Export-Import Bank of India (Exim Bank India) has entered into an agreement with Nicaragua to provide a US$26.24 million credit line for exports of Indian goods and services.

Under the agreement, letters of credit (L/Cs) can be opened and disbursements made for Indian firms undertaking work in a programme to improve Nicaragua's power infrastructure.

Project financing

The financing from India is being arranged for the building of a new substation and 95 kilometres of transmission lines as well as the expansion of three existing substations.

Earlier this year, the governments of South Korea and India said they would extend more than US$35 million in loans to Nicaragua to strengthen and expand its electricity infrastructure.

Exim Bank Korea has already agreed a loan of US$25 million to be used for the construction of two new substations and the expansion of two existing substations.

Conditions

Of the total Exim Bank India credit, goods and services including consultancy services of the value of at least 75 per cent of the contract price must be supplied by the seller from India.

The remaining 25 per cent of goods and services, except for consultancy services, may be procured by the seller for the purpose of an eligible contract from outside India.

L/C timings

The credit line is effective now and the last date for opening of L/Cs is 48 months from the scheduled completion date of contract in the case of project exports and 24 March 2021 for other supply contracts.

Exim Bank India has entered into similar agreements with Nepal (DC World News, 22 May 2015), Rwanda (DC World News, 2 January 2014; Togo (DC World News, 5 November 2014); Niger (DC World News, 8 December 2014); Djibouti (13 July 2015) as well as Cuba and Myanmar (DC World News, 1 April 2015).

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