Bangladesh signs $200m loan deal with AIIB

TBS report

May 01, 2022, 10:50 a.m.

Last modification: May 01, 2022, 10:57 a.m.

FILE PHOTO: The sign of the Asian Infrastructure Investment Bank (AIIB) is pictured at its headquarters in Beijing, China July 27, 2020. REUTERS/Tingshu Wang/File Photo

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FILE PHOTO: The sign of the Asian Infrastructure Investment Bank (AIIB) is pictured at its headquarters in Beijing, China July 27, 2020. REUTERS/Tingshu Wang/File Photo

The Government of Bangladesh signed a $200 million loan agreement with the Asian Infrastructure Investment Bank (AIIB) on April 26, 2022 to implement the “IDCOL Multi-Sector Lending Facility Project”.

Deputy Secretary of Economic Relations Division, Md Shahriar Kader Siddiky, and AIIB Managing Director of Investment Operations, Dong Ik Lee signed the loan agreement on behalf of Bangladesh and AIIB respectively , according to a press release.

The objective of the project is to promote infrastructure investment by providing long-term financing to the private sector in Bangladesh.

It is aligned with Bangladesh’s goal of closing its infrastructure gap and achieving sustainable growth, as outlined in the Bangladesh Perspective Plan 2021-2041.

The project will be financed by a loan to Bangladesh, which will be on-lent to Infrastructure Development Co. Ltd (IDCOL). IDCOL will further on-lend the amount to private companies (sub-borrowers) in Bangladesh to support eligible infrastructure projects, the press release adds.

The project will provide IDCOL with additional resources for long-term financing, given the huge market needs and the need to increase the availability of long-term financing for infrastructure projects in Bangladesh.

The loan will be received under the standard terms and conditions of the AIIB. The repayment term of the loan is 18 years including 5 years of grace period. The initial fee payable is 0.25% and the commitment fee is 0.25% per annum for the amount not withdrawn.

The interest rate on the loan will be 0.60% + the AIIB’s (variable) borrowing cost margin.

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