The Hindu Business Line : Package for cos investing overseas

(From right) Mr P.K. Dash, Chairman & Managing Director, ECGC; Mr T.C. Venkat Subramanian, Chairman & Managing Director, Exim Bank; and Mr Luis Dodero, Vice-President & General Counsel, MIGA, at a press conference in Mumbai on Wednesday. - - Shashi Ashiwal

Mumbai , Nov. 17

THE 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 for providing Indian companies investing overseas, a package of services that combines competitively-priced financing with risk mitigation.

The objective is to support the outward expansion of Indian companies, as they increasingly seek opportunities to invest overseas. Outbound foreign direct investment by Indian companies is at about $1 billion a year and growing, said Mr T.C. Venkat Subramanian, Chairman and Managing Director of Exim Bank, addressing a press conference here on Wednesday.

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 and co-insurance 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 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," said Mr Luis Dodero, Vice-President and General Counsel of MIGA.

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