Indian loan deal of $2bn on wednesday

Indian loan deal of $2bn on wednesday


Dhaka and New Delhi will sign the final agreement on a $2 billion (about Tk 160 billion) credit from India on Wednesday.The signing of the Line of Credit (LOC) deal will take place at the NEC Auditorium in Dhaka at 3pm, said Additional Secretary Mohammad Asif-uz-Zaman of the Economic Relations Division (ERD).ERD Senior Secretary Mohammad Mejbahuddin of Bangladesh and the chairman and managing director of India’s Exim Bank will sign the agreement on behalf of their countries, he told officials of the Bangladesh government and Indian diplomats, including the high commissioner, will be present there, according to Asif-uz-Zaman.A Memorandum of Understanding (MoU) was signed on the fresh ‘soft loan’ during Indian Prime Minister Narendra Modi’s Dhaka visit in June last year.Asked about the delay in its implementation, the ERD additional secretary blamed it on initial disagreements over some terms and conditions of the loan.However, the two countries now have agreed that 65 to 75 percent of goods and services will be procured from India, like in the previous loan deal, he said.A report on the final agreement has been sent to the prime minister.

It says all the terms and conditions tagged with the fresh credit will be like those for $1 billion India lent Bangladesh in 2010.Fifteen development projects were undertaken with the previous Line of Credit (LOC) and seven of them have already been completed.The $ 2 billion credit carries 1 percent interest rate and 0.5 percent commitment fee. The repayment period will be 20 years with a grace period of five years, according to the report.If Bangladesh fails to utilise the credit within the stipulated time, it will have to pay an additional 2 percent penalty interest.The government has selected 13 development projects—in rail, road, river, ICT and power sectors—to be implemented under the new LOC.The projects in the rail sector include upgrading the Khulna-Darshana and Parbatipur-Kaunia rail tracks, and setting up a new workshop at Syedpur Railway Station.Trucks and double-decker buses for Bangladesh Road Transport Corporation and advanced equipment for Roads and Highways Department will be procured with the loan amount.Besides, four medical colleges, a national burns institute, 12 hi-tech parks will be constructed with the Indian credit.


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