China agreed to finance Bangladesh's larger priority development projects on easier terms and at a cut-down lending rate, officials said Monday after negotiations in Dhaka.
The Chinese government's lending agency--EXIM Bank--assured of relaxing the terms and conditions, including lowering the interest rate on their proposed credits.
Economic Relations Division (ERD) officials said the Chinese lender suggested the government to prepare a priority-project list from the 15 proposed ones.
The lender is ready to provide adequate funds for implementing the select ones.
At the talks, the EXIM Bank delegation said they were interested to finance some more projects bigger in size if the Bangladesh government takes up plans for implementing those, a senior ERD official said.
The hosts sat with the visiting EXIM Bank delegation, led by its Deputy General Manager, for discussing the projects already proposed to Beijing for funding in five years until 2018.
"EXIM Bank has agreed in principle to finance Bangladesh's priority projects. They have also shown interest in financing more bigger projects as per the priority of the country," said the ERD official.
Earlier, Dhaka had sought US$9.03 billion worth of financial support for 15 development projects for five years (2014-2018) from Beijing to help support railway, energy, power, water supply and sanitation, ICT, and other infrastructure development.
Two of the projects, including the US$3.93 billion Ganges Barrage and the $1.0 billion Building of a dual-gauge double-track railway bridge parallel to the existing Jamuna Bridge, have been dropped from the list as Bangladesh has decided to search other donors, including Japan, for investing there.
The ERD official said although Bangladesh sought financing from China for the total 15 projects, financing two of them will be requested from other donors.
The ERD officials said the EXIM Bank at the meeting Monday also agreed to consider Dhaka's request to relax the terms and conditions for the Chinese lending.
Dhaka had almost halted its plan for borrowing from Beijing due to absence of the settlement of proposal on relaxing the terms and conditions binding the Chinese credits.
In the last Joint Economic Commission (JEC) meeting, Bangladesh had requested the Chinese government to cut their lending rate to 1.50 from the existing 2.0 per cent, and enhance grace period to seven years from five years for the repayment of the loans.
Currently, China offers credits for Bangladesh's development charging 2.0 percent interest rate with the maturity of 20 years which include a five-year grace period.
kabirhumayan10@gmail.com
