New Delhi: India will lend $300 million to fund a railway line connecting Ethiopia and Djibouti as part of its programme to invest in Africa and use that avenue to boost exports of goods and services to the continent.

“All financing can be done only if there is export of Indian goods and services," said T.C.A. Ranganathan, chairman and managing director, Export-Import (Exim) Bank of India. The money will be provided as lines of credit by Exim Bank.

This is in line with the development funding model followed globally with contracts and other benefits going to the country providing the money. India has already invested a total $5.4 billion in 39 of 53 African countries in sectors such as agriculture, manufacturing, textile, sugar, leather and steel.

The Detailed Project Report (DPR) for the 210 km project will be drawn up by state-run RITES Ltd. The 20-year loan will be given to Ethiopia at a concessional 1.75% as it’s classified as a highly indebted poor country or HIPC.

The project will take an estimated 3.5 years to complete and will be the first railway development project in Northern Ethiopia.

China has been a leading investor in poorer countries in Africa and elsewhere as it seeks to extend its sphere of influence and step up its hunt for resources. India has been trying to catch up with investments of its own.