India is our priority among emerging markets for financing: Canada’s EDC

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch/File Photo

Canada’s largest export credit agency Export Development Canada (EDC) considers India a priority among emerging markets, a top country executive told this portal.

“The Canadian government’s priority is India and China from a creativity perspective but in terms of financing, India is the priority among emerging markets,” Sandeep Bhatt, senior regional manager for Mumbai at EDC told DEALSTREETASIA.

EDC has been lending in India for the last 30 years and has been operating an office in Mumbai since 2005. The agency has already done 8-10 transactions in India this year.

Bhatt says the organization has 30-40 customers in India to whom it has lent. “If we take the calendar year, we have lent $1.3 billion in loan and our total book size is in the range of $3.5-4 billion,” he added.

EDC is a 100 per cent government-owned organisation and its mandate is to promote exports from Canada. It lends long-term loans to customers to enable them to buy goods and services from Canada.

Bhatt says that most of the credit agency’s growth in India has happened in the last four years and it has been growing more than 30 per cent per annum. “Now, from the last couple of years, we have been lending upwards of $1 billion per annum in India alone,” he said.

“Our strategy is to be a partner in a transaction. In a loan transaction, we like to have bank partners but nothing stops us from doing bilateral transactions as long as we have an adequate benchmark. Our preference is to always have a bank partner with whom we can do a joint transaction,” Bhatt said.

EDC expects to grow its book size to $10 billion in India by 2020. “That is the aspiration from the management but everything depends on the market conditions, transactions, support etc,” added Bhatt.

EDC mainly focuses on oil & gas and infrastructure sectors. It conforms to RBI guidelines on external commercial borrowing that restricts it from operating in certain sectors like real estate, financing and others. Most transactions in India have been refinancing transactions in the last three years.

Last year in India, EDC provided $2.32 billion in total, including $1.2 billion in financing, and it has served 441 customers including 190 SMEs. In the last five years from 2012-2016, it has served sectors like ICT, infrastructure, light manufacturing, resources, extractive and transportation, and provided a total of 10,015 CAD of financing.

Some of the significant Indian portfolio companies of EDC include Adani Global, Reliance Industries Ltd, Idea Cellular, Ultratech Cement, Kuantum Papers, Essenlife Biosciences, Bharat Petroleum, Indian Oil and Bhira Investments.

Also Read:

Exclusive: Canada’s export credit agency EDC extends $250m loan to Adani Global

Exclusive: Reliance Industries gets upto $75m loan from EDC