What changed
RBI circular informs AD Category-I banks about Exim Bank's new Line of Credit agreement with Guinea, effective August 11, 2021. The LoC finances two solar projects: electricity and drinking water for 7 public universities (USD 14.40 mn) and electrification/refrigeration in 200 health facilities (USD 5.82 mn).
What it means for you
Indian exporters can now access this LoC for eligible goods and services, with at least 75% of contract value sourced from India. Banks must ensure no agency commission is paid from LoC proceeds; exporters may use own EEFC balances for commission after full export realization. The 60-month utilization period starts from project completion.
What you must do
- Inform exporter constituents about the LoC details and direct them to Exim Bank for complete terms.
- Ensure shipments under this LoC are declared in Export Declaration Form per RBI instructions.
- Verify that no agency commission is paid from LoC proceeds; allow remittance from exporter's own resources or EEFC only after full export value realization.
- Confirm that at least 75% of contract price goods/services are sourced from India.
Who it affects
AD Category-I banks, Indian exporters of solar equipment and related services, Exim Bank
What is the total value of this Line of Credit?
The LoC is for USD 20.22 million, split into two solar projects: USD 14.40 million for university solar and drinking water, and USD 5.82 million for health infrastructure electrification and refrigeration.
Can exporters pay agency commission under this LoC?
No agency commission is payable from LoC proceeds. Exporters may use their own resources or EEFC balances for commission in free foreign exchange, but only after full realization of the eligible export value.
What is the Indian content requirement for exports under this LoC?
At least 75% of the contract price must be supplied from India. The remaining 25% can be procured from outside India by the seller for the eligible contract.