Mumbai: DEG, German state-run lender KfW’s development finance unit, is contemplating on increasing its India portfolio to 900 million euros ($1.07 billion) in the next few years, Reuters reported. The Germany-based firm is confident about India’s growth outlook and relatively stable macroeconomic backdrop.
The news agency reported that the data available till 2024 showed that KfW has a balance sheet size of 550 billion euros, while DEG has a portfolio worth 12 billion euros. The latter does business in Asia, Africa, Latin America and parts of Eastern and Central Europe.
“India is one of the top-three investment destinations for DEG,” Kunal Makkar, DEG director–India, told Reuters in an interview. Makkar informed India accounts for about 5% of DEG’s global portfolio and the financial institution is planning to increase it to 7 per cent in 3-4 years.
DEG’s confidence in India’s growth outlook
It may be noted that India and the European Union signed the Free Trade Agreement (FTA) on January 27. Makkar said that the trade pact and India’s stable inflation and growth forecast, DEG sees scope for widening its India investments.
Makkar said DEG plans lend to Indian companies tapping the offshore or dollar bond market. The financial institution has plans to tap into Indian firms which are engaged in financial institutions, primarily non-banking financial companies, infrastructure, renewable energy, manufacturing and agriculture.
DEG recently made its first India debt fund investment as it backed Vivriti Asset Management’s asset-backed securitisation fund in GIFT City.