Chinese Exim Bank to give $ 1.16b in loan

The Exim Bank of China is set to provide Bangladesh with US$ 1.16 billion in loan for implementing three major projects.

Sources said state-owned Exim Bank wrapped up Thursday its negotiations on the proposed loan with the agencies concerned through Economic Relations Division (ERD).

"Following discussions, the Exim Bank has finally agreed to provide $ 1.16 billion in loan for implementing three projects. Agreements to this effect are expected to be signed during the visit of Chinese President Xi Jinping to Bangladesh," a senior ERD official told the FE.

According to the proposal, loan amounting to $ 184 million would be available for purchasing six vessels, $ 705 million for constructing Karnaphuli tunnel and $ 280 million for setting up a water treatment plant.

However, sources said, negotiation over any other projects sent by different ministries through ERD including the Padma Rail Connectivity project was not held. Signing of loan agreement on any other projects is thin, they added.

The ERD has sent more than 20 projects involving several billion dollars with the hope for signing loan agreements during the upcoming visit of the Chinese President on October 14.

But before negotiation, an agency will have to complete formalities like signing of commercial agreement, approval of project from the cabinet body and sending loan application to the bank.

The ERD official said of the three projects, loan agreements to buy six vessels and implement water treatment plant project at Dasherkandi are confirmed as its loan framework agreement and vetting were completed.

Some formalities regarding Karnaphuli tunnel project are yet to be completed, he added.

Mr Xi Jinping is due in Dhaka on October 14 before the BRICS (Brazil-Russia-India-China-South Africa) Summit to be held in India from October 15-16.

If the agreement is signed, China will provide US$ 184.50 million in concessional loan to Bangladesh for procurement of six vessels - three oil tankers and three bulk carriers - having 39,000DWT capacity each.

Dhaka Water Supply and Sewerage Authority (WASA) will finance the construction of a sewerage treatment plant. It will be set up on 60 acres of land at Dasherkandi in the city`s Khilgaon area.

The Bangladesh Bridge Authority (BBA) signed a commercial agreement with a Chinese company to construct the 3.4- kilometre tunnel under the Karnaphuli River.