Govt panel gives nod to $2.6b Chinese loan

The hard-term loan committee of the government yesterday approved $2.6 billion financing for the Padma rail link project, paving the way for the signing of a deal with the Exim Bank of China next month.

A meeting of the committee was held at the conference room of the Economic Relations Division (ERD) with Finance Minister AMA Muhith in the chair. Chinese Exim Bank will provide the loan at an interest rate of 2 percent with a repayment period of 20 years, including a six-year grace period.

A finance ministry official said the loan agreement was likely to be signed in Beijing in the middle of next month. A high profile team from Bangladesh may attend the signing ceremony. The Chinese State Council, the highest policymaking body of the East Asian nation, last month gave consent for providing the loan to the project.

Of the 26 projects committed by China during its president's visit to Dhaka in 2016, the rail link is the most pressing one, receiving the highest amount of loan.