Dhaka:Finance Minister Amir Khosru Mahmud Chowdhury chaired the 46th meeting of the Standing Committee on Non-Concessional Loans (SCNCL) held at the Secretariat, where proposals for $3.3 billion in non-concessional loans were reviewed. These loans from the Asian Development Bank (ADB) and the International Islamic Trade Finance Corporation (ITFC) aim to finance a power distribution project and fuel imports.
According to United News of Bangladesh, one proposal seeks a $200 million loan from ADB to fund the Power Distribution Network Enhancement Project by the Bangladesh Rural Electrification Board (BREB). The project's total cost is estimated at $449.34 million. The ADB loan, part of the bank's ordinary capital resources, carries a six-month Secured Overnight Financing Rate (SOFR) plus a 0.50 percent spread, with a 25-year term and a five-year grace period.
The project, scheduled from October 2026 to July 2031, aims to enhance electricity distribution reliability and efficiency in 13 rural areas around Dhaka. It involves expanding substations, constructing distribution lines, and deploying new technologies.
The second proposal involves a $3.1 billion loan facility from ITFC to finance petroleum and LNG imports for fiscal year 2026-27. Of this, $2.5 billion would cover petroleum imports by Bangladesh Petroleum Corporation, and $600 million would finance LNG imports by Petrobangla. The loan has a six-month term and an interest rate of six-month Term SOFR plus 1.70 percentage points.
Initially received on August 9, the ITFC proposal was urgently placed before the SCNCL chairman and approved on August 17 for subsequent ex-post facto approval. ITFC will provide $600 million, with the remainder co-financed by Bangladesh Bank, which may roll over financing every six months.
The SCNCL reviews these proposals in compliance with the requirement for committee approval before signing non-concessional foreign loan agreements, aligning with government policy to limit non-concessional foreign debt servicing within specified thresholds.