The economic zone dedicated to Indian investors is set to avail US$115 million under the third credit line from the neighbouring country, a top official said on Tuesday.
"The Indian government has recently given approval in principle for financing the zone for its investors," executive chairman of the Bangladesh Economic Zones Authority or BEZA PabanChowdhry told the FE.
India approved the finance scheme on June 11.
The project to be developed as part of Bangladesh's flagship industrial city Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram has already been approved by the ECNEC as well, Mr Chowdhury added.
Currently, final negotiation is taking place involving joint venture agreement between the BEZA and an Indian zone developer, he said.
Based on the government-to-government deal, the proposed zone spreading over 1,000 acres of land is being developed by Indian conglomerate Adani Ports and Special Economic Zone Limited. The PMO approved Adani as a developer early this year. The BEZA, an investment promotion agency under the Prime Minister's Office,had signed a memorandum of understanding with the Indian government for developing the zone in June 2015.
India has extended three lines of credit to Bangladesh amounted to $8.0 billion since 2010, according to official data. During Bangladesh Prime Minister's visit to the neighbouring country in April 2017, India extended the third credit line worth $ 4.5 billion.
The latest credit line is meant to cover projects in the areas of port construction, railways, roads, airports, power and energy, telecommunications, shipping, etc.
The development project, approved by the Executive Committee of the National Economic Council or ECNEC in April last year, was scheduled to be implemented between April 2019 and June 2021.
The total cost for the zone's infrastructure development has been fixed at $109.74 million or nearly Tk 9.19 billion. Of this $109.11 million or Tk 9.14 billion will be mobilised under the third package.
For FY 2020-2021, Bangladesh's annual development programme or ADP has allocated Tk 403.4 million for the zone construction. Of the allocation, Tk 395.1 million will be mobilised under the third lending package.
According to BEZA documents, a move is now underway to employ project management consultants under the project. To this effect, necessary documents were sent to the Indian Exim Bank on June 23.
Paban Chowdhury said once operational, the proposed country-specific zone is expected to create employment for nearly 0.1 million people and attract more than US $2.0 billion investment.
The Indian zone will receive good response for its suitable location next to Sandwip Channel and connected via a four-lane road with the Dhaka-Chattagram highway, which is considered to be the economic lifeline of Bangladesh, he noted.
The BEZA chief said the finalisation of some essential infrastructure facilities, including 24-kilometre embankment, seven sluice gates, and power plants at the industrial city has made it a coveted investment destination."Different zones in Bangladesh have already attracted a good number of foreign investors and would continue to do so," added Mr Chowdhury.