Home Economy India offers $125 million lines of credit to Zambia

India offers $125 million lines of credit to Zambia


Lusaka: India Wednesday offered lines of credit totalling $125 million to Zambia, even as both countries agreed there was need to reinvigorate ties to reflect changed times.

On the second day of his visit to Zambia, the first by an Indian leader in two decades, Vice President Mohammed Hussain Ansari held formal discussions with George Kunda, the Zambian vice president. He also called on President Rupiah Banda.

After the glitter of the state banquet, it was time to get down to business – starting with an agreement signed between Exim Bank of India and the Zambian government to extend $50 million in concessional terms for the construction of the Itezhi-Tezhi Hydropower project.

“This project is designed to generate 120 mega watt of energy which will contribute to the electricity sector (in Zambia),” external affairs ministry secretary (West) Vivek Katju told reporters.

The Itezhi-Tezhi project is being implemented by a joint venture company formed by Zesco and Tata Africa Holdings. “The $50 million will go to Zesco’s equity participation in the project,” said Katju.

Further, India has also extended another $75 million of line of credit for a period of two years to be used for social sectors. “We now await proposals from the Zambian government,” he said. Besides, grant of $5 million was also offered for investment in sectors like health and education.

At the 2008 India Africa Forum Summit, India had extended lines of credit of $5.4 billion for a period of four years. Out of that, $1 billion has already been utilised.

Katju pointed out that as all lines of credit had some characteristics, so were India’s – which meant that “85 percent of the material, equipment had to be sourced from India”.

According to Katju, the meeting between the two vice presidents was characterised by “extraordinary warmth”, where both leaders also mentioned historical ties from the anti-colonial struggle.

“On the occasion, the Zambian vice president spoke about inspiration from Mahatma Gandhi’s non-violence struggle. But, there was also recognition that times have changed,” he said, adding that both felt need to “reinvigorate and reenergise” relations.

The Indian diplomat said that joint commission meeting will be held soon so that full agenda can be worked out for a fuller engagement. The relations were being focused in three areas of cooperation at the bilateral, Pan-African and multilateral level.

“At the bilateral level, the Zambian leadership was interested in tapping India’s potential in human resources development,” he said.

While Ansari held discussions, his wife, Salma Ansari, made a visit to a charity project run by the Missionaries of Charities in Lusaka.

On Thursday, Ansari is scheduled to meet with Zambia’s first president, the legendary Kenneth Kaunda, who was a close friend of Indian prime minister Indira Gandhi, before leaving for the second leg of his tri-nation journey to Malawi and then Botswana.