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20 November, 2017 00:00 00 AM
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$260m deal signed with ADB for infrastructure dev

STAFF REPORTER
$260m deal signed with ADB for infrastructure dev

The Asian Development Bank (ADB) is going to provide $260 million credit to help sustain and increase infrastructure investments in Bangladesh as well as renewable energy interventions.

In this regard, Economic Relations Division (ERD) Secretary Kazi Shofiqul Azam and Manmohan Parkash, newly appointed Country Director, ADB, signed the loan agreements yesterday afternoon on behalf of their respective sides at a ceremony at the ERD Conference Room at Sher-e-Bangla Nagar in the capital.

The assistance forms the first tranche of $526 million multitranche ADB loans for the Third Public-Private Infrastructure Development Facility (PPIDF 3). The support consists of a $500 million market-based loan to finance medium and large-scale PPP infrastructure projects, and a $26 million concessional loan to finance small and medium-sized renewable energy and energy efficiency facilities, primarily in the rural areas of the country.

The program will also be supported by a $750,000 technical assistance to further strengthen the capacity of the IDCOL.

PPIDF 3 is a continuation of the previous efforts of ADB, Government of Bangladesh and Infrastructure Development Company Ltd (IDCOL) to address the country’s infrastructure deficiencies. The project builds on ADB’s support leading to the enactment of the PPP Act and institutional support to the PPP Authority.

“The PPIDF 3 seeks to increase investments in infrastructure, including renewable energy and energy efficiency facilities, aligned with Bangladesh’s Seventh Five Year Plan, FY2016– FY2020,” said Country Director Manmohan Parkash after signing the loan agreement.

“It will also help leverage private sector investments in PPP projects to reduce pressure on direct financing from the public budget to meet the growth target”, he added.

ADB new Country Director Manmohan Parkash also said that for ADB, Bangladesh is one of the most important clients and ADB is looking forward to forge more effective partnership and cooperation with Bangladesh.

ERD Secretary Kazi Shofiqul Alam said that the foreign aid disbursement target in the current fiscal year (FY18) is around $7 billion saying, "Hopefully we will be able to achieve the target…from ADB the disbursement target is $1 billion,"

He noted with satisfaction that the foreign aid disbursement during the first quarter (July-August) period of the current fiscal year is also encouraging with $850 million which was only $450 million during the same period of the last fiscal year.

The ERD Secretary said that the foreign aid disbursement in the country's mega projects is likely to witness a rise in December with around $1 billion to be disbursed against the Rooppur Nuclear Power Plant project and the Karnaphuli Tunnel project.

About the partnership with ADB, Shofiqul Azam said, "From the very beginning, our partnership with ADB is strong and its going to be stronger in the coming days,"

He also informed that the loan agreement for the Padma Bridge Rail Link project is likely to be signed with China in this December.

Under the loan agreement, ADB will provide $260 million for the third Public-Private Infrastructure Development Facility-Tranche 1 as loan, among which $250 million will be provided from the Ordinary Capital Resources (OCR) and $10 million from concessional OCR. The OCR loan has a 20-year repayment period including a five-year grace period.

The interest rate of OCR loan is London Inter-Bank offered Rate (LIBOR)-based (LIBOR+0.5 percent). Besides, a maturity premium at 0.10 percent and a commitment fee at 0.15 percent for the undisbursed amount will be applicable for the OCR loan. The concessional OCR loan will have a 25-year repayment period including a five-year grace period with an interest rate of 2.0 percent per annum throughout the loan tenure.

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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