What changed
Exim Bank signed a Line of Credit agreement with Mali on October 12, 2009, effective January 18, 2010, for USD 36 million. The credit finances goods, machinery, equipment, and services for the Mali-Ivory Coast power grid link. At least 85% of contract value must be sourced from India; the rest can be procured abroad.
What it means for you
Indian exporters can now access this LOC to supply to Mali's power project, with AD banks facilitating L/Cs and disbursements. Banks must ensure compliance with FEMA and RBI guidelines, including no agency commission from LOC proceeds. Exporters can use their own EEFC balances for commissions after full payment realization.
What you must do
- Inform exporter constituents about the LOC and direct them to Exim Bank for full details.
- Handle Letters of Credit and disbursements within 48 months (project exports) or 72 months (supply contracts) from contract completion or execution date.
- Ensure shipments are declared on GR/SDF forms as per RBI instructions.
- Allow remittance of agency commission only from exporter's own resources or EEFC after full contract value realization.
Who it affects
AD Category-I banks, Indian exporters to Mali, Exim Bank
What is the purpose of this Line of Credit?
It finances eligible Indian goods, machinery, equipment, and services for the Mali-Ivory Coast power grid interconnection project.
What are the sourcing requirements?
At least 85% of the contract price must be supplied from India; the remaining 15% can be procured from outside India, excluding consultancy services.
Can agency commission be paid under this LOC?
No agency commission is payable from LOC proceeds. Exporters may use their own resources or EEFC balances for commission after full payment realization.