Diplomatic Correspondent

Exim Bank of China has shown interest in providing substantial financial support for the Metro rail-2 project, which is planned to run from Gabtali to Sadarghat to Narayanganj, at an estimated cost of around Tk60,000 crore. The bank has proposed to finance Tk45,000 crore of the total cost.

This development came to light following a meeting between the Economic Relations Department (ERD) and representatives of Exim Bank of China, held at the ERD's conference room in Sher-e-Bangla Nagar, Dhaka, on Wednesday. The meeting was chaired by ERD Additional Secretary Mirana Mahrukh.

ERD sources revealed that nine projects were discussed during the meeting. Besides the metro rail, China is interested in funding a railway project from Banga to Payra Port, estimated to cost Tk41,000 crore.

Bangladesh is also seeking funds from Exim Bank of China for constructing a bridge over the Kacha River in Pirojpur and repairing the Muktarpur Bridge in Munshiganj.

Bangladesh also showed interest about Chinese loans in construction of a new bridge over the river Kocha in Pirojpur and repair of the Muktarpur bridge in Munshiganj. The other railway projects listed for Chinese loans include constructions of dual gauge rail track from Joydebpur in Gazipur to Jamalpur, broad gauge railway track from Dhalarchar in Pabna to Panchuria in Faridpur, a railway workshop in Rajbari and conversion of the metre gauge line to dual gauge from Bhairab Bazar to Mymensingh.

The meeting also touched upon obtaining a loan of $500 to $700 million in Chinese currency. Information regarding interest rates, loan durations, and grace periods for similar trade or budget support from other countries or organizations was shared by Bangladesh.

According to an ERD source, there is a possibility of forming a fund similar to the Export Development Fund with loans denominated in Yuan, enabling Bangladeshi exporters to be paid in Yuan for imports from China.

An ERD official mentioned that Prime Minister Sheikh Hasina might visit China from July 8 to 11, during which an announcement regarding Chinese loans for rail and road communication projects could be made.

China has not provided any new project loans to Bangladesh in the past year, with the last loan granted in May 2023 for the Rajshahi Wasa infrastructure development project. However, since Chinese President Xi Jinping's visit to Bangladesh in 2016, China's loans to Bangladesh have increased significantly, with $6.6 billion lent over the past 12 years and an additional $10.29 billion promised. Major projects funded by China include the Padma Rail Bridge, Karnaphuli Tunnel, and Dhaka-Ashulia Expressway. Notably, China's debt relief to Bangladesh has doubled in the past three years.