Organisation for Economic Cooperation & Development Paris, March 16-17, 2006. EXIM BANK: PARTNER IN AFRICA’S DEVELOPMENT. S.R. Rao Chief General Manager Export-Import Bank of India. Structure of Presentation. India’s Foreign Trade & Indo-African Trade .
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Organisation for Economic Cooperation & Development Paris, March 16-17, 2006 EXIM BANK: PARTNER IN AFRICA’S DEVELOPMENT S.R. Rao Chief General Manager Export-Import Bank of India
Structure of Presentation India’s Foreign Trade & Indo-African Trade Exim Bank of India : An Overview & Initiatives in Africa’s Development
India’s Foreign Trade Merchandise Trade (US$ bn) Source: Ministry of Commerce & Industry (MOCI), Government of India (GOI)
India’s Services Exports Source: Reserve Bank of India
Trends in Software Exports One of the Fastest Growing Export Items • Software exports rose from US$ 0.7 bn in FY 1996 to US$ 17.2 bn in FY 2005 • Sharp rise in services exports due to software exports Source: NASSCOM P - projection
Software Exports – Role of Exim Bank • Exim Bank associated with development of Indian software industry since 1986 • Comprehensive financing / service package for software industry including: - project / equipment finance; working capital finance - overseas investment finance - obtaining product / process certification - export marketing & export product development • Establishment / expansion of software training institutes • Facilitates setting up of software technology parks (STPs)
Indo-African Trade Relations Source: Ministry of Commerce & Industry (MOCI), Govt. of India (GOI) Note: Import data do not include oil imports
India’s Major Trade Partners in Africa, 2004-05 Exports (% share) Imports (% share) Source: MOCI, GOI
Major Items of Trade, 2004-05 Exports (% share) Imports (% share) Source: MOCI, GOI
Exim Bank of India – An Overview & Initiatives in Africa’s Development
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)
Evolving Vision 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 1982-85 Export Capability Creation 1986-94 Comprehensive Range of Products And Services – All Stages of the Business Cycle – Customer Centric Approach Exim Bank TODAY Leadership and Expertise in India’s Export Finance
Organisation: Network of Offices OFFICES IN INDIA OFFICES OVERSEAS
Advisory Services Pre-Shipment Export Marketing Knowledge Building Export Production Post-Shipment Export ProductDevelopment Investment Abroad INFORMATION Advisory Services Import Finance SUPPLEMENTS FINANCING PROGRAMMES Range of Products & Services Presence Across All Stages of Business Cycle Value Based Services
Business Strategy THREE-PRONGED APPROACH
Major Programmes … encompass all sectors of the economy … Agriculture, Industry and Services.
Support for Execution of Projects Pioneering Role in Promoting Project Exports • Exim Bank plays a pivotal role in promoting and financing Indian companies in the execution of projects • Over the past two decades, increasing number of projects have been executed by Indian companies in North Africa, Sub Saharan Africa, West Asia, South & South East Asia, CIS and Latin America Projects currently under execution with Exim Bank support No. of Contracts : 190 Value of Contracts : US$ 6 bn No. of Countries : 42
Exim Bank: Facilitator in Project Execution Facilitating and Supporting Infrastructure Development • Turnkey contract for Gas Based Power Project in Tanzania funded by World Bank. • Transmission System Rehabilitation and Maintenance Project in Zambia. • Turnkey contract for Multi-Product Pipeline Project in Sudan • Consultancy assignment in Small Town water supply project in Nigeria. • Supplies for Urban Power Rehabilitation Project in Uganda. • Transmission Line Projects in Algeria, Tunisia • Construction of Cyber Towers in Mauritius
Support for Sourcing Equipment / Projects Lines of Credit (LOC): A catalyst for trade promotion • Enables import of Indian equipment and technology on deferred credit terms • Particularly relevant for small and medium sectors • Lines of Credit are extended to Overseas Governments, Government agencies overseas, National or regional development banks abroad, Commercial banks abroad • 60 Operative LOCs amounting to US$ 1.63 billion in more than 70 countries
Lines of Credit Extended to Africa Facilitates import of project-related equipments and services • 33 LOCs currently in operation in Africa amounting to US$ 1 billion • Countriescovered includeAngola, Burkina Faso, Burundi,Chad,Comoros,Congo,Cote d’Ivoire,Djibouti,Equatorial Guinea,Egypt, Eritrea, Ethiopia,Gambia,Guinea Bissau, Kenya,Lesotho,Malawi,Mali,Mauritius,Morocco,Mozambique,Niger,Rwanda,Senegal,Seychelles,Somalia,South Africa,Sudan,Tanzania,Togo,Uganda,Zambia& Zimbabwe. • Institutions include: - ABSA Bank, South Africa - Offshore Development Company, Namibia - Eastern and Southern African Trade & Development Bank (PTA Bank) - West African Development Bank (BOAD) - Eastern African Development Bank (EADB)
Overseas Investment Finance Facilitates value addition, contributes to capacity building & capability creation in host countries • Supported 127 overseas ventures by 104 Indian companies in 44 countries. Aggregate loans extended amount to approx. US$ 470 mn. • Term loan towards equity of Indian company (promoter funding) • Term loan towards Indian promoter’s loans to overseas Joint Ventures (JVs): Term loan or working capital directly to JVs • Term loan to overseas JVs for import of plant and machinery and services from India; Can be structured as supplier’s credit or buyer’s credit / LOC • Exim Bank also undertakes direct equity participation in Indian ventures abroad to enhance credibility and acceptability of Indian ventures overseas.
