Govt signs $800m loan agreement with ADB, AIIB
The government signed an $800 million budget support loan agreement with the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) on Wednesday.
These two lending agencies will each contribute $400 million under the Sustainable Economic Recovery Programme (Subprogramme-2).
Sharifa Khan, secretary of the Economic Relations Division (ERD), signed the loan agreements on behalf of Bangladesh with the ADB and AIIB.
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The ADB's loan agreement was signed by Edimon Ginting, country director of the agency's Bangladesh mission.
On the other hand, Urjit R Patel, vice president, Investment Operation (Region 1) of the AIIB, signed on behalf of his organisation.
The Sustainable Economic Recovery Programme aims at policy reform to mitigate adverse economic conditions arising from the ongoing global economic recession following the Covid -19 and Russia-Ukraine crisis.
The ADB and the AIIB like other development partners came forward with $800 million budget support for the programme, according to the ERD.
According to an ERD press release, the Finance Division along with the financial institution division, the National Board of Revenue, the Bangladesh Bank, the Programming Division and Central Procurement Technical Unit (CPTU) have formulated the Sustainable Economic Recovery Programme.
The programme's scope includes strengthening public financial management systems and improving access to finance for underserved market segments, as per the press release.
The ADB budget support will carry an interest rate of the Secured Overnight Financing Rate SOFR rate plus 0.5%, along with a commitment fee of 0.15%. The repayment period for this loan is set at 15 years, with a grace period of three years.
On the other hand, the interest rate for the AIIB loan will be calculated based on the SOFR rate plus a variable spread (1.14%). The commitment fee for this loan will be 0.25%, along with a front-end fee of 0.25%. The repayment period for the AIIB loan is 26 years, with a grace period of three years.
