The Export-Import Bank of the US has justified extending a $1.3-billion loan guarantee support to Air India, stating that the airline has been a “good customer” of the bank.
The bank's Chairman, Mr Fred Hochberg, said the bank had been supporting Air India for many years and it was also a customer of Boeing. “We understand that airlines are going through a difficult period,” he told media persons here on Friday.
The Air Transport Association of America had sued the bank in November last year over the Air India deal. The bank's support to Air India was to help the carrier purchase Boeing's Dreamliner aircraft.
Mr Hochberg said the bank had also financed Jet Airways and Spice Jet in India, but did not quantify the total commitment.
“Globally, we support 56 airlines,” he said.
He said India is likely to emerge as the largest destination for the bank in the next 12 to 18 months. The official export credit agency of the US Gfederal government ranks India second, next only to Mexico, in credit commitments. “The Exim Bank has committed $7 billion to India, while it is $8.5 billion for Mexico and at the rate India is growing it could be the single largest market for us in 12 to 18 months,” he said.
Mr Hochberg, who is currently on a tour in South India, met the Andhra Pradesh Chief Minister, Mr Kiran Kumar Reddy, and the State Major Industries Minister, Ms J. Geeta Reddy, apart from industry leaders.
He said the bank's focus in India will be on sectors such as energy, transportation and education. The power sector accounts for nearly 30 per cent of the bank's $7 billion commitment in Indian projects.
The bank is also exploring the opportunities in solar and wind energy, oil and gas. Medical devices and equipment and agriculture have been identified as some of the newer areas for funding.
The bank has financed $176 million for solar projects in Rajasthan and Gujarat in the last year.
“In fact, we are financing more solar projects in India than in any other country,” he pointed out.