New Delhi, Nov 1 (KNN) The Export Import Bank of India (Exim Bank) has extended USD 216.44 million in three lines of credit (LoC) to Mozambique, for financing eligible goods, services, machinery and equipment including consultancy services from India for the purpose of financing for rehabilitation and building infrastructure in the African country.

The funds are provided for three different projects in Mozambique - construction of 1200 houses; rural drinking project extension; and rehabilitation of road between Tica, Buzi and Nova Sofala.

The latest round of funding includes a USD 19.72 million credit for extending a rural drinking water project, USD 149.72 million for a road rehabilitation project and USD 47 million to construct houses, the Reserve Bank of India (RBI) said.

“The goods, services, machinery and equipment including consultancy services from India for exports under this Agreement are those which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this Agreement,” RBI said in a circular.

Out of the total credit by Exim Bank under this Agreement, the goods and services including consultancy services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India and the remaining 25 per cent goods and services may be procured by the seller for the purpose of eligible contract from outside India, the circular added.

The LOC Agreements to this effect were signed in Maputo, Mozambique, on July-4 by Executive Director, David Rasquinha on behalf of Exim Bank and Minister of Finance, Manuel Chang on behalf of the Government of Mozambique.

Minister of State for External Affairs, Preneet Kaur, Deputy Minister of Foreign Affairs and Cooperation, Government of Mozambique, Eduardo Koloma were also present at the event.

With the signing of the above three LOC Agreements aggregating USD 216.44 million, Exim Bank, till date, has extended twelve Lines of Credit to Mozambique, at the behest of the Government of India, taking the total value of LOCs extended to USD 639.44 million.

The LOCs have supported export of items like electricity equipment, water drilling machinery equipment, agro-inputs and drip irrigation, vegetable oil refining plant and machinery and oil storage tank, transfer of water drilling technology and associated equipment, enhancing productivity of rice-wheat-maize cultivation, rural electrification projects and a Solar Photo Voltaic Module Manufacturing Plant in Mozambique. 

Under the LoCs, Exim Bank reimburses 100 per cent of contract value to domestic exporter, upfront upon the shipment of goods or provision of the services.
The first LoC of USD 20 million was extended to Mozambique in September 2004.

Exim Bank has now in place 172 Lines of Credit, covering 75 countries in Africa, Asia, Latin America, Europe, Oceania and the CIS, with credit commitments of over USD 9.11 billion, available for financing exports from India. Exim Bank's LOCs afford a risk-free, non-recourse export financing option to Indian exporters. Besides promoting India's exports, Exim Bank's LOCs enable demonstration of Indian expertise and project execution capabilities in emerging markets.  (KNN/SD)