Export-Import Bank of India (Exim Bank) has extended a line of credit (LOC) of $72.55 million to exports of eligible goods and services to Lao People's Democratic Republic (Lao PDR).
The line of credit will finance eligible goods and services, including consultancy services from India, for the 230 KV double circuit transmission line from Nabon to Thabok and substations ($34.68 million) and Nam Boun 2 hydropower projects (15 MW) ($37.86 million) in Lao PDR.
Exim signed the agreement for export credit with the government of Lao PDR on 13 September 2010.
Goods and services, including consultancy services from India coming under the foreign trade policy of the Government of India, are eligible for financing by the Exim Bank as per the agreement, the Reserve Bank of India (RBI) said in a release.
To be eligible for the Exim credit, the goods and services, including consultancy services, of the value of at least 75 per cent of the contract price should be supplied by the seller from India, while the remaining 25 per cent goods and services (other than consultancy services) may be procured by the seller for the purpose of eligible contracts from outside India.
The credit agreement is effective from 2 November 2010 and the date of execution of agreement is 13 September 2010. Under the line of credit, the last date for opening of letters of credit and disbursement will be 48 months from the scheduled completion date of contract in the case of project exports and 72 months (12 September 2016) from the execution date of the credit agreement in the case of supply contracts.
Shipments under the line of credit will have to be declared on GR/SDF forms as per instructions issued by the Reserve Bank from time to time.
No agency commission is payable under the Exim credit line. However, if required, the exporter may use his own resources or utilise balances in his exchange earners' foreign currency account for payment of commission in free foreign exchange. Authorised banks may allow such remittance after realisation of full payment of contract value subject to compliance with the prevailing instructions for payment of agency commission, RBI said in its release.