India topped project finance deals in 2009

SBI Caps heads global loan chart; power sector dominates. A study ranked India on
top in the global project finance market in 2009, ahead of Australia, Spain and
the US. The study, by Project Finance International (PFI), a source of global
project finance intelligence and a Thomson Reuters publication, said the main
market for project finance (PF) in 2009 was the domestic Indian market, which
raised $30 billion (Rs 1.38 lakh crore), accounting for 21.5 per cent of the
global project finance market. This was up from $19 billion in 2008.
THE BIG LEAGUE
Top banks in project financing
Lead manager Volume
SBI Capital 19,944.90
Calyon 7,359. 60
BNP Paribas 5,836.10
Societe Generale 4,283.70
Sumitomo Mistusi Fin 4,025.10
IDBI Bank 3,989.20
Source: Project Finance International
Figures in $ million

Also, for the first time, investment bank SBI Capital Markets, a subsidiary of
State Bank of India, topped the global loan chart, ahead of top French, British
and US banks. Three French banks followed: Calyon, BNP Paribas and Societe
Generale. “The global project finance market was propped up in 2009 by government-
linked projects such as social infrastructure and renewables and by the fact that
20 per cent of the market is in India, which surged to become the biggest and
busiest market last year, toppling Australia from the previous year’ top
position,” said PFI in its study. It was not only SBI Capital Markets which was
gaining attention in the loan market. Among other domestic loan arrangers, IDBI
Bank was ranked second, Infrastructure Development Finance Company (IDFC) was
ranked third and Axis Bank fourth in the Asia-Pacific region. “At IDFC, our focus
will be domestic markets only and given the size of opportunities in India, we
would still further grow our operations here,” said Vikram Limaye, executive
director at IDFC. Given the credit crunch and the fall of major banks in the West,
the global PF figures were not as robust as in the previous couple of years.
According to PFI data, globally, the PF loan figure stands at $139.2 billion in
2009 compared to the staggering $250 billion in 2008 and $220 billion in 2007.
Adding the figures for project bonds at $8.2 billion, down from $11.9 billion in
2008, the overall PF market volume stood at $147.4 billion. That was a drop of 44
per cent from 2008, but to put it in context, the overall global PF market stood
at $114.5 billion in 2004 and at $166 billion in 2005. SBI arranged 36 deals
amounting to $20 billion of debt – 35.2 per cent of the total volume for the Asia-
Pacific region. This included some major deals such as financing for the Sasan
ultra mega power project, projects of Adani Power and Sterlite Energy, and funds
for Vodafone and Unitech in the telecom sector. The power sector continued to
dominate lending and generated a record volume. More than $22.3-billion loans in
53 transactions in the sector were signed globally during the year, accounting for
almost 40 per cent of the entire PF market. Also, a major contribution came from
social infrastructure development schemes launched by the government recently. In
all, 224 financial institutions were ranked. Only lead arranger mandates are
credited for the league table, while participation in syndications is not
credited. Also, PFI tables do not include property or real estate sector
transactions. In addition, the PF tables do not include corporate loans and those
guaranteed by sponsors or governments.
Business Line

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