Exim Bank: Facilitating Indian Investment in Africa • Indicates presence of Indian companies in some of the countries in Africa in the form of joint ventures, supported by Exim Bank. Mauritius Infotainment Sector Kenya Precured Tread Rubber Morocco Fertilisers & Chemicals Uganda Pharmaceuticals South Africa Computers Zambia Precious stones
Support Activities • Cooperation arrangements with International Finance Corporation (World Bank Group) to facilitate utilisation of Indian consultancy services: Africa Project Development Facilities • Publications of export related research papers and newsletters • Sector Studies & Country Studies (Occasional Paper/Working Paper series) • Export Advantage (Quarterly) • Agri-Export Advantage (Bimonthly in 10 regional languages) • Indo-Africa Business (Quarterly) • Multilateral Funded Projects – tracks opportunities and offers value added information, advisory & support services to Indian companies to enable their participation
Exim Bank - A Partner Institution to Promote Economic Development in Africa Provides Information, Advisory & Support Services to facilitate participation of Indian companies in Africa in projects, supply & services contracts funded by multilateral agencies such as African Development Bank, Afrexim Bank,PTA Bank, East African Development Bank, World Bank. Examples of Funded Projects in Africa executed by Indian companies: • Supply of Pharmaceuticals; Ghana Sewerage Study; Ethiopia • Transmission Lines; Kenya Telecom Project; Malawi • Supply of Earth Moving Equipment; Tunisia Sugar Plant; Nigeria • Railway Restructuring Project; Tanzania
Consultancy Support Services: Tie ups in Africa International Finance Corporation, Washington under the following arrangements: Tie-up with Africa Project Development Facility (APDF) Africa Enterprise Fund (AEF) Technical Assistance & Trust Fund (TATF) Eastern & Southern African Trade & Development Bank (PTA Bank) African Management Services Company (AMSCO) Under Government of India-African Development Bank Cooperation Agreement
Indian Consultancy Assignments in Africa Uganda Nutri-Product Factory Ghana Refrigeration Tanzania Accounting Cameroon Cement Namibia Investment Promotion Nigeria Poultry Kenya Financial Training Mauritius Software Madagascar Software Gambia Paper Zambia Gems & Jewellery Zimbabwe Printing Press • Indicates assignments completed by Indian Consultants in Africa • Contributes towards private sector developmentinhost countries
Exim Bank: Partner in Institution Building Design and implementation of Export Finance Programmes of Industrial Development Corporation, South Africa Establishing the Afreximbank Consultancy assignment for the Government of Mauritius on “Mauritius as an Investment Hub for Indian Firms”
Other Initiatives in Africa • Strong Relationship with African Development Bank (AfDB) • Co-financing Agreement with AfDB • Seminars organised with AfDB in major cities in India • CEO level delegations led by Exim Bank to AfDB • Institutional Linkages in Africa • Industrial Development Corporation of South Africa Limited (IDC) • Foreign Investment Promotion Agency, Tunisia • Banque Internationale Arabe de Tunisie • Board of Investment of Mauritius • Member of Association of African Development Finance Institutions
Other Initiatives in Africa • Representative Office in Johannesburg, South Africa • Equity Stake in Afreximbank, West African Development Bank, Development Bank of Zambia • In-house research studies on Africa: • Studies on India’s Trade and Investment Potential - Select COMESA Countries; Southern African Customs Union (SACU); SADC Countries; South Africa • Snap Market Survey for Indian Pharmaceuticals Products in South Africa • Strategy for Quantum Jump in Exports: Focus on Africa, LAC and China • Key partner institution in India-Africa Conclaves held in March & November 2005 in New Delhi
I M P O R T Exim Bank : Partner in Development • Final Products • Capital Goods • Capital(Overseas Ventures) • Technology • Capital (Foreign Investment) • Raw Materials • Capital Goods EXPORT • Product Development • Production • Marketing • Pre shipment • Post shipment ADDITION VALUE
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