EIB To Give 50 M Euro Credit To Rabo Finance

Mumbai, January 27: | Updated: Jan 28 2003, 05:30am hrs
European Investment Bank (EIB) has agreed to extend credit to the tune of Euro 50 million to Rabo India Finance (Rabo). The credit will be a mix of a credit line and a loan. Rabo will have a part of the fund parked with itself for smaller deals whereas when the deal size is significant enough the company will use the credit line facility.

EIB is currently undeergoing a due diligence of Rabos operations in order to ascess the credit worthiness of the institution and get an idea of the its operations with Indo-European ventures as the credit is for providing financial assistance to Indian companies and projects involving joint venture and technology transfer from Europe.

Rabo -- the Indian subsidiary of the Netherlands based Rabobank International -- will recieve the loan at 10 basis points over London Inter Bank Offer Rate (LIBOR) at present however that is open to a change depending upon the cost of funs of EIB. There is a cap of 40 bps over LIBOR for the borrowing.

The process is expected to be complete in the a few months. The Euro 50 million is also not a fixed amount and can be extended if a good opportunity for an investment arises.

This global loan would be the first such assistance to India after gap of 10 years and first ever to private sector entity in India as well.

EIB, having a multi-facted agreement with India, has extended Euro 55 million credit facility to Powergrid Corporation in 1993. EIB manager (India, China) Philipe Szymczak said the bank looks forward to developing partnership with bank and corporates in India.

EIB, European Unions long term financing arm has lendable resources worth Euro 1.4 billion.