The Export-Import Bank of the US and NACIL, the holding company of national carrier Air India, have signed an agreement worth USD 1.1 billion to support financing of sale of Boeing airplanes to the Indian carrier.

The financing will support the sale of Boeing B777-200LRs and B777-300ERs to be operated by Air India and B737-800s to be operated by Air India Charters, the EXIM Bank said.

These purchases represent the third phase of Air India’s 68-aircraft fleet renewal plan. EXIM Bank had earlier approved USD 1.2 billion in 2007 and USD 548.8 million in 2008 to support the financing of NACIL’s purchases of Boeing aircraft.

At a ceremony held at EXIM Bank headquarters, the financing documents were signed by EXIM Bank Chairman and President Fred P Hochberg, NACIL Chairman and Managing Director Arvind Jadhav, and JPMorgan Chase & Co (New York) Head of Global Structured Trade Finance Astar Saleh. The Joint Secretary and Financial Adviser to the Civil Aviation Ministry, Bharat Bhusan was also present.

“This support has enabled Air India to raise finances for acquiring latest technology aircraft at competitive rates of interest compared to commercial financing,” Jadhav said.

The transaction represents the second partial conversions of two EXIM Bank preliminary commitments to final commitments.

The final commitments were approved by the Bank’s board in June 2009. The Bank is guaranteeing loans extended by JP Morgan Chase & Co, a statement said.

“The fast-growing Indian market continues to offer enormous opportunities for US exporters in many sectors, including transportation,” Hochberg said.

“Air India, as one of EXIM Bank’s largest customers, plays a major role in this very important trade relationship,” he said.

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