Bangladesh on Wednesday signed a $ 4.5 billion third line of credit (LoC) deal with India to be spent for its infrastructure development.
The new Indian LoC will be used to fund 17 major projects in Bangladesh, which include electricity, railroads, roads, shipping and ports, officials said.
Economic Relations Division Secretary Kazi Shofiqul Azam and Managing Director of the Export-Import Bank of India (Exim) David Rasquinha signed the deal behalf of their respective sides.
Finance Ministers of Bangladesh and India A.M.A Muhith and Arun Jaitley witnessed the signing ceremony held at the Bangladesh Secretariat in the morning.
India offered Bangladesh the third LoC during Bnagladesh Prime Minister Sheikh Hasina’s New Delhi visit in April.
Under the agreement, Bangladesh will 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 new LoC.As with previous LoC agreements, Bangladesh will pay an interest rate of 1 per cent a year. It will have 20 years to pay back the loans, with a grace period of five years.
“Bangladesh has developed significantly on the socio-economic front in the past seven years. 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,” said Jaitley following the signing ceremony.
Speaking on the occasion Muhith said, “Bangladesh and India have excellent relations at the moment. “They stood by us during our independence. We hope they will continue to do so in the future.”
The Indian Finance Minister arrived in Dhaka on Tuesday afternoon to witness the signing ceremony. He was accompanied by a group of business leaders and senior officials on the three-day visit.
According to the tour schedule, Jaitley would call on the Bangladesh premier and inaugurate along with his counterpart a new scheme for cashless transactions in visa services, run by the State Bank of India on behalf of the Indian High Commission here.
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Earlier, Bangladesh signed two LoCs with India. The first LoC was signed in August 2010 while the second one in March 2016.
Some projects under the first LoC of $ 862 million faced delay implementation while the physical works of the 14 projects under the second LoC of $ 2 billion were yet to start.
