MUMBAI: Export-Import Bank of India (Exim Bank) is for the first time funding an animation film project. It has agreed to lend $7 million to Crest Animation Studios Ltd.

While $5 million will be to fund Crest Animation's Indian outfit, Exim Bank is willing to sanction another $2 million in the US subsidiary company, RichCrest Animation.

In August 2005, Crest Animation, through its US arm RichCrest Animation, and the independent studio, Lions Gate Entertainment, had signed a deal worth around $70m for the co-production of three animated feature films. It was decided that both companies will have a 50:50 equity in the project, expected to pan out over five years.

"This will be our first financing for an animation movie project. We have agreed to fund Crest Animation Studios as well as its wholly owned subsidiary company in the US. Crest has tied up with Lions Gate Entertainment which is a leading distributor in the world. Besides, the company has a completion bond in place," Exim Bank general manager Mathew John tells Indiantelevision.com.

Of the three movie projects with Lions Gate Entertainment, the first to kick off is Sylvester and the Magic Pebble which is based on the Caldecott medal-winning story by William Steig, the creator of the blockbuster Shrek. The pre-production work on the movie is near completion, and the production plan is as per schedule for 2008 release.

"Our funding to Crest will be for the first movie," says John.

Crest is looking at a mix of debt and equity to fund the film projects. Crest's contribution for these three projects would be around $30 million.

Exim Bank has been funding Hindi movie projects which have a potential to earn foreign currency revenues in the overseas market. It has financed nine movies so far to the tune of Rs 580 million. This includes Rs 400 million to noted filmmaker Yash Chopra for movies like Veer Zaara, Hum Tum, Bunty Aur Babli and Dum.

"We have also lent Rs 100 million for Don and Rs 80 million for Mangal Pandey - The Rising," says John.