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India could be Ex-Im bank’s largest portfolio in next 12-18 months

According to reports, the US Ex-Im has the mandate to double the country’s exports in five years and also create jobs, focusing on small and medium enterprises (SMEs). Promoting SMEs has hardly been on the radar of US policy-makers in an economy with thriving multinational companies. But Mr Hochberg has taken the mandate quite seriously.

The US economy is still weighed down by a huge debt burden that led to the recent downgrade of its sovereign debt by ratings firm S&P. With the world’s largest economy in turmoil, Mr Hochberg has his task cut out. From Ex-Im’s perspective, India offers a vast opportunity for investments, especially in infrastructure that would need over $1 trillion between 2012 and 2017. “India could be our largest portfolio in next 12-18 months,” says Hochberg.

Mr Hochberg is keen on shedding Ex-Im’s image as a financier of Boeing aircraft. Of its $5-billion India portfolio, a large chunk of exposure is in aviation.

That is changing, with its exposure gradually rising to other infrastructure segments such as renewable energy. India could emerge as Ex-Im’s largest portfolio for power and infrastructure sectors as well. Solar power is also one of Ex-Im’s priorities: India is targeting 20,000 mw in solar power by 2022. That would translate into a funding requirement of close to $32 billion. “We have no set limits for each country. I am quite optimistic about the role of renewable energy where our portfolio is $80 billion globally,” he says.

Moreover, US Congress is also reviewing the new cap on its portfolio. “I would be delighted if all the needs of the Jawaharlal Nehru National Solar Mission were filled by US companies,” he says. Ex-Im is working with American solar companies to help them obtain competitive financing.

The recent US sovereign downgrade is unlikely to impact funding support from the US government as rating agencies have suggested spending cuts in areas such as pensions payouts, not in institutions that support job creation.

Its India exposure, which stands at $5.6 billion, is the largest portfolio in Asia and the second-largest globally. “We have $500 million in the pipeline for solar and renewable energy. We’ll be taking to the board a gasfired power plant project for Reliance Power, offering $625 million. That makes it over billion dollars total,” Mr Hochberg says.

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