Export-Import Bank of India (Exim Bank) has extended a line of credit of $20 million to the African state of Eritrea for financing eligible goods and services, machinery and equipment, including consultancy services from India, the Reserve Bank of India said in a release.
The funds would be used for financing multipurpose agricultural projects not exceeding $10 million - the proposed projects include artificial insemination development project, poultry waterer and feeder, establishment of milk collection centers, pressurised irrigation system (drip irrigation system), solar pumps project and soil survey and land evaluation equipment - and multipurpose educational projects not exceeding $10 million - which include purchase of teaching materials including books, laboratory/educational equipment, chemicals, computers etc for seven Eritrean institutions of higher education, including Eritrean Institute of Technology (EIT), CSH, CBE, COMSAT, OROTTA, HAC and CASS, in addition to the National Board of Higher Education - in Eritrea.
The goods and services, 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.
Out of the total credit by Exim Bank under this agreement, the goods and services, including consultancy services of the value of at least 85 per cent of the contract price, have to be supplied by a seller from India and the remaining 15 per cent goods and services (other than consultancy services) may be procured by the seller for the purpose of eligible contract from outside India.
The line of credit agreement is effective from 1 October 2009 and date of execution of agreement is 24 August 2009. Under the LOC, the last date for opening of letters of credit and disbursement will be 48 months from the scheduled completion date(s) of contract(s) in case of project exports and 72 months ( 23 August 2015) from the execution date of the credit agreement in case of supply contracts.
Shipments under the LOC will have to be declared on GR / SDF forms as per instructions issued by Reserve Bank from time to time.