Exim Bank to lend $27.5 mn soft loan to Senegal

Export-Import Bank of India (Exim Bank) has entered into an agreement with Senegal for extending a $27.5 million soft loan to finance exports and consultancy services for a rural electrification project in the African nation.

The Line of Credit (LoC) is effective from August 24 this year and the date of execution of the agreement is April 21, the Reserve Bank said in a statement.

"Exim Bank has concluded an agreement dated April 21, 2011, with the government of Senegal, making available to the latter a LoC of $27.50 million for financing eligible goods, services, machinery and equipment, including consultancy services from India, for the purpose of financing a rural electrification project in Senegal," it said.

Out of the total credit provided under this agreement, at least 75% of the goods and services, including consultancy services, have to be sourced from India.

With an aim to monitor the end-use of soft loan assistance by the Exim Bank to other countries, the Finance Ministry had last week said that all such projects will be monitored twice a year by a special committee.

The bank provides a LoC under the Indian Development and Economic Assistance Scheme to poor, low and medium income countries.

During 2010-11, 22 LoCs worth a combined $2.38 billion were extended by the Exim Bank to support the export of projects, goods and services from India.

As of March, 2011, the Bank has in place 138 LoCs covering 72 countries in Africa, Asia, the CIS, Europe and Latin America, with credit commitments aggregating to $6.66 billion.

Source: Business Standard