ANNOUNCEMENT 04 Apr 2019
India has extended a line of credit to Zimbabwe to renovate a thermal power plant.
NUMBER OF INTERVENTIONS
RBI/2019-20/119 A.P. (DIR Series) Circular No. 13
About the Lines of Credit - EXIM Bank of India
On 04 April 2019, the Indian Export-Import Bank of India, on behalf of the Government of India, has extended a Line of Credit (LoC) of USD 23 million to the Republic of Zimbabwe for financing the upgrading and renovation of the Bulawayo Thermal Power Plant at the revalidated/escalated project cost. India had earlier provided a Line of Credit of USD 87 million for the same purpose on 27 October 2015 (See related State Act). The loan is issued to promote exports of Indian goods to Zimbabwe as per the agreement.
The Agreement is effective from 26 November 2019 and has a terminal utilization period of 60 months from the scheduled completion date of the project.
Lines of Credit
The Export-Import Bank of India extends Lines of Credit on to overseas financial institutions, regional development banks, sovereign governments, and other overseas entities. These loans are made on deferred credit terms to enable buyers from these countries to import goods for developmental and infrastructure projects, and other types of equipment, goods, and services from India. This is done with the motive of supporting Indian exporters in new overseas markets by reducing the payment risk from such importers.
The GTA includes trade finance loans and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
Under the credit agreement for the Line of Credit signed on 26 November 2019, at least 75% of the contract price of goods and services associated with the above project must be sourced from India.