The Export-Import Bank of the United States (Ex-Im Bank) and the Indian Renewable Energy Development Agency (IREDA) have signed a $1 billion memorandum of understanding (MOU) aimed at financing the sale of US clean energy exports to India.
Ex-Im Bank Chairman Fred P. Hochberg and IREDA Chairman K.S. Popli signed the deal on Tuesday. Hochberg is visiting India this week to promote US-made exports in support of US jobs.
“The availability of Ex-Im Bank financing could translate into support for skilled jobs in the US renewable energy sector while contributing to the Indian government’s recently-announced goal of providing 24-hour electricity to India’s 1.3 billion citizens by 2019, much of it set to come from renewable sources,” Ex-Im Bank said in a statement.
Ex-Im Bank has authorized $353.4 million for US renewable energy exports to India since 2009, and Ex-Im Bank was one of the top financiers of projects under the National Solar Mission Phase 1.
“When quality, reliable US goods and services are brought to bear in high-demand markets like India, the benefits are felt in both of our countries,” said Hochberg. “This memorandum of understanding will reinforce the strong ties that America and India already share, create good-paying jobs on both of our shores, and further invigorate America’s clean energy industry while equipping India to meet its own ambitious energy goals.”
After signing the agreement, Hochberg travelled to Noida, India, to attend the India-US Technology Summit. Speaking at the event, Hochberg highlighted the renewable energy MOU as evidence of the mutual benefits that can be realized by buying US goods.
India ranks as the second-largest destination for US exports supported by Ex-Im Bank financing, and claims more than $7.2 billion of the Bank’s credit exposure through 2014. Over the last five years, Ex-Im Bank has authorized an average of $1.4 billion per year to finance US exports to India.
The MOU may be a positive step in the resolution of ongoing trade tensions between the US and India. Last year the US requested World Trade Organization (WTO) dispute settlement consultations with the Indian government regarding India’s solar photovoltaic domestic content requirements.
In September, the WTO set up a dispute settlement panel to examine the complaint after consultations proved unsuccessful. The panel includes Brazil, Canada, China, the European Union, Japan, South Korea, Malaysia, Norway, Russia, Turkey, Ecuador, Saudi Arabia and Taiwan.
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