The government is set to issue a counter-guarantee against an ITFC loan worth US$ 300 million to finance fuel oil import by Bangladesh Petroleum Corporation (BPC), officials said.
A BPC official said the loan will be taken from the International Islamic Trade Finance Corporation (ITFC) which requires a guarantee from the central bank and a counter-guarantee from the government.
"We are going to issue a counter-guarantee soon in favour of Bangladesh Bank (BB) to facilitate BPC's oil import and operations," a finance ministry official told the FE in the last week of April.
In the third week of the last month, the state-run BPC in a letter requested the Energy and Mineral Resources Division (EMRD) to take necessary steps in this regard.
Later, the division has also sought to take steps in this connection.
"The counter-guarantee by the finance ministry will be considered a sovereign guarantee," the official said.
He explained that the government itself took responsibility for repaying the loan to ITFC if the petroleum corporation failed to pay it back.
The tenure of the loan is six months and total mark-up of the loan is 4.50 per cent annually, according to the division.
A high-powered delegation of the state-run agency signed a US$ 1.0 billion loan deal with ITFC at a meeting held on July 10-12, 2018 at Jeddah in Kingdom of Saudi Arabia (KSA).
BPC preferred to borrow US$ 800 million for 2019, said a BPC official.
A total of US$ 800 million was approved by the standing committee on non-concessional loan from ITFC in November, 2018.
"We have sought a counter-guarantee from the finance ministry through the EMRD about ITFC loan," a senior official of BPC said.
BPC imported 6.7 million tonnes of petroleum products including diesel, jet fuel, furnace oil and octane for the fiscal year (FY) 2017-18, he said earlier.
In the FY '19, BPC might import around 7.5 million tonnes of petroleum products. It incurred a loss of Tk 23.32 billion in FY '14 and Tk 48.32 billion in FY '13.
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