Third Line of Credit

India likely to relax terms, conditions

India is likely to relax the terms and conditions for the Third Line of Credit (LoC), as Bangladesh conducted hectic negotiations to ease project implementation, disclosed sources at the finance ministry.

The agreement is likely to be signed next month, as India has verbally informed Bangladesh about the final draft agreement, mentioning the terms and conditions.

Officials at the finance ministry said 65 per cent of procurement for the projects would have to be made from India. This component was 75 per cent in case of the second LoC and 85 per cent for the first LoC.

The sources at the finance ministry said the memorandum of understanding (MoU) signed between India and Bangladesh for the third LoC did not mention any conditions.

Sources said the conditions and terms of utilisation of the third Indian LoC would be included in the agreement to be signed between India and Bangladesh.

Earlier, the Indian side had proposed to retain all terms and conditions as before. But Bangladesh urged India to reduce the procurement condition to implement the projects as soon as possible.

The officials said the procurement-related projects would not face any problems. Even civil construction, railway, and road projects would not face difficulties either as the terms and conditions were going to be relaxed.

“We are in no hurry to implement the third LoC, as we are yet to start implementing the projects of the second LoC,” officials said.

Indian Prime Minister Narendra Modi had announced a new concessional credit line of USD 4.5 billion for the implementation of various projects in Bangladesh during Prime Minister Sheikh Hasina’s visit in April.

“We are happy to announce a concessional line of credit of USD 4.5 billion for investment in priority sectors in Bangladesh,” Modi had said in a joint statement with his Bangladeshi counterpart Sheikh Hasina at Hyderabad House in New Delhi.

Former Indian PM Dr Manmohan Sigh had announced the first LoC of USD 1 billion during his visit to Bangladesh in 2010. Later, Modi had announced the second LoC of USD 2 billion during his visit in 2015.

The sources said the terms and conditions were not incorporated in the MoU, though the Indian side had proposed their inclusion.

Under the Indian proposal, the interest rate will be one per cent with a five-year grace period and a 0.5 per cent commitment fee.

Sources said, as per the Indian proposal, a maximum of 65 per cent of procurement for the projects would have to be made from India.

According to sources, 17 projects were incorporated under the third LoC, and some more will be included later.

The projects that have primarily been selected are Infrastructure development for power evacuation facilities of the Rooppur Nuclear Power plant (USD 940 million); Payra Port multipurpose terminal (USD 350 million); the Buriganga river (new Dhaleswari-Pungli-Bangshi-Turag-Buriganga river system) restoration project (USD 196.18 million); construction of a new dual-gauge railway line from Bogra to Shahed M Monsur Ali Station in Sirajganj (USD 501.23 million); the upgrading of the Saidpur airport; widening of the Benapole-Jessore-Narail Bhatipara-Bhanga road to four lanes(135 km); Bay container terminal (Chittagong); development of rail- and road-based inland container depot (ICD) at Ishwardi; transmission network development in the new alignment of NE-Bangladesh-NER (Katrihar-Parbatipur-Bornagar) (765 KV inter-connection); the upgrading of the Mongla Port; Chittagong Dry Dock Limited; four lanes for Ramgarh to Baruerhat road (35 km); four lanes for Comilla-Brahmanbaria-Sarail road (USD 75 million); establishment of a special economic zone (Indian SEZ) at Mirersorai; Mollahat 100 MW solar PV power plant; supply of machinery for solid waste management in the Dhaka South City Corporation; and installation of one lakh LED street-lights in Dhaka, Chittagong and Rajshahi by Energy Efficiency Service Limited (EESL).

Third Line of Credit

India likely to relax terms, conditions

India is likely to relax the terms and conditions for the Third Line of Credit (LoC), as Bangladesh conducted hectic negotiations to ease project implementation, disclosed sources at the finance ministry. The agreement is likely to be signed next month, as India has verbally informed Bangladesh about the final draft agreement, mentioning the terms and conditions. Officials at the finance ministry said 65 per cent of procurement for the projects would have to be made from India. This component was 75 per cent in case of the second LoC and 85 per cent for the first LoC. The sources at the finance ministry said the memorandum of understanding (MoU) signed between India and Bangladesh for the third LoC did not mention any conditions. Sources said the conditions and terms of utilisation of the third Indian LoC would be included in the agreement to be signed between India and Bangladesh. Earlier, the Indian side had proposed to retain all terms and conditions as before. But Bangladesh urged India to reduce the procurement condition to implement the projects as soon as possible. The officials said the procurement-related projects would not face any problems. Even civil construction, railway, and road projects would not face difficulties either as the terms and conditions were going to be relaxed. We are in no hurry to implement the third LoC, as we are yet to start implementing the projects of the second LoC, officials said. Indian Prime Minister Narendra Modi had announced a new concessional credit line of USD 4.5 billion for the implementation of various projects in Bangladesh during Prime Minister Sheikh Hasinas visit in April. We are happy to announce a concessional line of credit of USD 4.5 billion for investment in priority sectors in Bangladesh, Modi had said in a joint statement with his Bangladeshi counterpart Sheikh Hasina at Hyderabad House in New Delhi. Former Indian PM Dr Manmohan Sigh had announced the first LoC of USD 1 billion during his visit to Bangladesh in 2010. Later, Modi had announced the second LoC of USD 2 billion during his visit in 2015. The sources said the terms and conditions were not incorporated in the MoU, though the Indian side had proposed their inclusion. Under the Indian proposal, the interest rate will be one per cent with a five-year grace period and a 0.5 per cent commitment fee. Sources said, as per the Indian proposal, a maximum of 65 per cent of procurement for the projects would have to be made from India. According to sources, 17 projects were incorporated under the third LoC, and some more will be included later. The projects that have primarily been selected are Infrastructure development for power evacuation facilities of the Rooppur Nuclear Power plant (USD 940 million); Payra Port multipurpose terminal (USD 350 million); the Buriganga river (new Dhaleswari-Pungli-Bangshi-Turag-Buriganga river system) restoration project (USD 196.18 million); construction of a new dual-gauge railway line from Bogra to Shahed M Monsur Ali Station in Sirajganj (USD 501.23 million); the upgrading of the Saidpur airport; widening of the Benapole-Jessore-Narail Bhatipara-Bhanga road to four lanes(135 km); Bay container terminal (Chittagong); development of rail- and road-based inland container depot (ICD) at Ishwardi; transmission network development in the new alignment of NE-Bangladesh-NER (Katrihar-Parbatipur-Bornagar) (765 KV inter-connection); the upgrading of the Mongla Port; Chittagong Dry Dock Limited; four lanes for Ramgarh to Baruerhat road (35 km); four lanes for Comilla-Brahmanbaria-Sarail road (USD 75 million); establishment of a special economic zone (Indian SEZ) at Mirersorai; Mollahat 100 MW solar PV power plant; supply of machinery for solid waste management in the Dhaka South City Corporation; and installation of one lakh LED street-lights in Dhaka, Chittagong and Rajshahi by Energy Efficiency Service Limited (EESL).