BD yet to get any loan from NDB

Bangladesh has not received any project loan from the BRICS-initiated New Development Bank (NDB) - even after two years of joining the entity, insiders said on Monday.

Bangladesh obtained the NDB's first membership in September 2021 after the five BRICS founder-nations (Brazil, Russia, India, China, and South Africa). But the Shanghai-based lender is yet to approve any loan for the country, they added.

Bangladesh also applied for joining the BRICS, a new economic bloc outside the western world. Prime Minister Sheikh Hasina is joining the BRICS summit in Johannesburg, South Africa, on August 22-24.

Bangladesh earlier sought at least US$1.50 billion worth of funds from the NDB for six projects, said officials.

A senior Economic Relations Division (ERD) official said they started talks with the NDB a few months back regarding the project financing.

"A few months back, we've started working on a big project to improve water supply system in Dhaka, expecting some $235 million loan. But the NDB is yet to finalise it."

Bangladesh submitted preliminary project proposal for the water supply project, another ERD official said.

"We've also sought loans worth nearly $1.25 billion from the NDB for some five other projects," he added.

Among the proposed assistance, the Bridges Division sought $978 million for construction of the Payra Bridge and the Bishkhali Bridge.

Other proposed fundings included $83 million for a water supply project in Rajshahi, $115 million for a 120-MW solar power plant at Raipura, and $112 million for power distribution in the Northern Electricity Supply Company (NESCO) area.

The senior ERD official said, "The NDB does not have an office in Bangladesh. The lender communicates with us from its regional office in India and the headquarters in Shanghai. So it is taking some time to finalise the proposed loans for Bangladesh."

"The ERD secretary also requested the NDB to finalise our funding proposals during the sideline meetings when she joined the multi-lateral bank's annual meeting in Shanghai in May," he added.

Meanwhile, insiders said lack of capacity to formulate bankable development projects is a major obstacle to attain the NDB's financing.

The ministries and divisions concerned are not that interested in the NDB-financed development schemes. The lender, unlike the World Bank or the Asian Development Bank, does not assist in preparing project proposals and reports, they added.

Bangladesh joined the NDB - considering it an additional and alternative source of funding, as the country needs huge investments for improving its education and health services along with infrastructures.

The NDB has so far approved loans worth nearly $30 billion for some 80 projects. The bank will disburse $30 billion more in the 2022-26 period, according to its new five-year lending strategy.

The NDB offers loans with floating interest rates, ranging from the Secured Overnight Financing Rate (SOFR) plus 1.30 per cent to 1.65 per cent spread, with a front-end fee of 0.25 per cent and a commitment fee of 0.65 per cent.

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