The Indian government has disbursed the fourth tranche of $25m or Tk194 crore grant to the Bangladesh government, as part of a $1bn Indian credit line for developing local infrastructures.
Indian High Commissioner Pankaj Saran yesterday handed over a cheque for $25m – the fourth instalment of the $200m grant committed by India in 2012 – to Finance Minister AMA Muhith at his Hare Road residence, according to a press release from the Indian High Commission.
Saran also briefed the minister on the latest status of 15 ongoing projects under the remaining $800m Indian line of credit, which are in different stages of execution.
The Indian diplomat also lauded Muhith for his positive response on the establishment of a special economic zone for Indian companies which would promote greater Indian investments in Bangladesh.
An official of the Finance Division told the Dhaka Tribune that with the latest $25m disbursement, India has completed disbursing $175m grant assistance to Bangladesh.
Following Prime Minister Sheikh Hasina’s landmark visit to New Delhi in January 2010, India extended the first line of credit of $1bn to Bangladesh for a range of projects that included railway infrastructure development, supply of locomotives and passenger coaches, renovation of Saidpur railway workshop, procurement of passenger vehicles including articulated buses, and river dredging.
India later wrote off $200m of the $1bn credit as grant which the Bangladesh government could use for any development project. The Bangladesh government last year decided to use the grant amount for constructing the $2.9bn Padma Bridge.
According to the deal for the $800m line of credit, Bangladesh will have to procure 85%-100% goods, services and work from the Indian market.
The state-owned rail-service provider has undertaken the highest number of 13 projects under the $800m credit line for upgrading its infrastructure and service facilities.
According to an official of Economic Relation Division, seven out of 15 projects which were undertaken under the $800m Indian line of credit, have been completed during the last three-and-a-half years.
A Finance Ministry official, seeking anonymity, told the Dhaka Tribune that Bangladesh was ready to accept India’s offer of buyer’s credit to finance big projects and was likely to sign a deal for another $1bn letter of credit during the upcoming visit of Indian Prime Minister Narendra Modi to Dhaka in December.
