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Home / NEWS / AFRICA / India offers $1bn incentive for African infrastructure investment

India offers $1bn incentive for African infrastructure investment

By on June 12, 2012

India offers $1bn incentive for African infrastructure investment

Cantonments Housing ProjectKOLKATA (miningweekly.com) - The Indian government has set aside some $1-billion, offering fertiliser companies soft loans to create logistics and infrastructure facilities in African countries like Eritrea, Ethiopia, the Democratic Republic of Congo and Ghana as a precursor to acquiring fertiliser mineral assets in these countries.

“It is necessary to deepen economic cooperation leading to convergence of economic needs of two countries before mineral asset acquisitions can be successfully negotiated,” a senior official in India’s Department of Chemicals and Fertiliser said.

India has identified the African countries for the acquisition of fertiliser mineral assets like potash and rock phosphate; however, Indian fertiliser companies so far have been unsuccessful in concluding any overseas acquisition of raw material sources.

“It is very difficult to successfully gain access to overseas mineral assets, particularly in Africa, without long-term bilateral economic engagements. The model adopted by China has been very successful. Chinese companies invest heavily in infrastructure and logistics before gaining concessions for minerals. India needs to adopt a similar approach,” the official said.

“The Indian government proposes to spend $1-billion between 2012 and 2017 through government-owned fertiliser companies to establish sovereign commitments in the African countries. Subsequently, the corpus would be increased to fund mineral asset acquisitions,” he added.

Several Indian companies operate out of South Africa, Tunisia and Morocco but have not been able to extend their footprint into other countries owing to a lack of government support. The soft lines of credit were expected to fill this gap, the official said.

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