Bangladesh entered a heavier debt-repayment cycle in July-October even as its largest bilateral partners refrained from making new loan commitments.

India, China, Russia and Japan made no fresh pledges during the first four months of the 2025-26 fiscal year, meaning no new projects funded by these partners reached final agreement in that period, according to the latest update from the Economic Relations Department (ERD).

Although these major lenders did not issue new commitments, they continued disbursing funds for previously approved loans and ongoing projects.

The Asian Infrastructure Investment Bank (AIIB) also made no new commitments during the July-October period, the ERD’s provisional external debt report published on 30 November shows.

The pause comes at a sensitive moment for the country’s development-financing landscape. Bangladesh received US$1.21 billion in total loan commitments in the first four months of FY26, a sharp increase from $254.6 million during the same period last year, marking a 375% year-on-year surge.

The rebound reflects the resumption of negotiations and project pipelines that had stalled amid the political turmoil during the July-September 2024 Mass Uprising.

Multilateral lenders drove the renewed commitments this year. The Asian Development Bank (ADB) pledged about $580 million, the World Bank committed $12.5 million, while other development partners together pledged around $615 million.

Compared to last year, commitments in the July-October period are higher by nearly $1 billion, signalling renewed donor confidence and a recovering disbursement pipeline.

Disbursements also picked up. Bangladesh received about $1.6649 billion in foreign loans during July-October 2025, up from $1.202 billion in the same period of FY25, a rise of 38.5%.

Russia was the largest disbursing partner, releasing $407.7 million for the Rooppur Nuclear Power Plant. The World Bank followed with $405.2 million, while ADB disbursed nearly $250 million. China released $190 million, and both India and Japan disbursed around $80 million each.

However, rising inflows have been almost matched by rising repayments. Bangladesh paid back $1.5851 billion in principal and interest during the July-October period, compared to $1.4379 billion a year earlier, an increase of 10.23%. Of this, about $1.02 billion went toward principal and $560 million toward interest.

The surge in principal payments – up roughly 14.4% – is significantly sharper than the 3.4% rise in interest payments.

ERD officials say the growing repayment burden reflects the end of grace periods on major development and budget-support loans taken during the country’s rapid infrastructure expansion over the past decade.

As those loans mature, a larger share of Bangladesh’s foreign financing is now flowing back out in repayments, limiting the immediate impact of new inflows on development spending.