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India, B’desh working out modalities for $1 bn soft loan

The modalities for "channeling" a USD 1 billion soft loan offered by India to Bangladesh for 14 development projects of "mutual benefit" are being finalised, according to an official in the Bangladesh Foreign Ministry.



Dhaka: The modalities for "channeling" a
USD 1 billion soft loan offered by India to Bangladesh for 14
development projects of "mutual benefit" are being finalised,
according to an official in the Bangladesh Foreign Ministry.

"The 14 projects were finalised to be implemented with
the soft Indian loan for `mutual benefit`... Works are
underway to finalise the modalities for channeling the
amount," a foreign ministry official said.

He did not give any deadline when the loan was expected
to come through.

However, the private bdnews24 news agency in Bangladesh,
quoting "highly-placed sources" in the Indian government, said
the Exim Bank would possibly sign an agreement with the
Bangladesh government within a month for utilisation of the
credit line.

The USD 1 billion line of credit was offered by Prime
Minister Manmohan Singh during the visit of his Bangladeshi
counterpart, Sheikh Hasina, to India in January this year.

It is understood that India has offered a 1.75 per cent
interest rate on the USD 1 billion loan, which would a have
25-year time limit for repayment, including five years` grace
period.

Bangladesh Finance Ministry officials said the terms and
conditions for the credit line were easier than securing a
loan from the Asian Development Bank, which charges an
interest rate equivalent to the London Inter-Bank Offer Rate
(LIBOR) plus 0.6 per cent.

Officials said both the countries will benefit from the
proposed development projects, as most of them are aimed at
achieving connectivity between Bangladesh and India through
the development of Bangladesh`s railway infrastructure.

Bangladesh earlier submitted 29 projects to India for
utilising the USD 1 billion loan.

However, the two sides, at a recent meeting held in New
Delhi, reviewed the 29 projects and finalised 14 for
implementation.

The joint communique issued after Hasina`s talks with her
Indian counterpart, Manmohan Singh, announced that the USD 1
billion loan would be used for a range of projects, including
railway infrastructure, supply of locomotives and passenger
coaches, rehabilitation of a railway workshop, procurement of
buses and river dredging.

PTI

From Zee News

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