Lok Sabha Question No. 4075 (UNSTARRED), answered on 2015-12-23
Subject: Line of Credit
Ministry: EXTERNAL AFFAIRS
Asked by: GAJENDRA SINGH SHEKHAWAT, P.P. CHAUDHARY

4075.

## GOVERNMENT OF INDIA MINISTRY OF EXTERNAL AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO.4075 TO BE ANSWERED ON 23.12.2015

## LINE OF CREDIT

SHRI GAJENDRA SINGH SHEKHAWAT: SHRI P. P. CHAUDHARY:

Will the Minister of EXTERNAL AFFAIRS be pleased to state:

- (a)    whether  the  Government  is  satisfied  with  the  progress  of  projects being undertaken in foreign nations under the extension of Lines of credit by India over the past three years and if so, the details thereof;
- (b)   if not, the reasons and remedial measures taken/being taken therefor;
- (c)   whether  there  have  been  delays,  cost  escalations  or  allegations  of corruption  in  the  implementation  of  such  projects  and  if  so,  the details thereof and remedial measures that are being undertaken in this regard, country-wise;
- (d)   whether the Government has taken cognizance of the fact that a few Indian  companies  are  getting  majority  of  the  projects  from  foreign nations under such lines of credit;
- (e)   if so, the facts in the matter; and
- (f)    the percentage of lines of credit per country that have been disbursed as against the amount  committed  in  Bilateral and Multilateral meetings  and  the steps undertaken  to disburse the remaining amounts?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF EXTERNAL AFFAIRS

[GEN. (DR) V. K. SINGH (RETD)]

- (a) Yes,  the  Government  of  India  is  reasonably  satisfied  with  the progress in implementation of Lines of Credit supported by India in foreign nations over the past 3 years. [Note: The Line of Credit is not a grant but a 'soft loan' provided on concessional interest rates to developing countries, which has to be repaid by the borrowing government.  The LOCs also helps to promote exports of Indian goods and services, as 75% of the value of

the  contract  must  be  sourced  from  India.  The  projects  under  LOCs  are spread over different sectors (Agriculture, Infrastructure, Telecom, Railway, Transmission/Power, Renewable Energy etc.)] (b) & (c) The actual implementation of LOC projects in various countries  is  dependent  on  local  factors,  such  as  prevailing  political  & social  conditions,  statutory  clearances  by  the  borrowing  Governments, making available land and other infrastructural support.  In many cases, the  borrowing  governments  may  not  wish  to  proceed  with  the  LOC  or change  the purpose or are unable to provide detailed information regarding the project through a proper Detailed Project Report / Feasibility Study. The Government has approved the new Indian Development Assistance  Scheme  (IDEAS)  in  December  2015.    The  scheme  includes provisions  to  provide  better  terms  of  credit,  which  will  be  attractive  to many  developing  countries,  who  are  now  seeking  alternative  means  of finance.  Several changes have been made in the operational guidelines such as making a DPR, or Feasibility Study essential for project proposals, strengthening of monitoring system, pre-qualification of competent companies and requirement of regular reports by the borrowing governments. In addition, regular monitoring is also being carried out by borrowing Governments, Project Management Consultants (PMCs), implementing agency and Indian Missions abroad to ensure projects are executed in a timely manner. These changes should improve the implementation of projects undertaken through these LOCs. (d) & (e) It  is  true  that  in  past  some  Indian  companies  had  been awarded  a  majority  of  the  projects  under  Lines  of  Credit,  based  on requests  received  from  borrowing  governments.  However,  several  LOC projects  have  also  been  executed  by  a  variety  of  other  companies, especially  public  sector  organisations  like  RITES,  IRCON,  WAPCOS  etc. PMCs/Contractors are selected by the borrowing Government through an open  competitive  bidding  process,  as  per  the  procurement  laws  of  the borrowing country and prescribed LOC Guidelines of Government of India. Only Indian Companies/firms can bid for executing the LOC projects. The percentage and amount of credit disbursed per country so far, as against the amount committed in Bilateral and Multilateral meetings is enclosed at Annexure.  The disbursements for each LOC are linked to the

- (f) progress and completion of project milestones.

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## Amount committed and disbursed to countries under Line of Credit by India

