Export-Import Bank of India (Exim Bank) had entered into an agreement on October 27, 2015 with the Government of Zimbabwe for USD 87 million soft loan for financing renovation and up-gradation of Bulawayo Thermal Power Plant.
“Subsequently, Exim Bank has signed first Amendatory Dollar Credit Line Agreement with the Government of Zimbabwe on May 31, 2016 on account of the revision of the Guidelines on Lines of Credit extended by Government of India to various countries under its Indian Development and Economic Assistance Scheme (IDEAS) dated December 7, 2015,” RBI said.
Out of the total credit by Exim Bank under this Agreement, the goods and services including consultancy services of the value of at least 75 per cent of the contract price will be be supplied by the seller from India and the remaining 25 per cent may be procured from outside India.
The credit agreement under the LOC is effective from August 19, 2016, RBI said.
Under the LOC, last date for opening letters of credit disbursement is 60 months after the scheduled completion date of the project.
In a line of credit loan, interest is not usually charged on the credit that is unused. Also, the borrower can draw on the line of credit at any time.