Delhi yet to confirm $4.5b third LoC

FHM Humayan Kabir | Published: August 15, 2017 03:36:09 | Updated: October 21, 2017 03:21:44

India is yet to confirm its third line of credit (LoC) worth US$4.5 billion credit (LoC) despite Bangladesh's request for holding a meeting on this issue, officials concerned said Monday.

Officials said although India assured Bangladesh of providing the loan during the visit of Prime Minister Sheikh Hasina to New Delhi in April last, the lender is delaying signing of the final agreement on the promised loan.

"We have reminded New Delhi about holding negotiations on the third LoC. But they are yet to fix any date for negotiations. This has delayed the confirmation of the loan," said a Ministry of Finance (MoF) official.

He told the FE they had primarily selected 17 development projects for execution with the third Indian LoC. But the process is now stalled due to delay in the loan confirmation.

The MoF official said soon after completing negotiations, the two sides will sign a loan deal.

During the visit of Prime Minister Sheikh Hasina to India on April 8, Delhi and Dhaka signed an MoU for the 3rd LoC.

Another official at the MoF said: "We are waiting for the draft of the loan deal from India. When we get it, we will take preparation for negotiations with New Delhi."

Earlier, India confirmed two LoCs for facilitating Bangladesh's development, especially for improvement of infrastructure for setting up cross-border transportation links.

In August 2010, India offered Bangladesh first LoC worth $862 million under which it undertook 15 projects. Out of the 15, eight projects had already been completed and the remaining seven are in the process of execution.

Besides, the neighbouring country signed the second $2.0 billion LoC in March 2016 under which some 14 projects have been taken up for execution.

The MoF official said setback in the way of implementing some projects under the first LoC could affect confirmation of the 3rd LOC.

Although the first LoC was signed seven years ago and some projects are yet to be completed, the lender could delay its third $4.5 billion LoC for Bangladesh, he added.

Most of the schemes under the $2.0 billion second LoC are yet to be started, he added.

Meanwhile, the government has selected some 17 projects including construction of 4-lane road from Benapole-Jessore-Narail-Bhatiapara-Bhanaga; 4-lane road from border Ramgarh to Baruirhat and 4-lane road from Mynamati (Comilla)-Brahmanbaria-Sarail for implementation under the third Indian LoC.

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