The OPEC Fund is poised to provide a $30 million loan to the City Bank Ltd to support the country's private sector for trade financing, especially in agriculture and green energy, officials said.
The proposed short-term loan will have interest based on the six-month Secured Overnight Financing Rate (SOFR).
The loan is expected to mature in a year, with the option of an extension, but there will be no grace period. Repayment will be in up to six installments, including a final lump sum or 'bullet repayment'.
The bank plans to use the funds to support international trade, mostly in agriculture and green energy, according to a document.
The deal is still being negotiated and has yet to be finalised, a senior official at the Economic Relations Division (ERD) said.
Earlier, Bangladesh and the OPEC Fund for International Development (OFID) signed an "Agreement for the Encouragement and Protection of Investment".
Under this deal, OFID has expressed interest in financing City Bank. An ERD official said the proposal is now with the finance ministry for approval.
OFID wrote to the ERD in February about the proposed loan to City Bank, citing the investment agreement.
"The terms and conditions of the financial arrangement are mutually beneficial and in the best interest of all parties involved," the letter said.
Contacted, City Bank PLC Managing Director and CEO Mashrur Arefin said the loan is under negotiation with the OPEC Fund and will take time to process.
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OPEC Fund lines up $30m loan for City Bank
REZAUL KARIM | Published: August 10, 2024 23:26:52
OPEC Fund lines up $30m loan for City Bank
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