Export development Canada to float NBFC in India

Plans financing green-field projects

Export Development Canada, export credit agency of Government of Canada, plans to float a non-banking finance company (NBFC) in India to finance green-field infrastructure projects in the country.

 

Peter Nesbitt, regional vice president, Asia at EDC said EDCs interest to finance is infrastructure sector includes toll roads, airport and pipelines for gas and oil sector. Besides funding infrastructure, organization is also into project finance.

 

The agency is active in External Commercial Borrowings (ECB) market and has invested in five private equity funds including one floated by IDFC that pump money in infrastructure projects. 

 

It may rope in partners to float finance company in 2014. EDC had discussions with prospective partners, Nesbitt said. But, he declined to elaborate further on profile of companies except to say that there could be involvement of multilateral agency.

 

EDC has helped Canadian companies of all sectors do business in India since establishing a local market presence in 2005. With more than $1 trillion to be invested in infrastructure sectors (in 2012-17), India represents a market that Canada cannot afford to ignore. EDC’s business volume in India (lending and trade insurance) was $2.03 Canadian dollars at end of 2012.

 

According to EDC’s country review (India) despite the current bout of economic weakness, the mid-longer term growth trajectory is still fairly robust at 6% to 7%. 

 

While businessperson and corporate perceive risks in doing business in India, there is very low uptake for political risk insurance, a cover that EDC offers, Nesbitt said.

Indeed, over the next decade India’s workforce is expected to grow by about 2% annually, and this young work force will deliver a growth dividend, EDC country report said.