Govt clears $3.3b foreign loans for power, fuel imports

The government has approved around $3.3 billion in non-concessional foreign loans to modernise the country’s power distribution system and finance fuel and liquefied natural gas (LNG) imports from international markets.
The approval was granted at a meeting of the Standing Committee on Non-Concessional Loan (SCNCL), chaired by Finance Minister Amir Khosru Mahmud Chowdhury, at the Secretariat on Tuesday.
According to Economic Relations Division (ERD) sources, $200 million of the total amount will finance a new power-sector project, while the remaining $3.1 billion will be used for emergency energy imports. The committee approved a proposal to borrow $200 million from the Asian Development Bank (ADB) to finance the Power Distribution Network Enhancement Project, being implemented by the Bangladesh Rural Electrification Board (BREB) under the Power Division.
An ERD working paper states that the loan will bear an interest rate linked to the Secured Overnight Financing Rate (SOFR), with an additional spread of 0.50 percentage points.
The 25-year loan comes with a five-year grace period, a 0.10% maturity premium and a 0.15% commitment charge.

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