Export Import Bank of India (Exim Bank) is confident of setting up a project advisory company (PAC) in Africa this year, its Executive Director David Rasquinha has said.
The PAC will essentially look to bring infrastructure projects in Africa to a bankable stage and facilitate exports from India to Africa.
Opportunities for infrastructure development in Africa are huge with a World Bank study projecting the annual investment requirement in infrastructure at $90 billion.
As much as two-thirds of this annual requirement will be for fresh investments and the rest for maintenance
“Opportunities are huge. But you need somebody to make the opportunity into a bankable project. That is what the PAC will do,” Rasquinha said.
This is the first time ever Exim Bank is setting up a PAC and also the first time in Africa, Rasquinha told Business Line here.
This PAC will be a joint venture with IL&FS and is likely to be headquartered in one of the African countries.
Talks are also on with the African Development Bank to participate in the joint venture as an equity partner. State Bank of India has also agreed to put a small equity, he said.
“We are keen Africa Development Bank is part of this venture and are waiting for them to join us. This would add to the credibility of the venture and provide assurance to the African governments,” he said.
Rasquinha said Exim Bank was quite confident of this venture bringing returns to equity investors in the first year itself.
Based on the success from the African venture, Exim Bank may even look at taking the same concept to East Asia as well.
PRIORITIES 2014-15
For Exim Bank, the three main priorities for fiscal 2014-15 will be boosting Indian project exports, fund-raising and structured finance.
Efforts will be taken to boost Indian projects primarily in Africa and also other parts of the world.
On fund-raising, the effort would be to build the dollar side of the balance sheet at economic rates, he said, adding that the US Fed taper is bound to affect Exim Bank’s cost of funds.