Exim Bank’s LOCs Spur
Africa’s Economic Growth
Prabhakar Dalai,

Chief General Manager, Exim Bank
The Export Import Bank of India (Exim Bank) is a premier export finance institution in the country and is engaged in promoting two-way trade and investment flows between India and its trading partners across the globe. Sound financial support structure is a sine qua non for promoting international trade and economic development.

The countries in the African continent have always been a focus region for Exim Bank, and thus a critical component of the Bank's strategy to promote and support two-way trade and investment. As a partner institution to promote economic development in Africa, the commitment towards building relationships with the African region is reflected in the various activities and programmes which Exim Bank of India has set in place.

Exim Bank, since its inception in 1982, has been extending Lines of Credit (LOCs) to foreign governments, overseas financial institutions, regional development banks and other overseas entities, to enable them to import Indian projects, technology, equipment, and services, on convenient credit terms. Exim Bank's LOC programme has gained considerable recognition in the recent years, in developing countries of Africa, Asia, Latin America and the CIS, as it enables the LOC recipient countries to import developmental and infrastructural projects, equipment, goods and services from India, on medium to long term credit terms. The LOC programme has also enabled India demonstrate project execution capabilities in the emerging markets.

Special Initiatives
To enhance bilateral trade and investment relations, Exim Bank of India has in place several Lines of Credit (LOCs) extended to a number of institutions/agencies in Africa. These LOCs supplement the "Focus Africa" programme of the Government of India. Exim Bank is also involved in the implementation of several promotional initiatives of Government of India for the African continent such as Team-9, India Development Initiative (IDI) and contribution toward NEPAD (New Partnership for Africa's Development). Government of India and the eight (8) countries in West Africa, viz. Governments of Burkina Faso, Chad, Cote d'lvoire, Equatorial Guinea, Ghana, Guinea Bissau, Mali and Senegal, have set up a regional cooperation mechanism called Techno-Economic Approach for Africa-India Movement, known as Team-9. Under the Team-9 initiative, the Government of India (GOI) provides LOCs through Exim Bank to Team-9 countries, to finance setting up of various projects by Indian companies in those countries. Also, GOI provides LOCs through Exim Bank, under the NEPAD (New Partnership for Africa's Development) initiative of Africa, to finance setting up various projects by Indian companies, across Africa. With a view, inter-alia, to promoting India's trade and economic relations with developing countries in particular, GOI has also launched the India Development Initiative (IDI).

Developmental Thrust in Africa
Many of the LOCs under the aforesaid programmes have been/ are being utilized for infrastructure development, industrial development, SME and agricultural development. Examples of the projects financed in Africa under Exim Bank's LOCs are given below:
• Angola - Railway Rehabilitation Project, irrigation project, and acquisition of Tractors from India;
• Burkina Faso - Agricultural projects including acquisition of tractors, harvesters, agricultural processing equipment;
• Chad - Setting up of cotton yarn plant, Steel billet plant and rolling mill, plant for assembly of agricultural equipment;
• Cote d'lvoire - Project for renewal of urban transport system in Abidjan and for agricultural projects;
• Congo DR - setting up a cement factory, urban transport system
• Ethiopia - Energy transmission and distribution project; Development of sugar industry;
• Ghana - Rural electrification, agriculture, communication and transportation projects;
• Mali - Rural electrification and setting up of agro machinery and tractor assembly plant; Electricity transmission and distribution project from Cote d'lvoire to Mali
• Mozambique - Gaza Electrification Project, irrigation project, and Agricultural projects
• Senegal - Development of rural SMEs and purchase of agricultural machinery and equipment from India, Irrigation project and Acquisition of railway coaches and locomotives from India;
• Sudan - Transmission and Sub-Station Project, Project for setting up Power Plant, Agricultural projects, Irrigation project and Acquisition of railway coaches and locomotives from India;

Africa Enjoys Lion's Share
LOCs help the overseas governments/ financial institutions in implementing their developmental projects in key sectors of economy like agriculture, industry, infrastructure, energy, telecom and transportation, using Indian technology and equipment. Currently, Exim Bank has in place 86 Lines of Credit, covering over 84 countries in Africa, Asia, Latin America, Europe and the CIS, with credit commitments amounting to US$ 2.8 billion.. Out of these, 50 LOCs amounting to over US$ 1.75 billion are to Africa covering more than 39 countries. Africa's share in Exim Bank's LOCs is the highest at 63%. This consists of US$ 862 million to Eastern Africa, US$ 699 mn to Western Africa, US$ 95 mn to Southern Africa, US$ 10 mn to Northern Africa and US$ 84 mn to Central Africa.

West Africa
Due to barriers such as distance from India and the fact that many of the West African countries speak French (and not English), trade and investment flow from India to West Africa was not up to its potential. Exim Bank's LOCs have helped overcome these constraints. The projects financed under Exim Bank's LOCs to West Africa cover a variety of sectors like agriculture, transportation, manufacturing (cement, sugar), energy (generation, transmission and rural electrification) and Infrastructure. For instance, in Senegal, Exim Bank has extended six Lines of Credit (LOCs) to Government of Senegal, aggregating US$ 87.95 million, for a variety of sectors such as urban transport, agriculture, development of rural SMEs, rail transport, social sector and IT , sector. In Mali, the projects financed under Exim Bank's LOCs to Mali cover a variety of '* sectors such as railway, rural electrification, and farm mechanization and for electricity transmission project from Cote d'lvoire to Mali. In Ghana, the projects financed under Exim Bank's LOCs to Ghana are designing and building project for Seat of Government and Presidency of Ghana, rural electrification, agriculture, communication and transportation. In ECOWAS, Exim Bank has also extended a Line of Credit (LOG) of USD 250 million to Ecowas Bank for Investment and Development (EBID), which covers 15 countries in West Africa, for financing projects in the public sector in the member countries of EBID, such as health and hygiene related infrastructure project, acquisition of bi-directional units of trains, fertilizer project, rural electrification extension project, and urban transport system.

Besides operating Lines of Credit (LOCs), Exim Bank extends its own commercial Lines of Credit (LOCs) to various financial institutions and other entities in Africa, such as to PTA Bank (Eastern and Southern African Trade and Development Bank, covering 17 countries in the eastern and southern African region), Banque Quest Africaine De Developpement (West African Development Bank, covering 8 countries in the west African region), East African Development Bank and Nigerian Exim Bank.

Exim Bank has been consciously forging a network of alliances and institutional linkages to help further economic co-operation with the Africa region. Exim Bank has taken up equity in African Exim Bank, West African Development Bank (BOAD), and Development Bank of Zambia.

Exim Bank’s LOCs help the overseas governments/ financial institutions in implementing their developmental projects in key sectors of economy like agriculture, industry, infrastructure, energy, telecom and transportation, using Indian technology and equipment promoting infrastructure development, facilitating private sector development in host countries, as also, in contributing towards capacity building in the Africa region.