India to lend Ethiopia to develop sugar industry: official

India may soon extend soft credit worth 640 million U.S. dollars to Ethiopia for it to develop and expand sugar production facilities with machinery supplied by Indian manufacturers, according to an Ethiopian official on Sunday.

The 20-year credit line to Ethiopia will be at a nominal 1.75 percent interest per annum with an initial five-year moratorium on interest under the India Development Initiative (IDI) scheme, said an official from Ethiopia's Ministry of Finance and Economic Development, who declined to be named.

Under the IDI, which started in 2004, India's Finance Ministry provides soft supplier credit up to 85 percent of the total value of deals involved. In return for the soft loan, Indian sugar manufacturers may be allowed to set up mills in Ethiopia.

It is learned that the Indian Sugar Mills Association (ISMA), the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) will send a delegation to seek sugar mill opportunities in Ethiopia.

The state-owned Ethiopian Sugar Development Agency (ESDA) has planned to boost sugar production by upgrading existing factories, building new plants and developing land and water resources.

The ESDA said the government was building the 100-million- dollar Tendaho Sugar Factory with a production capacity of 600,000 tons a year in lower Awash Valley, a region some 600 km northeast of the capital Addis Ababa. Plans were also afoot to expand and revamp three state-owned sugar factories with the aim of boosting output.

Source: Xinhua