India gives Bangladesh US$ 4.5 billion on easy terms

India gives Bangladesh US$ 4.5 billion on easy terms

Dhaka, October 4 (BDNews24): India on Wednesday gave a loan of US$ 4.5 billion to Bangladesh at one per cent interest, repayable in 20 years with a grace period of five years.

Bangladesh will use the funds for 17 priority infrastructure projects, which include electricity, railroads, roads, shipping and ports.

The agreement was signed here in the presence of the visiting Indian Finance Minister Arun Jaitley and Bangladesh Finance Minister AMA Muhith.

Economic Relations Division Secretary Kazi Shofiqul Azam signed the deal on behalf of Bangladesh, while Managing Director of the Export-Import Bank of India (Exim) David Rasquinha signed for India.

Bangladesh has developed significantly on the socioeconomic front in the past seven years, Jaitley said after the signing.

“We have stood by Bangladesh’s attempts to develop and we will do so in the future. This significant agreement is a continuation of that effort,” he said.

“Bangladesh and India have excellent relations at the moment,” said his Bangladeshi counterpart, Muhith.

“They stood by us during our independence struggle. We hope they will continue to do so in the future,” Muhith added.

The US$ 4.5bn deal had been announced during Prime Minister Sheikh Hasina’s visit to India in April. The Indian finance minister’s trip to Bangladesh was used to finalize the agreement.

In 2010, India extended its first Line of Credit (LoC) to Bangladesh with a US$ 1 billion loan agreement.

Twelve of the 16 infrastructure projects covered in that deal have been completed, officials say.

The second LoC, amounting to $2 billion, was issued in 2016. The projects covered under that agreement are in various stages of development.

(The featured picture at the top shows Bangladesh Finance Minister AMA.Muhith speaking as his Indian counterpart Arun Jaitley looks on)