Annual Report 2011 - 2012

14
Lines of Credit
Investment and Technology Promotion
Lines of Credit (LoCs) have become an essential component
and an effective tool of India's economic diplomacy strategy
in Africa, Asia and Latin America. These loans, offered on
concessional terms, enable the borrowing countries to secure
essential supplies and project credit for infrastructure
development and capacity building. LoCs have contributed
to the socio-economic development of the recipient countries,
while at the same time, generating considerable amount of
goodwill for India, helping to project India's strength in
various sectors and enabling Indian companies to get projectbased
and supply contracts in niche markets of the
developing world.
At the India-Africa Forum Summit in May 2011 at Addis
Ababa, the Prime Minister, Dr Manmohan Singh,
announced that India would extend Lines of Credit worth
US$ 5 billion over the next three years to support the
developmental requirements of India's African partners. He
also announced India's commitment to extend credit for
US$ 500 million to Myanmar during the visit of the President
of the Republic of the Union of Myanmar on 12-15 October,
2011. This will be for projects mutually decided in due course
by the two governments. The utilisation of the LoC of US$
1 billion announced in the previous year for the Government
of Bangladesh for various infrastructure projects including
railways, port connectivity, road sector, progressed during
the year.
In view of the increasing importance of LoCs as an instrument
of India's economic diplomacy in Africa, the ITP Division
organised a Conference, titled 'Indian Lines of Credit: An
instrument to Enhance India-Africa Partnership' on 22-23
November, 2011, in partnership with the Confederation of
Indian Industry (CII) and EXIM Bank of India, with the
objectives of making our economic engagement with Africa
more meaningful, briefing our African partners about the
LoC guidelines and procedures and taking a pro-active and
professional approach to fast-track the decision-making
process. The External Affairs Minister, Shri S M Krishna,
inaugurated the two-day Conference on 22 November, 2011.
This was the first such Conference, which brought together
foreign delegates, the Heads of African Missions in India
and Indian stakeholders on LoCs on a common platform
for consultations and discussions. Delegates from 40 African
countries participated in the Conference. Senior officers
132
from the Ministry of External Affairs, Department of
Economic Affairs and EXIM Bank of India interacted with
the African guests and delegates and dwelt on the operational
procedures of LoCs, the requirements of documentation
that would smoothen the processes of project appraisal,
approval, implementation and evaluation, and, the need for
following transparent procedures for the selection of project
suppliers under LoCs.
The Conference also provided an opportunity to project
the strengths of India in selected important sectors to the
delegates from Africa. In interactive sessions, Ministries/PSUs
made presentations to the delegates, projecting India's
technological advantages in sectors including power
generation and transmission, renewable energy, railways,
agriculture and information technology. On the second day
of the Conference, CII held a session for Indian business
entities with the African delegates.
During the year, 16 Lines of Credit amounting to US$ 614.2
million were approved to 14 countries under the India
Development & Economic Assistance Scheme (IDEAS).
These include: the LoC of US$ 67.2 million to Gabon for
upgradation of its broadcasting facilities; two LoCs of US$
15 million and US$ 13.1 million to Togo for rural
electrification and agricultural projects, respectively; US$ 70
million to Republic of Congo for rural electrification; US$
13 million to Mozambique for solar photovoltaic module
manufacturing; two LoCs of US$ 20 million and US$ 39.7
million to Central African Republic for limestone mining
and power generation, respectively; US$ 40.3 million to
Chad for various projects; US$ 35 million to Tanzania for
bio-diesel project; US$ 47 million to Ethiopia for
development of its sugar industry; US$ 50 million to Zambia
for setting up of pre-fabricated health posts; US$ 42 million
to Cameroon for cassava plantation project; US$ 37.9
million to Swaziland for an agricultural project; US$ 100
million to Mali for a power transmission project; US$ 5
million for Cuba for milk processing; and, US$ 19 million
for Guyana for a multi-specialty hospital.
During the year, ITP Division has carried forward its initiative
of supporting feasibility studies and evaluation studies related
to LoC proposals and projects by utilising the Consultancy
Fund of the Ministry and by channelising the sectoral expertise
of Indian entities, to supplement the resources of our
development partners.