|   S No. | Country                  | Amount of Credit committed (in USD mn)   | Disbursements until 30 Nov, 2015 by Exim Bank (in USD mn)   | %of disbursement under the LOC   |
|---------|--------------------------|------------------------------------------|-------------------------------------------------------------|----------------------------------|
|       1 | Angola                   | 85.00                                    | 79.35                                                       | 93%                              |
|       2 | Benin                    | 72.61                                    | 30.77                                                       | 42%                              |
|       3 | Burkina Faso             | 261.50                                   | 49.94                                                       | 19%                              |
|       4 | Burundi                  | 84.39                                    | 25.53                                                       | 30%                              |
|       5 | Cameroon                 | 79.65                                    | 37.21                                                       | 47%                              |
|       6 | Cape Verde               | 5.00                                     | -                                                           | 0%                               |
|       7 | Central African Republic | 89.19                                    | 41.77                                                       | 47%                              |
|       8 | Chad                     | 108.40                                   | 61.08                                                       | 56%                              |
|       9 | Comoros                  | 41.60                                    | 7.80                                                        | 19%                              |
|      10 | Cote d'Ivoire            | 136.30                                   | 60.36                                                       | 44%                              |
|      11 | D.R.Congo                | 494.94                                   | 235.90                                                      | 48%                              |
|      12 | Djibouti                 | 49.13                                    | 32.79                                                       | 67%                              |
|      13 | Eritrea                  | 20.00                                    | 19.95                                                       | 100%                             |
|      14 | Ethiopia                 | 1,004.54                                 | 558.03                                                      | 56%                              |
|      15 | Gabon                    | 81.69                                    | 4.35                                                        | 5%                               |
|      16 | Gambia                   | 170.58                                   | 32.48                                                       | 19%                              |
|      17 | Ghana                    | 393.26                                   | 169.99                                                      | 43%                              |
|      18 | Guinea Bissau            | 25.00                                    | 9.96                                                        | 40%                              |
|      19 | Guinea                   | 35.00                                    | -                                                           | 0%                               |
|      20 | Kenya                    | 161.60                                   | 28.58                                                       | 18%                              |
|      21 | Lesotho                  | 9.70                                     | 8.69                                                        | 90%                              |
|      22 | Liberia                  | 144.00                                   | 0.81                                                        | 1%                               |
|      23 | Madagascar               | 25.00                                    | 25.00                                                       | 100%                             |
|      24 | Malawi                   | 156.50                                   | 155.18                                                      | 99%                              |
|      25 | Mali                     | 253.00                                   | 152.39                                                      | 60%                              |
|      26 | Mali &Senegal            | 27.70                                    | 27.67                                                       | 100%                             |
|      27 | Mauritania               | 87.48                                    | 6.77                                                        | 8%                               |
|      28 | Mauritius                | 812.50                                   | 72.70                                                       | 9%                               |
|      29 | Mozambique               | 639.44                                   | 192.45                                                      | 30%                              |
|      30 | Niger                    | 96.54                                    | 40.75                                                       | 42%                              |
|      31 | Nigeria                  | 100.00                                   | -                                                           | 0%                               |
|      32 | R. Congo                 | 214.90                                   | 55.00                                                       | 26%                              |
|      33 | Rwanda                   | 200.05                                   | 79.87                                                       | 40%                              |
|      34 | Senegal                  | 288.28                                   | 130.68                                                      | 45%                              |
|      35 | Seychelles               | 28.00                                    | 3.95                                                        | 14%                              |
|      36 | Sierra Leone             | 90.00                                    | 43.90                                                       | 49%                              |

Annexure

|   37 | Sudan        | 737.07   | 592.21   | 80%   |
|------|--------------|----------|----------|-------|
|   38 | Swaziland    | 57.90    | 45.99    | 79%   |
|   39 | Tanzania     | 523.04   | 140.58   | 27%   |
|   40 | Togo         | 110.10   | 24.78    | 23%   |
|   41 | West Africa  | 500.00   | 242.55   | 49%   |
|   42 | Zambia       | 89.03    | 75.22    | 84%   |
|   43 | Zimbabwe     | 115.60   | 11.98    | 10%   |
|   44 | Afghanistan  | 50.00    | -        | 0%    |
|   45 | Bangladesh   | 2,862.00 | 222.35   | 8%    |
|   46 | Cambodia     | 102.12   | 49.79    | 49%   |
|   47 | Iran         | 200.00   | 85.79    | 43%   |
|   48 | Lao PDR      | 153.83   | 86.30    | 56%   |
|   49 | Maldives     | 80.00    | 14.36    | 18%   |
|   50 | Mongolia     | 20.00    | -        | 0%    |
|   51 | Myanmar      | 747.59   | 248.18   | 33%   |
|   52 | Nepal        | 1,350.00 | 71.52    | 5%    |
|   53 | Sri Lanka    | 1,734.16 | 1,001.57 | 58%   |
|   54 | Syria        | 225.00   | 87.52    | 39%   |
|   55 | Vietnam      | 191.50   | 70.53    | 37%   |
|   56 | Belarus      | 55.60    | 55.57    | 100%  |
|   57 | Cuba         | 12.76    | -        | 0%    |
|   58 | Guyana       | 94.10    | 28.38    | 30%   |
|   59 | Honduras     | 56.50    | 26.63    | 47%   |
|   60 | Jamaica      | 7.50     | 7.50     | 100%  |
|   61 | Nicaragua    | 67.53    | 3.00     | 4%    |
|   62 | Panama       | 10.00    | -        | 0%    |
|   63 | Suriname     | 47.05    | 46.49    | 99%   |
|   64 | Fiji Islands | 125.78   | 48.50    | 39%   |

Note: There is usually  a  time  lag  between  the  commitment  to  a  LOC  and  actual  disbursement  to begin,  which  happens  only  after  the  preparation  of  Feasibility  Report/Detailed  Project  Report, finalization of contracts etc. Subsequent disbursement is linked to the progress in the implementation of the project.  Since a number  of  LOC  projects  are  long-gestation  infrastructure projects, disbursements usually take place over a period of several years.

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