1. Buyer’s Credit under NEIA
Exim Bank’s
Lines of Credit and
Buyer’s Credit under NEIA
Harare, Zimbabwe
March 12, 2014

2. Exim Bank of India SET UP BY AN ACT OF PARLIAMENT IN SEPTEMBER 1981
WHOLLY OWNED BY GOVERNMENT OF INDIA
COMMENCED OPERATIONS IN MARCH 1982
APEX FINANCIAL INSTITUTION
OBJECTIVES:
“… for providing financial assistance to exporters and importers, and for functioning as the principal financial institution for coordinating the working of institutions engaged in financing export and import of goods and services with a view to promoting the country’s international trade…”
“… shall act on business principles with due regard to public interest”
(Export-Import Bank of India Act, 1981)

3. Evolving Vision Comprehensive Range of Products And Services
Product Centric Approach
“To develop commercially viable relationships with a target set of externally oriented companies by offering them a comprehensive range of products and services, aimed at enhancing their internationalisation efforts”
Export
Credits
Export Capability
Creation
Comprehensive Range of
Products And Services
– All Stages of the Export Business Cycle –
Customer Centric Approach
Exim Bank TODAY
Leadership and Expertise in India’s Export Finance

4. Management Board of Directors (16)* OFFICES Appointed by
Domestic Offices: 10
Ahmedabad
Bangalore
Chandigarh
Chennai
Guwahati
Hyderabad
Kolkata
New Delhi
Mumbai
Pune
Chairman and Managing Director
5 Directors: Government of India
3 Directors: Scheduled Banks
2 Directors : Professionals/Experts
1 Director nominated by RBI
1 Director nominated by IDBI
1 Director nominated by ECGC
Overseas Offices:8
Addis Ababa
Dakar
Dubai
Johannesburg
London
Singapore
Washington D.C.
Yangon
Appointed by
Govt. of India
* As per Exim Bank Act

5. Operational Philosophy
International Trade
Financing
Promoting
Facilitating
Through
Variety of Financing Programmes
Value Added Business Advisory Services
Research and Analysis
Catalyst for Financing
Projects
Products
Services

6. Range of Products & Services
At All Stages of Export Business Cycle
Value Based Services to Exporters
INFORMATION
Advisory
Services
Knowledge
Building
SUPPLEMENTS FINANCING PROGRAMMES
Export Marketing
Export Marketing
Pre- Shipment
Export Production
Post- Shipment
Export Product Development
Investment Abroad
Import Finance
Advisory Services
FINANCING, FACILITATING INDIA’S TWO WAY TRADE & INVESTMENT

7. Financing Programmes Financing Program (Various Currencies)
Export Credit
Medium / Long Term
Lines of Credit
Buyer’s Credit
Supplier’s Credit
Short Term
Pre / Post Shipment Credit
Import Credit
Import Loan for capital goods
Bulk Import Loan for Raw Materials
Loans for Exporting Units
Term Loans for expansion/ diversification / new projects/ export product development/ export marketing / research & development
Term Loans for overseas equity investment
Direct equity stake in Indian/ Overseas ventures of exporting companies

8. Lines of Credit

9. Lines of Credit Programme
Lines of Credit (LOCs)
Exim’s own LOCs to economically strong developing countries and regional development banks
At behest of GOI, concessional LOCs to developing countries in Asia/ Africa/ Latin America/ CIS and Oceania with a long-term perspective. While Exim raises the resources and funds disbursement, GOI guarantee and provide interest equalisation support under Indian Development and Economic Assistance Scheme (IDEAS)
Status of LOCs
No. of LOCs operative : 187
No. of countries covered : 75
Total amount of LOCs sanctioned : US$ billion

10. Lines of Credit Programme
A Catalyst for Trade Promotion
Enables import of Indian equipment and technology on deferred credit terms
Direct exposure on overseas borrowers
No recourse to Indian exporters
Exporters get payment on shipment
Particularly relevant for small and medium (SME) sector
Eligible items – all items permissible under Exim Policy
Project related Supplies & Services
Industrial Products & Consumer Durables
Commodities

11. Exim Bank’s LOCs Broad Terms
Advance Payment : 10% of FOB/CFR/CIF value
Credit offered : 90% of FOB/CFR/CIF value
Credit Period :
5 years for capital and engineering goods
2 years for industrial manufactures and consumer durables
1 year for commodities
Availability period : 36 months for opening L/c
42 months for disbursement

