Maputo — The Export-Import Bank of India has approved a concessional loan of 13 million US dollars to finance the construction of a solar panel factory in southern Mozambique. The credit agreement was signed on Thursday in Maputo by Mozambique's Minister of Finance, Manuel Chang, and Exim-Bank chairman, TCA Ranganathan.
Speaking during the signing ceremony, Chang explained that the loan is based on concessional terms with repayment to be spread over twenty years with a five year grace period.
Chang pointed out that the production of photovoltaic solar power panels will enable rural areas to be electrified.
He continued, "this project, apart from improving the supply of solar power, will create new jobs for Mozambican technicians, will improve health care through the increased capacity to store vaccines and other drugs in rural areas, and will expand education and literacy".
Chang acknowledged the role of the Indian government and the Exim-Bank in searching for appropriate mechanisms for contributing to Mozambique's development and for the improvement of living conditions.
According to Ranganathan, "India sees Mozambique as a priority country and as an important partner in Africa".
The construction of the factory at the industrial park at Beluluane in Maputo province is due to begin later this year.
Constructing the factory will create 700 jobs, and once fully operational the factory will employ 70 people.
The factory will reduce the cost of importing solar panels, which is estimated to be running at between five and six million dollars a year.