Infrastructure Projects Current Affairs

EXIM Bank extends $4.5 billion loan to Bangladesh for social, infrastructure projects

The Export-Import Bank of India (Exim Bank) will provide loans worth about US $4.5 billion (Rs 29,200 crore) to Bangladesh for financing of various social and infrastructure projects. In this regard, Exim Bank has entered into agreement with Bangladesh Government in October 2017 to extend this line of credit (LoC) facility on behalf of Government of India (GoI).

Key Facts

Bangladesh will also use this financing facility to import consultancy services from India. Under the arrangement, financing export of eligible goods and services from India will be allowed which are eligible for export under Foreign Trade Policy of GoI and whose purchase may be agreed to be financed by Exim Bank under this agreement. The goods include plant, services (including consultancy services) and machinery and equipment.

Export-Import Bank of India (Exim Bank)

Exim Bank is wholly owned GoI entity for financing, facilitating and promoting foreign trade of India. It was setup in 1982 and is headquartered in New Delhi. It extends LoC to overseas financial institutions, regional development banks, sovereign governments and other entities abroad. It enables buyers in those countries to import developmental and infrastructure, equipment’s, goods and services from India on deferred credit terms. It also facilitates investment by Indian companies abroad for setting up subsidiaries, joint ventures or overseas acquisitions.

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AIIB approves $1.5 billion in loans to India for infrastructure projects

China-based Asian Infrastructure Investment Bank (AIIB) has approved $1.5 billion in loans to India for infrastructure-related projects in 2018. The funds will be used for investment in India’s energy, roads and urban development projects. It also includes $200 million commitment to India’s National Investment and Infrastructure Fund (NIIF) to spend on roads, housing and urban development. AIIB will let the Indian government decide how to use that money.

Asian Infrastructure Investment Bank (AIIB)

AIIB is a multilateral development bank initiated by China. Its purpose is to provide finance to infrastructure development and regional connectivity projects in the Asia-Pacific region.  It was officially established in December 2015 and opened for business in January 2016. It is headquartered in Beijing.

Its goals are to boost economic development in Asia-Pacific region, provide infrastructure, and promote regional cooperation and partnership. It prioritises investment in energy, power generation, transport, rural infrastructure, environmental protection and logistics in Asia.

So far it has 84 members including India. It has an authorised capital of US $100 billion. China is the largest shareholder of AIIB with 26.06% voting shares. India is the second largest shareholder with 7.5% followed by Russia 5.93% and Germany with 4.5%.

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