India Extends $75 mn LOC to Cuba for Solar Projects

India has extended a LOC of USD 75 million to Cuba for financing solar projects after the agreement between Exim Bank and Banco Exterior De Cuba came into effect.

India has extended a line of credit (LOC) of USD 75 million (Rs 500 crore) to Cuba for financing solar projects. An agreement signed between Export-Import Bank of India (Exim Bank) and Banco Exterior De Cuba in July last year came into effect from December 12, the RBI has said in a statement.

Banco Exterior De Cuba is a nominated agency of the Government of Cuba.

“Exim Bank has entered into an agreement dated July 16, 2019, with Banco Exterior De Cuba, for making available to the latter, Government of India supported Line of Credit (LoC) of USD 75 million for the purpose of financing installation of 75 MW Photovoltaic Solar Parks in the Republic of Cuba,” it said.

Under the LoC, the terminal utilisation period is 60 months after the scheduled completion date of the project.

As per the agreement, financing of export of eligible goods and services from India would be allowed subject to their being eligible for export under the Foreign Trade Policy.

Out of the total credit by Exim Bank under the agreement, goods, works and services of the value of at least 75 percent of the contract price can be supplied by the seller from India, and the remaining 25 percent of goods and services may be procured by the seller from outside India, the statement added.

In December 2019, we had reported that India had extended LOCs for two solar projects in Guinea. The agreements were exchanged in the presence of External Affairs Minister S Jaishankar and his Guinean counterpart Mamadi Toure. The two countries also signed an agreement for the development of a water supply agreement in Guinea. The External Affairs Minister also said that the development of the solar projects reflected Guinea’s commitment to the International Solar Alliance (ISA).