Bangladesh extends loan to IsDB for constructing 2nd high-rise in Dhaka
The repayment period for the Tk175.88-crore interest-free loan will be 13 years
While Bangladesh typically relies on loans from foreign lenders for its development activities, it is now providing a loan to the Middle East-based Islamic Development Bank (IsDB).
The government will provide Islamic Development Bank-Bangladesh Islamic Solidarity Educational Wakf (IsDB-BISEW) with Tk175.88 crore in interest-free loan for the construction of its second high-rise in Dhaka — IDB Bhaban-2.
According to the Economic Relations Division (ERD), IDB Bhaban-2, which will house a 15-storey twin tower and a four-storey multi-purpose business centre, is being built in the capital's Agargaon at a cost of Tk361.25 crore.
Keep updated, follow The Business Standard's Google news channel
An official from the Finance Division, speaking on condition of anonymity, told TBS that IsDB is constructing the building for its office operations and commercial ventures in Bangladesh.
Bangladesh, as the host country, is providing the loan facility for the construction of the building, he said. "However, even though a part of the building will be used commercially, the Bangladesh government will not be given any financial benefits from it."
The official said that Bangladesh will only get the principal amount of the loan back.
According to ERD and the Finance Division, a 20-story commercial building and a four-story shopping complex were constructed at Agargaon in 1987 with IsDB funding on land leased from the Bangladesh government. Bangladeshi students receive IT training in the building.
Following the success of the first building in terms of education and other contributions, IsDB-BISEW submitted a proposal to ERD on 16 September 2020 for the construction of IDB Bhaban-2. At the same time, a loan request was made.
As the government agreed to provide the loan, an agreement was signed between the Finance Division and IDB-BISEW.
On 13 March, the Finance Division allocated Tk60 crore as the first instalment of the loan.
The rest of the loan amount is scheduled to be allocated in two instalments — Tk60 crore and Tk55,88 crore, respectively — by July 2025.
According to the loan agreement, the grace period for the loan will be three years. The loan amount will be repaid in six-monthly instalments.
The repayment period for the loan will be 13 years including the grace period, meaning that the loan amount will be repaid in 20 equal instalments over the 10 years following the 3-year grace period after the loan is taken.