12. GOI-LOCs routed through Exim Bank Broad Terms
Credit offered : 100% of FOB/CFR/CIF /CIP value
Credit Period : 8-20 years (inclusive of moratorium of 2-5 years)
Availability period : 48 months from the scheduled completion date for project exports
72 months from the execution of the Credit Agreement for supply contracts

13. Origination of LOC Proposal – GOI LOCs

14. Origination of LOC Proposal – Exim LOCs

15. Lines of Credit– Signing

16. Lines of Credit– Making LOC Agreement effective

17. Guidelines for Bidding and Procurement Procedures
The Borrower shall adopt a transparent procedure based on competitive bidding for awarding the Eligible Contract to Indian Seller.
The Borrower may conduct competitive bidding procedures in accordance with prevailing procurement laws, rules and regulations of the Borrower’s country to ensure that the award of the Eligible Contract to the Seller is made in a fair and transparent manner; the rules and regulations of the borrowing country relating to competitive bidding should be clearly defined and details of which should be provided to Exim Bank in advance.
The Borrower shall award the Eligible Contract to the Seller based on competitive bidding process. The bidding shall be restricted to Indian companies registered in India and/or incorporated/established under any law in force in India.

18. Guidelines for Bidding and Procurement Procedures
The Borrower shall express the bid price only in Dollar (US$)
The Borrower shall widely publicise the tender inviting bids for the Eligible Contract through Websites or any other suitable media in Borrower’s country and India, including websites of the Exim Bank and Industry associations in India.

19. Lines of Credit– Contract Approval
Competitive bidding process is mandatory.
Government of LOC-recipient country is expected to conduct fair and transparent selection with wide participation of Indian companies.

20. OPENING OF A LETTER OF CREDIT (L/C)
Relationship Management Application [RMA] needs to be established between L/C Issuing Bank in Borrower’s country with Exim Bank (SWIFT: EIBIINBB).
Pursuant to establishment of RMA, at the instance of the Borrower Government a Letter of Credit [L/C] covering the contract may be opened in favour of the Indian exporter stipulating Exim Bank as the advising and negotiating bank.

21. OPENING OF A LETTER OF CREDIT (L/C)
L/C will be issued by a Bank in Borrower’s Country in favour of Indian Supplier/Exporter, filling up relevant fields of the L/C as per the terms of Contract and LOC Agreement .
For speedy implementation of the contract, LC needs to be settled mutually between the Importer and the Indian exporter in consultation with Exim Bank, prior to the issuance of the LC.
Exim Bank will act as Negotiating Bank. Indian Supplier/Exporter will submit negotiable documents to Exim Bank, either directly or through its banker.
Exim Bank makes disbursements to Indian Supplier/Exporter, once the credit compliant documents are negotiated, and debits the LOC account of the Borrower Government.

22. Lines of Credit– Disbursements and Repayments
Disbursements are linked to the progress of execution of the contract.

23. Wide Range of Projects Financed: Examples
PROJECTS/SECTORS FINANCED
LOC RECIPIENT COUNTRIES
Agricultural Projects :
Burkina Faso, Cameroon, Chad, Cote d’Ivoire, Gambia, Ghana, Madagascar, Mali, Senegal, Sierra Leone, Sudan, Tanzania
Construction Projects
Gabon, Gambia, Ghana
Irrigation
Lesotho, Malawi, Mozambique, Senegal
Power Generation
D.R. Congo, Equatorial Guinea, Ethiopia, Mali, Mozambique, Niger, Sudan
Power Transmission & Distribution, Rural Electrification
Burkina Faso, Ghana, Mali, Mozambique, Senegal
Railway Rehabilitation
Angola, Benin, Ghana, Mali, Senegal
Road Transportation
Central African Republic, Cote d’Ivoire, Ghana, Niger, Senegal
Technology (Parks & Training)
Cote d’Ivoire, D.R. Congo, Mozambique, Senegal
Sugar Industry Rehabilitation
Ethiopia, Sudan 23 23

24. Buyer’s Credit under NEIA

25. Buyer’s Credit under NEIA
Exim Bank has, in conjunction with ECGC, introduced a new product viz. Buyer’s Credit under Government of India’s National Export Insurance Account (NEIA).
The NEIA is a Trust, set up by Ministry of Commerce and Industry, Government of India, for providing export credit insurance cover and is administered by ECGC.
Under the Buyer’s Credit, the Bank finances project exports from India by extending credit facility to overseas sovereign governments and government owned entities on deferred credit terms, without recourse to the Indian exporter.

