Govt to take $50m in easy loans from Belarus for equipment purchase

The government plans to take a $50 million “commodity credit” from Belarus with low interest rates for procuring maintenance equipment for city corporations.

The local government division has already had talks with the Belarus government and sent the loan proposal to the cabinet committee on economic affairs.

The rate of interest on the loan will be 1 percent and no extra service charge or fee will be applicable, according to the

proposal.

The government will have to pay 15 percent of the price of the commodities to Belarus in advance and the remaining 85 percent can be paid in 11 years, including a three-year grace period.

Alongside, the Belarus government will provide two years' warranty on the imported equipment; all maintenance cost during the period will be borne by the Belarusian exporter.

The exporter will also send engineers and mechanics to Bangladesh at its own expense to train the workers how to use the machineries.

After the expiry of the warranty period, the exporter will supply the necessary spare parts at factory price. It will also set up a service centre for providing services in this regard.

The country normally takes such credit from China, for which the rate of interest is 2 percent and various service charges are levied. The groundwork for the credit was laid in 2012 during Prime Minister Sheikh Hasina's visit to Belarus, said an official of the local government division.

An agreement was signed then for import of commodities from Belarus.

Under the agreement, Bangladesh can take a maximum of $50 million loan for importing commodity from the Development Bank of Belarus JSC.

Following the agreement, a team of the LGRD ministry visited Belarus and negotiated the loan and the types of commodities to be imported.

The LGRD proposal said its team has negotiated to buy the international standard equipment at prices much lower than in the market.

When the equipment arrives, waste management, road repairing and cleaning will be done more efficiently.

At present, there are 321 municipalities and 11 city corporations, most of which lack necessary instruments and vehicles for construction and providing service, said the proposal of the LGRD division.