An agreement had been signed between the governments of India and Zimbabwe in April 2019 for USD 23 million line of credit for financing renovation and upgradation of Bulawayo Thermal Power Plant at the revalidated/escalated project cost, RBI said in a notification on Thursday.
A separate agreement of USD 19.5 million was signed for financing upgradation of phase-II of Deka Pumping Station and River Intake System in Zimbabwe.
Under the arrangement, financing of export of eligible goods and services from India, as defined under the agreement, would be allowed subject to their being eligible for export under the Foreign Trade Policy of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement, RBI said.
For the thermal power plant project, out of the total credit by Exim Bank, goods, works and services of the value of at least 75 per cent of the contract price will be supplied by the seller from India, and the remaining 25 per cent of goods and services may be procured by the seller for the purpose of the eligible contract from outside India.
For the river project, goods, works and services of the value of at least 65 per cent of the contract will be supplied by Indian seller from India, and the remaining 35 per cent from outside India.
For both the projects, the LOC is effective from November 26, 2019.
Under the LOCs, the terminal utilization period is 60 months after the scheduled completion date of the project, RBI said. KPM RVK