The lines of credit (LOC) extended by Exim Bank to overseas governments has grown exponentially in the last 10 years with credit commitments aggregating $25.15 billion as on December 31, 2019.

The bank has signed 257 LOCs, covering 61 countries. Besides, 41 LOCs amounting to $5.5 billion are in the pipeline and the total commitment would rise to 298 LOCs worth $30.62 billion to 64 countries, said A Ajay Kumar, Joint Secretary (DPA-1), Ministry of External Affairs.

Currently, around 52 per cent and 41 per cent of the total LOC commitments are to Asia and Africa regions respectively. Africa is the largest recipient region in terms of the total number of LOCs extended. But value-wise, the Asian region is leading because of a few high-value LOCs to neighbouring countries, he said.

Kumar was speaking on the sidelines of a seminar on business opportunities in the government-supported Exim Bank’s lines of credit programme in Kochi.

The LOC programme has enabled India to demonstrate its project execution capabilities in emerging markets, especially in developing countries of Africa, Asia, Latin America and the CIS. The greater visibility and creation of long-term interests for India in the emerging markets has been made possible by LOCs extended by Exim Bank, he added.

According to Sudatta Mandal, Chief General Manager, Exim Bank, the LOCs have catalysed exports of various projects in diverse sectors such as agriculture, construction, road, railways and transportation, irrigation, energy generation, and rural electrification etc. The LOC enables buyers in developing countries to import developmental and infrastructure projects, equipment, goods and services from India on deferred credit terms.

LOCs are not just being used to finance localised civil projects, but also to finance projects with an enhanced focus on capability creation, he said, adding that it contributes to sustainable development, thereby demonstrating India’s project execution capabilities.

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