While the first proposal under the Telecommunication Consultants India Ltd is expected to be cleared soon, another company, Tata International, has withdrawn its application as the scheme covers only 90 per cent of the risk.
Senior commerce ministry officials said TCIL's $10 million telecom project in Angola was likely to be the first project to be cleared by the Export Credit Guarantee Corporation, which operates the NEIA for risk insurance under the account.
"The ECGC has cleared TCIL's project under the NEIA. We are now waiting to see if the finance ministry is extending a line of credit to Angola. If the letter of credit which carries the central government guarantee is issued, we may not have to cover TCIL's project under the NEIA," a commerce ministry official told Business Standard.
The commerce ministry has set aside Rs 180 crore (Rs 1.8 billion) under the account for the current fiscal.
Tata International, which had also approached the ECGC for covering its supply of engineering goods to Sudan under the account, later withdrew its application.
"Under the NEIA, only 90 per cent of the risk is covered. The company wants 100 per cent risk coverage. It is now looking at other avenues to get 100 per cent risk cover," the official said.
The ECGC has so far received four proposals for NEIA. A second proposal of TCIL for undertaking a project export to Sudan was turned down by ECGC as the exposure to Sudan had already reached a certain level and it was found to be extremely risky to undertake the project, the official said.
A fourth proposal of Alstom India to supply hydroelectric project equipment to Vietnam is being examined by the ECGC.
Officials said with more Indian companies now eyeing projects exports to Africa, the commerce ministry had asked the ECGC to review the credit rating for the entire African continent. The exercise, which is being done after five years, is expected to be completed by the month-end.
Under the credit rating, individual countries are rated on a scale of one to seven on the basis of their risks - economic and political.
The Cabinet Committee on Economic Affairs had, in January 2006, approved the proposal for setting up a separate fund with a corpus of Rs 2,000 crore (Rs 20 billion) called the National Export Insurance Account.
The fund, maintained and operated by the ECGC has 20 per cent of the risk directly borne by the ECGC from its own funds.
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