Bangladesh signs USD 4.5 billion loan deal with India to develop infrastructure, social sector

Story By: Rajesh Sharma
Wednesday, October, 04 2017 - 15:09

Bangladesh on Wednesday signed USD 4.5 billion third line of credit (LoC) agreement with India. As per reports, the line of credit will be used to fund 17 major projects in Bangladesh, which include electricity, railroads, roads, shipping and ports.

“We have stood by Bangladesh’s attempts to develop and we will do so in the future. This significant agreement is a continuation of that effort,” Finance Minister Arun Jaitley said following the signing of the deal.

“Bangladesh has developed significantly on the socio-economic front in the past seven years,” he said.

As per the deal, the country will have 20 years to pay back the loans, with a grace period of five years at the interest rate of 1 per cent a year.

The USD 4.5bn LoC was announced during Prime Minister Sheikh Hasina's visit to India in April.

The two countries signed the first LoC in August 2010 while the second one was inked in March, 2016. 

Officials earlier said Bangladesh would have to purchase 65 to 75 per cent of the services, goods or works from the Indian market with the money to be provided under the third LoC following the precedence of the previous two nearly identical agreements. 



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