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Export Development Canada (EDC) is Canada’s official export credit agency, providing trade finance services to domestic exporters and foreign buyers. In 2003, EDC extended CAD 51.9 billion in trade finance and risk management services to finance or insure export sales and investments by 7,172 Canadian companies in 182 markets.
Indian buyers of Canadian goods and services can benefit from EDC’s various financial services. EDC’s credit insurance programs insure foreign receivables for Canadian exporters, enabling them to extend credit to Indian buyers of Canadian goods and services. EDC’s contract bonding and insurance programs support Canadian companies by providing bid bonds and performance bonds for projects in India. Through its political risk insurance, EDC can facilitate foreign direct investment by Canadian companies in foreign markets such as India. Under this program, EDC can insure investments by a Canadian company in a foreign market. For buyers of Canadian capital goods and services, EDC can consider providing competitive term loans through its medium- and long-term financing.
Since 1990, EDC has successfully concluded over $4 billion in financing and insurance support for Canadian goods and services sold to India, including a US$250 million transaction with Reliance Infocomm in 2004. This figure is expected to rise as the trade liberalization process in India continues and realization of trade opportunities between Canada and India increase.
EDC has a healthy appetite for new transactions in India and has designated India as a premium market. It has identified several sectors where it expects to play the greatest role in providing financing and insurance support to Canadian companies. These sectors are: telecom, power, advanced technology and machineries, agri-food, oil and gas, railway transportation, environment, forestry, highways, metals and minerals, aerospace and infrastructure (airports and ports). EDC is actively considering many transactions of various sizes in these sectors.
Summary of Key Strategies
India represents one of the greatest trade opportunities for Canada. EDC’s key objective for this market is to lead and assist Canadian exporters in taking advantage of the vast opportunities.
EDC’s current business strategies include:
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Develop new business through matchmaking between Indian buyers and Canadian suppliers
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Develop new risk structures to make EDC financing more accessible
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Increase EDC’s presence in India to develop new transactions and facilitate existing ones
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Build awareness among Indian buyers of world class Canadian expertise and EDC financing
Line of Credit with Power Finance Corporation
EDC signed a US$75 million LOC agreement with the Power Finance Corporation (PFC) which will be a very useful source of financing for the buyers of Canadian goods and services in the power sector in India. The LOC makes accessing EDC financing faster, particularly for small power projects and projects with the State Electricity Boards. EDC could also consider large projects for direct lending.
Line of Credit with Indian Railway Finance Corporation
EDC also has a line of credit with Indian Railway Finance Corporation to finance Canadian supplies to the railway sector.
One off Transactions
EDC could also consider transactions on one off basis in other sectors. Buyers of Canadian goods and services can communicate directly with EDC on these transactions. With increased focus of Canadian exporters on India and awareness of Canada’s world class expertise in the above fields on the part of Indian buyers, EDC is bullish about Canadian prospects in India and hopes to achieve even greater success in the year 2005.
For more information on the range of EDC services applicable to the Indian market, please contact Luc Dupont, Regional Manager, China and Asia at
ldupont@edc.ca; Anis Karim, Regional Manager, Asia Pacific at
akarim@edc.ca; or Peter Nesbitt, Regional Manager, Asia at
pnesbitt@edc.ca.
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