has emerged as the major partner with which India’s infrastructure development engagement has broadened both in terms of finance and nature of projects, according to N. Ramesh, Deputy Managing Director, EXIM Bank of India.
“Bangladesh, amongst South Asian countries, has the highest level of exposure. Around $7.9 billion (LOCs) is what we have today,” said Ramesh in an interaction with ET Infra.
In recent years, the focus has been on power generation and power transmission lines as well as development of a nuclear power plant where Russian entities are also engaged, said Ramesh.
“The biggest project that we have supported is in Bangladesh, that is the power plant, a joint venture of the Bangladeshi power generating company and NTPC. We are looking at adding huge capacity or generating capacity in Bangladesh and the financing is done by India,” said Ramesh.
The eastern neighbour is very important from a connectivity and strategic perspective, with India assisting in railway and port infrastructure as well.
The country’s ports gives a much shorter access to India’s Northeast states and EXIM Bank has been focused on funding the upgradation and development of key ports and their linkages with railways.
“There are very critical railway lines there, critical in terms of Bangladesh’s high density and higher requirement for hinterland transport from port to the cities. There we are playing a big part,” he said.
“These (railway) projects are largely covering Dhaka with the port cities. But they are also very important strategically in the sense that they are connecting either to Agartala or to the rest of the Indian mainland, so that the connectivity is established and is seamless,” said Ramesh.
Indian entities are set to undertake the upgradation of Mongla Port in Bangladesh, the second largest port in the neighbouring country, financed out of LOC extended by EXIM Bank.
“The most important aspect is there are at least three to four ports which are either getting decongested or expanded or there is a new facility which is being created, let’s say a container depot or an inland export zone or an Indian economic zone. On multiple fronts, the port-based economy is being given a thrust in Bangladesh,” he added.
