India could face a dramatic change to its ship financing landscape with the Export-Import Bank of India planning to establish a Maritime Financing Facility (MFF) at the International Financial Services Centre (IFSC) in Ahmedabad, in association with commercial banks. The move is intended to get Indian shipping firms to go for special purpose vehicles (SPVs) when financing deals.
Yaduvendra Mathur, chairman and managing director of India’s Exim Bank told local media: “Instead of borrowing on the books of companies to build ships, ship-specific bonds can be floated. Actually, people will invest in ship-specific bonds. So, there will be an exposure of people only to a particular ship. These are innovative financing structures. We have been talking to a few merchant bankers on how the maritime activity can kick-start the whole economy,” explained Mathur.
Noting that only 5% of India’s trade is carried on India-made ships, the Exim boss said it was vital to make India’s shipbuilding industry stronger.