Govt set to finalise

FHM Humayan KabirThe government is set to finalise the US$ 560 million loan from China soon to set up the country's largest fertiliser factory in Sylhet, officials said Monday. Finance ministry officials said they had sent a request to the Chinese government last month for signing more than half a billion dollar loan deal as Bangladesh is ready to construct the factory. China has offered a $ 235 million concessional loan and $ 325 million buyer's credit for setting up the largest Shahjalal Urea Fertiliser Factory in Sylhet with a daily production capacity of 1,760 tonnes. Dhaka and Beijing have already completed negotiations for the Chinese loan, a finance ministry official told the FE. According to the terms and conditions, Bangladesh will have to appoint a Chinese company selected by Beijing for constructing the fertiliser factory. The company will supply the machinery for the proposed factory too. An industries ministry official said the Chinese government will provide the preferential buyer's credit at a rate of 2.0 per cent offering five years grace period with a maturity period of 20 years. In addition, Bangladesh has to pay 0.2 per cent commitment fee and 0.2 per cent management fee for the loan. "We have already signed a commercial contract with Chinese company MS Complant for setting up the urea manufacturing plant," the senior industries ministry official told the FE. If the loan deal is signed, we can go for implementing the project soon, he added. Another senior finance ministry official said though the rate of the Chinese loan is not so high, the major challenge for Bangladesh is whether the Chinese company will supply quality machinery for the plant or not. A senior Economic Relations Division (ERD) official said: "As per the request of the industries ministry they have sent the letter with a draft loan agreement to the Chinese government to finalise the deal." After getting green signal from China, we will go for finalising a date to sign the loan deal, he added. Bangladesh is an agriculture-based economy where nearly 4.0 million tonnes of fertiliser is needed per year to produce crops. Bangladesh Chemical Industries Corporation (BCIC) last week sent a project proposal to the Planning Commission to get approval of the Shahjalal Fertilsier Factory project from the Executive Committee of the National Economic Council (ECNEC). "After completing the commercial deal with MS Complant, we have sent the proposal to the Commission for getting its approval," the industries ministry official said. The gas-fired Shahjalal fertiliser plant will be set up by February 2015, he said. Out of the total $ 580 million cost, the Bangladesh government will provide nearly $ 20 million. During the last caretaker regime, the government sought funds for 28 development projects including the Shahjalal fertiliser factory. Earlier in October 2010, MS Complant submitted technical and commercial proposals to the BCIC for constructing the factory.