India’s Exim Bank extends LOCs worth $120 million to Rwanda

Sachin Manawaria | The Dollar Business The Export-Import Bank of India (Exim Bank) has extended Lines of Credit (LOC) of a total of $120.05 million to the Government of the Republic of Rwanda for financing irrigation projects in Rwanda. In a statement, the Reserve Bank of India said that the LOC will be used for financing export targeted modern irrigated agricultural projects worth $60.22 million, and extension for exports targeted modern irrigated agricultural projects worth $59.83 million.  The LOC will be used for sourcing of goods and services from India. Under the LOC, Exim Bank usually reimburses 100% of contract value to the Indian exporters, upfront upon shipment of goods. For the LOCs to Rwanda, the equipment and services including consultancy services for the projects must be from India and those which are eligible under India’s FTP (Foreign Trade Policy). Further, out of the total credit by the EXIM bank under the agreement with Rwanda, the goods and services including consultancy services should be supplied by Indian supplier to the tune of 75%. The Credit agreement between Exim Bank and the Government of Rwanda is effective from December 2, 2014, said RBI. Exim Bank has also entered into a similar LOC agreement with the Republic of Congo for making available $82 million for financing the completion of Ketende Hydro-electric project. The Exim Bank is planning to increase India’s project exports from the current $27 billion to around $50 billion in five years and the growing African region is a focus region for the Bank. Earlier this year, Exim Bank said that it will collaborate with the African Development Bank to set up Project Development Company (PDC) in Africa to identify and develop infrastructure projects in the region.  

This article was published on December 30, 2014.