$162.7m foreign loan proposals approved

The non-concessional loan committee approved Monday two proposals worth US$162.7 million for construction of a power plant and procurement of vehicles for city corporations and municipalities, sources said.

With the loan money worth $112.7 million from the HSBC, the Bangladesh Power Development Board (BPDB) will set up a 100 MW peaking power plant in Chapainawabganj.

The BPDB for the first time has entered the foreign loan market as it has been facing  fund crisis, a member of the committee said.

He said construction of the power plant has been delayed for three years as the foreign donors were showing less interest to fund the project.

The BPDB had floated tender on September 9, 2011 for the power plant but it failed to get any donor for its construction. The Board had talks with several donor agencies to fund the construction of the power plant but got poor response from them.

The HSBC loan will charge the BPDB LIBOR (London Inter-bank offered rate) plus 5.0 per cent rate of interest.

The same meeting also approved a proposal for taking supplier's credit from Belarus to procure vehicles and equipment for city corporations and municipalities under a government-to-government arrangement.

Against the loan amount, the Belarus government will provide services to the vehicles for next 11 years according to the contract of commodity credit. The Belarus government will charge Bangladesh 6.0 per cent interest.

Committee chairman finance minister AMA Muhith presided over the meeting held at his Bangladesh Secretariat office. Bangladesh Bank governor Dr Atiur Rahman and high officials of the concerned ministries attended the meeting.

syful-islam@outlook.com