India may soon extend soft credit worth $640 million to Ethiopia 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.
