Third Indian LoC
17 projects worth $3.57b included
JAGARAN CHAKMA
Bangladesh has finally included 17 projects, involving a total of USD 3.57 billion or Tk 28,650 crore (approximately), for the third Indian line of credit (LoC) that will be signed during the upcoming visit of Prime Minister Sheikh Hasina to New Delhi. Bangladesh and India may sign a pact to expand Indian investments in the country when PM Sheikh Hasina visits the neighbouring country most likely in April.
According to sources in the finance ministry, Bangladesh has primarily finalised 17 projects, worth over USD 3.57 billion. The sources said the projects are related to the ports, airports, railways, and roads that have links with Indian land ports. This would help boost trade between the neighbours.
This will be Hasinas first official visit since the Narendra Modi-led government assumed power in May 2014. Hasina was scheduled to visit India in December last year, but the trip was postponed. Officials of the two countries are now sorting out details to finalise the upcoming visit.
India has given USD 1 billion and USD 2 billion through the first and second LOCs it respectively extended to Bangladesh.
The loans have a 20-year repayment term, including a grace period of five years, and a one per cent annual interest rate along with a 0.5 per cent commitment fee.
The projects that have been primarily selected are: The Buriganga river (new Dhaleswari-Pungli-Bangshi-Turag-Buriganga river system) restoration project (USD 196.18 million), the Ashuganj-Zakiganj route (USD 38 million), the Payra port dry bulk coal terminal (USD 300 million), the Payra port multipurpose terminal (USD 350 million), construction of a new dual-gauge rail line
from Bogra to Shahed M Monsur Ali Station in Sirajganj (USD 501.23 million), development of rail- and road-based inland container depot (ICD) at Ishurdi (USD 35 million), upgrade of land customs stations
(LCSs) to integrated check posts (ICPs) on both sides (no estimate yet), construction of an economic zone at Mirsarai (USD 50 million), Bogra-Jharkhand (India) 400kv transmission line project (USD 177.04 million), Mollahat 100 MW solar PV power plant (USD 157.68 million), Gazipur 450-MW combined
cycle power plant (USD 402.41 million), infrastructure development for power evacuation facilities of Rooppur Nuclear Plant (USD 940 million),
four-laning of Comilla-Brahmanbaria-Sarail road (USD 75 million), establishment of special economic zone (USD 300 million) and development of a BEZA special economic zone in Payra or Moheshkhali (USD 100 million).
Regarding the upcoming deal, officials believe that the Indian government wants to compete with China, which inked a huge deal of over $24 billion during its president Xi Jin Pings visit in October.
However, they pointed out that though the Chinese credit is huge, there is no guarantee that it will come immediately. Besides, the interest rate is comparatively higher.
India had provided a USD 1-billion line of credit at 1 per cent interest rate. The Chinese rate is at least 2 per cent plus London Interbank Offered Rate (LIBOR), 0.25 per cent management fee, and 0.25 per cent commitment charge.
