Credit agreement during Modi's Bangladesh visit

Dhaka: India is to sign the second credit agreement with Bangladesh. The projects will be fixed later. The first credit agreement of USD 1 billion was signed in 2010 and the same process will be followed this time, say officials of the foreign ministry and the economic relations division (ERD).

Of the USD 1 billion, Indian later gave USD 200 million as grant. A total of 15 projects for communication infrastructure were taken up under the credit agreement, amounting to about USD 870 million. Seven of these projects have been fully implemented and the remaining eight are expected to be completed within the next three years.

Certain officials involved in the credit agreement process with India, said that there hasn’t been any official discussions as yet with India over the amount to be given under the agreement and what sort of projects it will involve. Talks on this matter will commence after Indian prime minister Narendra Modi’s Dhaka visit.

In the meantime, Indian president Pranab Mukherjee has given his nod to the constitutional amendment bill to facilitate implementation of the land boundary agreement, 1974.

In the first week of last April when Indian external affairs secretary Sujata Mehta visited Dhaka, she put forward a proposal for new credit agreement of USD 1 billion, during talks with finance minister Abul Maal Abdul Muhith. As in the case of the first agreement, the second one too was for infrastructure.

There are speculations that Modi may have a surprise up his sleeve and announce a USD 3 billion loan agreement during his visit.

India has asked what projects Bangladesh are interested in. Bangladesh has accordingly informed India of 15 projects of the infrastructure and social sector, including power, communications, roads, railways, river transport, health, education and IT.

An official, remaining unnamed, said that India may eventually come up with a USD 2 billion loan agreement. Other than infrastructure, the social sector will be included in this loan agreement.

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