India has extended additional Line of Credit (LOC) to the Government of the United Republic of Tanzania, of USD 268.35 million for financing the extension of Lake Victoria pipeline to Tabora, Igunga and Nzega in Tanzania.
The loan has been routed through Export-Import Bank of India (Exim Bank).
The line of credit agreement was signed in New Delhi on Friday, June 19, in the presence of Prime Minister of India Narendra Modi and the President of Tanzania, Jakaya Kikwete.
This is the fourth LOC extended by Exim Bank to Tanzania at the behest of the Government of India.
The first LOC of USD 40 million was extended, for financing supply of tractors, pumps and equipment to Tanzania. The second LOC of USD 36.56 million was extended, for financing the purchase of vehicles. The third LOC of USD 178.125 million was extended for financing augmentation of water supply schemes of Dar es Salaam and Chalinze regions in Tanzania.
Tanzania is bordered by Kenya and Uganda to the north, Rwanda, Burundi, and the Democratic Republic of the Congo to the west, and Zambia, Malawi, and Mozambique to the south. The main items that India exports to Tanzania are Petroleum products, pharmaceutical products, transport equipment, machinery & instruments, manmade yarn fabrics made ups, manufactures of metals, primary & semi-finished iron & steel and plastic & linoleum products.
The main items that India imports from Tanzania are Cashew nuts followed by pulses, metal ferrous ores & metal scrap, wood & wood products, pearls, precious & semiprecious stones, spices and dyeing, tanning & colouring materials.
With the signing of this LOC Agreement, Exim Bank has now in place 198 Lines of Credit, covering 63 countries in Africa, Asia, Latin America, Europe, Oceania and the CIS, with credit commitments of over USD 12.10 billion, available for financing exports from India.
Under the LOCs, Exim Bank will reimburse 100% of contract value to the Indian exporters, upfront upon the shipment of equipment and goods/ provision of services. 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.
Export-Import Bank of India (Exim Bank) has, further extended Buyer’s Credit under National Export Insurance Account (NEIA) of USD 29.61 million to the Ministry of Finance, Government of the United Republic of Tanzania to finance the supply of 777 Vehicles from India along with spares and Training in operation and maintenance to the Department of Police Force, Ministry of Home Affairs, Government of the United Republic of Tanzania.
The Buyer’s Credit (under NEIA) Agreement to this effect was signed in New Delhi on Friday, June 19, 2015, along with the LOC agreement. The Bank has till date sanctioned an aggregate amount of USD 2.33 billion for 19 projects valued USD 3.75 billion under the BC-NEIA.