Dhaka – The government on Wednesday signed a 4.5 billion dollar credit deal with India to implement key infrastructure projects in Bangladesh, officials said.
Seventeen priority infrastructure projects, including electricity, railways, roads, shipping and ports, will be covered by the third Line of Credit to Bangladesh from India.
Bangladesh has to pay 1 per cent interest rate and pay back the loan in 20 years, with a five years moratorium, according to the agreement.
The loan deal was signed by Bangladesh’s Economic Relations Division Secretary Kazi Shofiqul Azam and Managing Director of the Export-Import Bank of India David Rasquinha.
Indian Finance Minister Arun Jaitley, who is now in a visit to Bangladesh, and his Bangladeshi counterpart Abul Maal Abdul Muhith witnessed the signing of the deal at the Ministry of Finance.
The two finance ministers also hold a meeting to discuss bilateral economic cooperation between India and Bangladesh.
“Connectivity is crucial to the success of our bilateral development partnership, sub-regional economic cooperation and economic prosperity in the region,” said Jaitley.
The line of credit to Bangladesh would help increase bilateral trade and foster people-to-people contacts between the two countries, he said.
“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.”
The 4.5 billion loan for Bangladesh was announced during Bangladeshi Prime Minister Sheikh Hasina’s visit to New Delhi in April this year.