In a bid to support Indian companies' growing investments in East Africa, the Export and Import (EXIM) Bank of India will open an office in Ethiopia next month, officials said.
Ethiopia's Minister of Finance and Development Sufian Ahmed and EXIM bank officials are expected to sign the agreement Tuesday, which will further boost ties between India and East Africa.
The bank and the Ethiopian ministry have been in negotiations for the last couple of months about the opening of the East African office in Addis Ababa.
The bank will open its office in a month, Indian embassy officials told IANS.
It will be the third office of EXIM bank in Africa. The bank has offices in Johannesburg and Dakar, responsible respectively for southern and western Africa.
In Ethiopia, EXIM has so far been active in disbursing loans for the construction of the Tendaho sugar factory and the expansion of two existing sugar factories.
The Indian government has accepted Ethiopia's project proposal and offered a $640 million soft loan through EXIM bank for two expansion projects at the Fincha and Wonji sugar factories and to construct the giant new factory at Tendaho in Afar Regional State.
This is the largest single line of credit India has extended to a foreign country.
EXIM bank was appointed to execute the loan disbursement for Ethiopia in October 2007.
It is an Indian government-owned financial institution based in Mumbai and managed by a board with representatives from the government, Reserve Bank of India, Export Credit Guarantee Corporation of India (ECGC), a financial institution, public sector banks, and the business community.
The bank's functions are segmented into several operating groups that include the Corporate Banking Group, which handles a variety of financing programmes for Export Oriented Units (EOUs), importers, and overseas investment by Indian companies; and Project Finance/Trade Finance Group that handles the entire range of export credit services such as supplier's credit, pre-shipment credit, buyer's credit, finance for export of projects and consultancy services, and guarantees.
The Indian government launched the institution not just to enhance exports from India but to integrate the country's foreign trade and investment with the overall economic growth.
Since its inception, the Exim Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment.