Exim Bank extends $100 Mn Line of Credit to Sri Lanka for Solar Energy Projects

New Delhi, Sept 30 (KNN) The Export-Import Bank of India (Exim Bank) has entered into an agreement with Sri Lanka for making available a Line of Credit (LoC) of USD 100 million for the purpose of financing projects in the Solar Energy Sector.

The Line of Credit, being supported by Govt of India, will be primarily used for financing exports of goods and services under the Foreign Trade Policy for Solar Energy projects.

According to the official communique issued by Reserve Bank of India, “Out of the total credit by Exim Bank under the agreement, goods, works and 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 of goods and services may be procured by the seller for the purpose of the eligible contract from outside India”.

The agreement does allow a flexibility to reduce Indian content not exceeding 10% with requisite approvals but forbids agency commission payable for export under the LoC. However, it provides for payment by the exporter ‘using his own resources or utilize balances in his Exchange Earners’ Foreign Currency Account for payment of commission in free foreign exchange’.

The Agreement under the LoC becomes effective from September 13, 2021. Under the LoC, the terminal utilization period is 60 months from the scheduled completion date of specified in the eligible contract.

Shipments under the LoC shall be declared in Export Declaration Form as per instructions issued by the Reserve Bank from time to time.