IANS | 07 Jan, 2010
India Wednesday signed a deal for extending a $50 million line of credit to Zambia, with a proposal to extend another soft loan of $75 million - even as both countries decided to "reinvigorate" relations to reflect "changed times".

On the second day of his visit to Zambia, the first ever by an Indian leader in two decades, Vice President Mohammad Hamid Ansari held formal discussions with George Kunda, the Zambian vice president, as well as called on President Rupiah Banda.

After the repast of the state banquet, it was time to get down to business.

* starting with an agreement signed between Exim Bank of India and the government of Zambia to extend $50 million in concessional terms for the construction of the Itezhi-Tezhi Hydropower project.

"This project is designed to generate 120 MW of energy which will contribute to the electricity sector (in Zambia)," Ministry of External Affairs' Secretary (West), Vivek Katju told reporters.

The Itezhi-Tezhi project is being implemented by a joint venture company formed by Zambia Electricity Supply Corporation and Tata Africa Holdings. "The $50 million will go to Zesco's equity participation in the project," said Katju.

India has also proposed another $75 million of line of credit for a period of two years to be used for social sectors. "To activate it, we now await proposals from the Zambian government," he said. Besides, grant of $5 million was also offered for investment in sectors like health and education.

At the 2008 India Africa Forum Summit, India had extended lines of credit of $5.4 billion for a period of four years. Out of that, $1 billion has already been utilised.

Katju pointed out that as all lines of credit had some characteristics, so were India's - which meant that "85 percent of the material and equipment had to be sourced from India".

According to Katju, the meeting between the two vice presidents was characterised by "extraordinary warmth", where both leaders also mentioned historical ties from the era of anti-colonial struggle.

"The Zambian leadership expressed gratitude for Indian support lent during the anti-colonial struggle. On the occasion, the Zambian vice president spoke about inspiration from Mahatma Gandhi's non-violence struggle.... But, there was also recognition that times have changed," Katju said, adding that both felt need to "reinvigorate and reenergise" relations.

The senior Indian diplomat said that joint commission meeting will be held soon so that full agenda can be worked out for a fuller engagement. The relations were being focused in three areas of cooperation at the bilateral, Pan-African and multilateral level.

"At the bilateral level, the Zambian leadership was interested in tapping India's potential in human resources development," he said.

Katju said that proposed reforms to the United Nations Security Council were focused upon during the talks. "It was recognised that there was need for reforming international architecture so that it is in tune with contemporary reality," he said.

While Vice President Ansari held discussions, his wife Salma Ansari made a visit to a charity project run by the Missionaries of Charities in Lusaka.

On Thursday, Ansari is scheduled to meet with the first Zambian president, Kenneth Kaunda, who was a close friend of Indian prime minister Indira Gandhi, before leaving for the second leg of his tri-nation journey to Malawi and then to Botswana.