India provides Malawi with $215m line of credit for water supply projects

Malawi High Commissioner to India, George Mkondiwa on Friday, June 12 signed a US$215.68 million Line of Credit (LoC) for drinking water supply projects for Blantyre and Southern Region Water Boards.

A statement from the Malawi High Commission in New Delhi says Mkondiwa signed the LoC with the Chief General Manager of Exim Bank in India, Sudatta Mandal.

The LoC will be used for construction of new water source for Blantyre Water Board on Shire River and associated infrastructure and the construction of 30MW solar power plant for pumping of water.

It will also be used for the establishment and extension of water supply schemes in the Southern Region Water Board areas of jurisdiction.

The statement quotes Mkondiwa as saying after the signing ceremony that the LoC could not have come at a better time, particularly, considering the many challenges Blantyre and Zomba as growing cities are facing in the wake of providing portable water to the people.

He is further quoted as saying when fully implemented, the project will address the water shortages occurring in these two cities and the surrounding areas.

Malawi has previously accessed LoCs from Exim Bank of India and utilised these for various projects including the construction of the Strategic Fuel Storage facilities in the three regions of Malawi, the Greenbelt Project, Construction of the Sugar Factory in Salima and the Likhubula Water Project for Blantyre City and surrounding districts.

India is Malawi’s third largest trading partner and is the 4th largest source of her imports as well as being the 7th largest export destination.

The bilateral trade between India and Malawi in 2015 was estimated at US$250.80 million.

In 2014-2015, India exported US$214.20 million worth of goods to Malawi and imported imported US$36.78 million.

The main commodities exported by India to Malawi were textiles

yarns, fabrics, transport equipment, pharmaceuticals, machinery and other equipments.

According to the records, the major commodities imported by India from Malawi were pulses, chickpeas and other agricultural goods and through their mutual agreement on trade signed by both government, they have accorded each other the Most Favoured Nation (MFN) status.

Malawi is also a beneficiary of India’s Duty Free Tariff Preference (DFTP) scheme for Least Developed Countries (LDCs) which allows Malawi to export several commodities to India duty-free.

This resulted in a massive 1,364.62% rise in Malawi’s exports to India between 2008-09 and 2009-10. It also shifted the balance of trade in

favour of Malawi for the first time in history.”

The reports further says says between 2005-2016 more than 80 Indian companies were registered in Malawi such as Bharti Airtel, Tech Mahindra, Hi Tos Linear Agency Pvt Ltd, Weisman Ltd, Tata, Mahindra, Godrej, First Capital Bank, Pacific group of companies, Ashok Leyland and many others.

Indians firms are involved in agro processing, chemicals, energy, financial services and insurance, food processing, information technology, software development, logistics, textile, cosmetics, pharmaceuticals, cement manufacturing and hospitality services.

So far India has helped Malawi with numerous donations such as providing tractors, disc harrows, heavy earth moving machinery, traders, bulldozers and other equipment worth US$22.91 million in 2009.

India also announced a US$19.93 million project to construct cotton ginneries at Ngabu, Ngara and Balaka in 2009 and the plants were opened in 2012 and were transferred to Malawi Government.

India constructed fuel reserves at Lilongwe, Blantyre and Mzuzu in 2013 at a cost of US$26.75 million and the facilities were commissioned and transferred to Malawi Government in October 2016.

There have also been many other substantial donations from India that include a grant of US$5 million in January 2010; also a science and laboratory equipment and medical equipment worth US$3 million and US$1 million worth of tractors and implements in August 2015.

There was also a grant of US$1 million that was provided to set up a Business Incubator Centre in Malawi while on 1 July 2015, India donated US$1 million worth of essential medicines on towards disaster relief operations.

The Indian government also donated medicines and tent ridges to the Malawi Department of Disaster Management in September 2016 and also provided a further US$1 million grants in response to State of Disaster declared by the President of Malawi in 2016.

India spent US$8.46 million to construct processing plants in Liwonde and Luchenza whose construction began and in September 2015 and were commissioned by July 2016.

India also spent US$33.64 million to construct a sugar processing plant in Salima, whose work began in March 2013 and was completed in October 2015. The plant consumes 1,250 metric tonnes of sugarcane in 8 hours of operations.

In the first two months since operations began, the plant produced 300 tonnes of sugar.

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