Dhaka seeks faster Korean loan approvals
Bangladesh is seeking to expand its concessional loan arrangements with South Korea to finance a pipeline of 23 major infrastructure, transport, healthcare and water management projects worth $9.302 billion.
A high-level delegation led by Finance Minister Amir Khosru Mahmud Chowdhury will visit South Korea from November 1 to 5 to pursue fresh financing commitments, expedite pending project approvals and strengthen bilateral economic cooperation.
The delegation is scheduled to meet officials
of the Korea Exim Bank, the Korea International Cooperation Agency (KOICA) and business organisations, among other stakeholders.
According to Economic Relations Division (ERD) officials, the government wants to accelerate financing commitments for projects including MRT-4 and MRT-5, the second phase of Cox’s Bazar airport, railway modernisation, electric buses and hospitals.
More than 20 projects remain in the pipeline for Korean financing.
However, South Korea’s relatively lengthy loan approval and implementation procedures have slowed progress, making faster commitments a key agenda of the visit.
Officials said Bangladesh was keen to expand cooperation with Seoul because of the favourable terms offered under South Korea’s Economic Development Cooperation Fund (EDCF).
The concessional loans carry interest rates of 0.01 to 0.05 per cent, repayment periods of 40 years, including a 15-year grace period, and a service charge of 0.1 per cent.
Bangladesh currently has a $3 billion framework arrangement with South Korea for 2023-2027. As the proposed financing requirements exceed the existing allocation, Dhaka will seek an expanded financial package and faster project-level approvals.
$1.4b for MRT-5
Bangladesh will seek a final $1.4 billion loan commitment from South Korea to co-finance the recently approved MRT-5 Southern Route, ERD officials said.
The $4.9 billion project has already secured an indicative $3 billion financing commitment from the Asian Development Bank (ADB), while South Korea has expressed interest in joining as a co-financier.
Loan negotiations worth $2.125 billion are also under way with the EDCF for MRT-4.
Other transport proposals include a $1.352 billion bridge over the Meghna River on the Shariatpur-Chandpur road and a $319.45 million bridge on the Matlab North-Gazaria road.
The railway sector is seeking $656.1 million for 60 metre-gauge diesel-electric locomotives, $211.76 million for another 46 locomotives and $173.68 million for 300 metre-gauge carriages.
Proposals also include $90.05 million for single-decker air-conditioned electric buses, $163.4 million for electric buses under the bus rapid transit system and $203.14 million for 260 passenger carriages.
Hospitals, water management
The government has proposed $246.38 million for a super-specialised hospital and $214.26 million for the National Institute of Geriatric and Physical Medicine.
Other proposals include $562 million for the Uttara Sanitation Improvement Project, $620 million for the second phase of the Gandharbpur Water Treatment Plant and $191.43 million for a sewerage project in the Foy’s Lake catchment area of Chattogram.
Bangladesh is also expected to seek $700-800 million for the second phase of Cox’s Bazar airport and around $640 million for a data-driven land governance system.
Meanwhile, the EDCF is providing a $47.62 million loan for the Dhaka WASA International Training and Research Institute, while the Korea Water Resources Corporation will implement a pilot smart water management project in Dhaka with a $2.72 million grant.
Cepa on agenda
The proposed Comprehensive Economic Partnership Agreement (Cepa) with South Korea will also feature in the discussions, as Bangladesh seeks to expedite its signing.
Formal working-level negotiations have been completed, with their conclusion officially announced on August 4 in the presence of the trade ministers of both countries.
A Trade Negotiation Committee was formed under mutually agreed terms of reference covering 14 sectors, according to Commerce Ministry officials.
The government wants to accelerate the remaining steps towards signing the agreement, which is expected to expand bilateral trade in goods and services, attract investment and deepen economic cooperation.
