What changed
Exim Bank signed a credit agreement with Benin on September 6, 2013, effective December 16, 2013, for a USD 42.61 million Line of Credit. The funds will finance water supply upgrades in 69 villages, requiring a Project Management Consultant for a Detailed Project Report. At least 75% of goods and services must be from India, with the balance from outside India.
What it means for you
Indian exporters can now tap this LOC for water supply projects in Benin, ensuring a minimum 75% Indian content. AD banks must facilitate shipments under GR/SDF forms and handle commission payments only after full contract value realization. The LOC supports India's export push in Africa.
What you must do
- Inform exporter clients about the LOC and its terms, including the 75% Indian content requirement.
- Ensure shipments under this LOC are declared on GR/SDF forms as per RBI instructions.
- Allow agency commission remittances only after full contract value realization, using exporter's own resources or EEFC balances.
- Direct exporters to Exim Bank for full LOC details.
Who it affects
AD Category-I banks, Indian exporters of goods, services, and consultancy, Exim Bank
What is the purpose of this Line of Credit?
It finances upgrading water supply schemes in 69 villages in Benin, including consultancy services.
What is the Indian content requirement?
At least 75% of the contract price must be supplied from India; the remaining 25% can be procured from outside India.
When is the last date for disbursement?
For project exports, 48 months from scheduled completion; for supply contracts, 72 months from the credit agreement execution date (September 5, 2019).