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Exim Bank: A Partner In Africa’s Development

The countries in the African Continent have always been a focus region for Export-Import Bank of India (Exim Bank of India), 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 of India has representative offices in Johannesburg, South Africa and Dakar, Senegal, which play a key role in facilitating economic cooperation with the African region, and is closely associated with several of the Bank’s initiatives. The representative offices interfaces with institutions such as Industrial Development Corporation of South Africa Ltd., African Development Bank, regional financial institutions such as Eastern and Southern African Trade and Development Bank (PTA Bank), Afrexim Bank, and West African Development Bank (BOAD) as well as Indian missions in the region.

Promoting Infrastructure Development & Capacity Building in Host Countries

Exim Bank of India plays a pivotal role in promoting and financing Indian companies in execution of projects. Such projects, primarily in the infrastructure sector, contribute to local and regional development. Towards this end, the Bank extends funded and non-funded facilities for overseas industrial turnkey projects, civil construction contracts, supplies as well as technical and consultancy service contracts. In the Africa region, Indian companies have implemented numerous projects in Africa, spanning various sectors, with such support from Exim Bank of India. These projects, in turn, facilitate and support infrastructure development in host countries, thereby contributing to the overall development process in the region. Such projects include: Turnkey contract for Gas Based Power Project in Tanzania funded by World Bank; Transmission System Rehabilitation and Maintenance Project in Zambia; Turnkey contract for Multi-Product Pipeline Project in Sudan; Consultancy assignment in Small Town water supply project in Nigeria; Supplies for Urban Power Rehabilitation Project in Uganda; Transmission Line Projects in Algeria, Tunisia; Construction of Cyber Towers in Mauritius.

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. Currently, 51 LOCs are in operation amounting over US$ 1.7 bn covering more than 30 countries in the African region. These LOCs facilitate import of project-related equipments and services from India on deferred credit terms. At the same time, many of these LOCs are earmarked for infrastructure and related projects.

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

Finance for Joint Ventures Overseas

Further, Exim Bank of India supports Indian companies in their endeavour to globalise their operations, through joint ventures (JVs) and wholly owned subsidiaries (WOS). Such support includes loans and guarantees, equity finance and in select cases direct participation in equity along with Indian promoter to set up such ventures overseas. In the African region, the Bank has supported several such ventures in countries such as South Africa, Kenya, Mauritius, Nigeria, Zambia, Morocco, Uganda and Tanzania. These ventures serves to promote value addition, as also contribute to capacity building and capacity creation in host countries.

Association with African Development Bank

India is a member of African Development Bank (AfDB), and many Indian companies participate in projects funded by African Development Bank Group. Exim Bank works closely with African Development Bank and has an active programme which offers a range of information, advisory and support services to Indian companies to enable more effective participation in projects funded by Multilateral Funding Agencies such as African Development Bank. Exim Bank assists Indian companies in projects supported by African Development Bank by not only fund and non-fund based assistance, but also by providing advance alerts on upcoming opportunities. With support from Exim Bank, Indian project exporters have secured a number of overseas contracts in Africa in sectors such as power, telecommunications, transport, water supply & sanitation. Exim Bank and African Development Bank have signed an agreement for co-financing projects in Africa. The agreement envisages joint financing of projects (priority being given to support projects of small and medium enterprises) in regional member countries of AfDB. Exim Bank also organizes in various centres in India, Business Opportunities seminars in Projects funded by African Development Bank.

Supporting Private Sector Development

Exim Bank of India has tie-ups with institutions such as the International Finance Corporation (IFC), the PTA Bank, to facilitate provision of consultancy support services in African countries. To date, over 50 assignments have been supported by Exim Bank under the arrangements with IFC and PTA Bank spanning various sectors in countries including Botswana, Lesotho, Namibia, Mozambique, Kenya, Tanzania, Angola, Madagascar, Zambia, Nigeria and Ghana. These assignments facilitate development of private sector small and medium enterprises in host countries in the African region.

Partner in Institutional Building in Africa

As a partner institution in promoting economic development in Africa, Exim Bank of India shares its experience in the setting up of institutional infrastructure for international trade. In this regard, the Bank has actively participated in the institutional building process in a number of countries in Africa. Besides being associated in the setting up of the Afrexim Bank, the Bank has been involved in the design and implementation of Export Finance Programmes of Industrial Development Corporation, South Africa; Consultancy Assignment for the Government of Mauritius on ‘Projecting Mauritius as an investment hub for Indian Firms’; establishment of Export Credit Guarantee Company in Zimbabwe; and preparing a blue print for setting up of Export-Import Bank of Zimbabwe.

Exim Bank of India has taken the initiative for the setting up of Global Procurement Consultants Ltd. (GPCL), in partnership with leading consultancy firms in India, for providing procurement related services particularly in the case of multilateral agencies such as World Bank and African Development Bank. GPCL has undertaken a number of assignments in many countries in Africa including Tanzania, Swaziland, Sudan, Nigeria, Uganda, Malawi, and Mozambique.

Institutional Linkages

Exim Bank of India has been consciously forging a network of alliances and institutional linkages to help further economic co-operation with the Africa region. Towards this end, Exim Bank has taken up equity in Afrexim Bank, West African Development Bank (BOAD), and Development Bank of Zambia. These endeavours are supplemented by the various Memoranda of Cooperation (MOCs)/ Memoranda of Understanding (MOUs) the Bank has in place with key institutions in the African region including: African Development Bank (AfDB); Eastern and Southern African Trade and Development Bank (PTA Bank); Afrexim Bank; Nigerian Export-Import Bank (NEXIM); Banque Internationale Arabe de Tunisie, Tunisia; Board of Investment of Mauritius; Industrial Development Bank of Sudan; Industrial Development Corporation of South Africa Limited (IDC); Foreign Investment Promotion Agency, Tunisia; Societe Tunisienne de Banque, Tunis.

Member of Association of African Development Finance Institutions

Exim Bank of India is a member of the African Development Finance Institutions (AADFI), a forum of institutions / banks with the objective of creating co-ordination and economic solidarity among the development finance institutions in the African continent. The membership of AADFI helps provides a platform for building linkages with other institutions in Africa, which are members of AADFI.

Knowledge Building and Technology Transfer

In the area of knowledge building and technology transfer, Exim Bank of India’s research studies have focused on potential areas for boosting India’s trade and investment relations with the Southern African Customs Union (SACU) member countries, Southern African Development Community (SADC) member countries, members of the Common Market for Eastern and Southern Africa (COMESA), West African Countries, as also the member countries of Maghreb region. Further, Exim Bank of India’s bilingual (English and French) magazine titled “Indo-African Business” focuses on bilateral trade and investment between India and Africa, and addresses the business information needs of companies who are interested in trade with the African region.

India-Africa Project Partnership Conclaves

Exim Bank of India has been a key partner in the conclaves on India-Africa Project Partnerships, which seek to create platforms for decision makers from African countries and relevant multilateral, regional and national funding agencies to meet, in one place, the entire range of Indian companies involved in engineering consultancy, turnkey projects, construction and supply of project goods among others.

In Sum

In sum, Exim Bank of India, with its comprehensive range of financing, advisory and support services, seeks to create an enabling environment for enhancing two-way flow of trade, investment and technology between India and the African region, while also promoting infrastructure development, facilitating private sector development in host countries, also in contributing towards institutional building in the Africa region.