26. Buyer’s Credit under NEIA: Broad Terms
Eligible Buyer
Sovereign governments and government owned entities overseas
Eligible exporters
Exporters with satisfactory past track record and sound financials are eligible for financing under the programme.
Eligible Goods
Project exports from India
Quantum of Credit
Generally, not more than 85% of the contract value
Rate of Interest
The current rates are as follows:
(i) LIBOR % p.a. for tenor < 8 years.
(ii) LIBOR % p.a. for tenor of 9 to 12 years
(iii) LIBOR % p.a. for tenor of 13 to 15 years
Premium on NEIA cover
Comprehensive Risk Cover Policy, indicative premium (payable upfront) at approx. 6% (lump sum) for the principal component and at 1% p.a. (6% lump sum - if paid upfront) for the interest component, to be borne by seller / buyer, as may be agreed.
Repayment
Credit period would normally be 8 to 15 years. Longer credit period could be considered in deserving cases
Security
Sovereign guarantee from Ministry of Finance of the Borrowing Country
Any other security, on case-to-case basis.

27. Buyer’s Credit under NEIA: Approval Process Overseas Project Authority
(8) Signing of Commercial Contract & Buyer’s Credit Agreement
Overseas Project Authority
Indian Exporter
EXIM BANK
(1) Approaches for Buyer’s Credit and Terms
(2) Due Diligence
(3) Seeks In-principle approval for cover and premium rates
(6) For proposals exceeding USD 20 mn, approval is sought
(5) On receipt of LoI/award of
contract, internal approval by Exim
Obtained.
(7) Approval accorded for BC-NEIA
(4) Conveys In-principle approval and premium
Working Group:
Exim Bank, RBI, ECGC, Sponsoring Bank
ECGC - NEIA

28. Buyer’s Credit under NEIA: Approval Process
(1) Supplies goods / provides services
Indian Exporter
Overseas Project Authority
(2) Submits shipping documents and Claims disbursement under payment authorization /LC
(4) Funds Transfer
(3) Exim Bank will negotiate documents under Letter of Credit or payment will be made to exporter against Payment Authorisations
EXIM BANK
(5) Advises Project Authority about disbursement and debit his Buyer’s Credit a/c with Exim Bank

29. ECGC’s Positive List of Countries under NEIASN
Country 1
Afghanistan 17
Kenya 32
Nigeria 2
Algeria 18
Kuwait 33
Republic of Congo 3
Bangladesh 19
Latvia 34
Romania 4
Barbados 20
Liberia 35
Russia 5
Belarus 21
Libya 36
Rwanda 6
Bhutan 22
Malawi 37
Senegal 7
Botswana 23
Maldives 38
Sri Lanka 8
Djibouti 24
Mauritius 39
Syria 9
Egypt 25
Moldova 40
Tanzania 10
Ethiopia 26
Mongolia 41
Togo 11
Gabon 27
Morocco 42
Uganda 12
Ghana 28
Mozambique 43
Uzbekistan 13
Guinea 29
Myanmar 44
Vietnam 14
Indonesia 30
Namibia 45
Zambia 15
Iran 31
Nepal 46
Zimbabwe 16
Kazakhstan 29

30. Before concluding, let me briefly highlight how Exim Bank helps Indian companies in their globalisation efforts though enhancing their competitiveness.
For upgrading the technological competence, we offer finance towards import of technology, finance for product development and also for undertaking research and development. We also provide advisory services for location of joint venture partners as also structuring and facilitation of Joint Ventures
The Bank offers a wide range of lending and service programmes to assist Indian companies at all stages of the business cycle. Through import of technology, capital, goods and raw materials, the Bank facilitates the upgradation of technology and capabilities of Indian companies to enable them to enhance their competitiveness.
The broad array of support programmes offered by the Bank for product development, production marketing, as also preshipment and post-shipment finance, enable Indian companies to add value resulting in exports of products, capital goods, services. The Bank has also been instrumental in promoting ventures overseas in the fields of manufacturing, assembly, marketing and trading. 30

31. THANK YOU
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