Finance For Overseas Project Execution
We are active in arranging finance for Project export activities. Project export contracts are generally of high value and exporters undertaking them are required to offer competitive terms to be able to secure orders from foreign buyers in the face of stiff international competition. The type of work includes:
- Export of engineering goods on deferred payment terms
- Execution of turnkey projects abroad
- Execution of overseas civil construction contracts abroad
- Exports of services are the contracts for export of consultancy, technical and other services.
Various types of credit facilities, both non fund and fund based, that the project exporters may need at the time of bidding and/ or for execution of the project are arranged by us.
The Policy gives greater priority for projects in Infrastructure, Power, Oil Exploration, Telecom, Railways, Roads & Bridges, Ports, Industrial Parks and Urban Infrastructure and Export Sectors.
Banks makes or guaranties a loan to a project company, and in underwriting this type of transaction, Banks are relying mainly on the overseas project for repayment of the loan. Banks carefully analyzes the economic, technical, marketing, and financial soundness of the project to determine its creditworthiness.
There must be adequate cash flow to pay all operational costs and to service all debt. It is expected that collateral, in the host country, will be provided to secure the loan. The project sponsors are expected to support the overseas operation until certain specific tests for physical completion, operational implementation, and financial soundness are met. To the extent that project financing is appropriate, sponsors may not need to pledge their own general credit beyond required completion undertakings.