China expected to lend Bangladesh $40 billion during President Xi Jinping's Dhaka visit

Bangladesh is hoping to get tens of billions of dollars in loan from Beijing during Chinese President Xi Jinping's impending visit to Dhaka.

“Loan agreements of a record amount will be signed," State Minister for Finance and Planning MA Mannan told bdnews24.com on Thursday ahead of the Chinese leader's visit scheduled on Oct 14.

Mannan would not disclose the total amount of credit.

A senior official of the finance ministry, however, indicated that the amount could be in the region of $40 billion.

The conditions and the interest rates have not been set yet, the official told bdnews24.com on condition of anonymity.

The Chinese president will make a short visit before his travel to India for BRICS summit on Oct 15.

Xi Jinping

Chinese Ambassador in Dhaka Ma Mingqiang at a seminar recently said the visit would take the Dhaka-Beijing relations to “a new height”.

Bangladesh, which is always a supporter of Beijing’s core issues, including the ‘one China’ policy, is expecting China as a partner of its infrastructure development.

State Minister for Foreign Affairs Md Shahriar Alam at that seminar on Oct 3 presented a list of what Dhaka wants from China, in which funds for project financing and substantive investment was the number one priority.

The state minister for finance on Thursday told bdnews24.com that China expressed its willingness about extending the loans after seeing the “possibilities” that lie in Bangladesh.

"The prime minister's leadership has brightened Bangladesh's image in the world. Bangladesh is a development surprise to the world," he said.

A former Bangladesh Bank governor Muhammad Farashuddin, however, advised the government to keep the loan conditions “soft”.

"We need big loans now for big infrastructures in order to build a developed Bangladesh within 2041,” he told bdnews24.com.

This file photo of Aug 22 2016 shows officials signing a deal during Bangladesh-China Joint Commission meeting.

At least 21 projects on communication, power, fuel, information technology, industries and development of living standards are being discussed for Chinese support.

Those include four each on railways and road transport and power sectors, five on improving standard of life, two on industries, and one each on fuel and ICT.

Of these projects, the estimated loan to come for the Padma Bridge rail link project is $2.57 billion, Dhaka-Chittagong railway project $3.03 billion, Dhaka-Ashulia elevated expressway $1.39 billion, Sitakunda-Cox's Bazar marine drive expressway and coastal protection project $2.85 billion and four-lane Dhaka-Sylhet highway project $ 1.6 billion.

The projects on the list also include $2.3 billion expansion and strengthening of power system network under the DPDC and $1.32 billion power grid network-strengthening project under the PGCB.

The ICT project that is likely to get $1 billion credit from China is about establishing digital connectivity.