Bangladesh signs $1.13bn deal with China for Dhaka-Ashulia expressway

Bangladesh has signed a nearly $1.13 billion loan deal with China for the construction of an elevated expressway linking Dhaka and Ashulia.

The 24-kilometre expressway will be constructed from Shahjalal International Airport to Dhaka Export Processing Zone near the Nabinagar-Chandra Highway via Abdullahpur, Ashulia and Baipail.    

China will fund 65 percent of the estimated cost of the project under Preferential Buyer’s Credit. Bangladesh will have to repay within 20 years, with 2 percent interests and a grace period of five years.

“The important deal was signed through correspondence between the two countries due to the COVID-19 pandemic,” Masuma Akter, deputy secretary at the Economic Relations Division, said on Thursday.  

Bangladesh prepared and signed the documents first and then sent to China. The Chinese authorities sent back the papers on Tuesday after signing, she explained.  

Md Shahriar Kader Siddiky, additional secretary at the ERD, and Zhang Tiankin, deputy general manager of the Exim Bank of China, signed the deal, according to a statement from the ERD.

Usually loans under PBC facility stipulates some conditions, such as procurement of products and services from the lender. ERD officials did not respond to questions about these details of the deal.

Bangladesh and China signed memoranda of understanding worth around $21 billion for the financing of 27 projects during Chinese President Xi Jinping’s Dhaka visit in 2016.

China already signed deals on $7.8 billion credit for eight projects following the MoUs.

Thursday’s exchange rates put the latest deal at Tk 94.72 billion. The estimated cost of the Dhaka-Ashulia expressway project is over Tk 169 billion.

The government approved the project in October 2017 to ease traffic jams on the ways to 30 districts in the north and west. The construction was supposed to end in June 2022 but it took time to launch the project due to the delay in signing the deal with China.

Road Transport and Bridges Minister Obaidul Quader recently said the problems in funding the project were solved through communications with the Chinese authorities. The minister opened the piling work of the project last month.

He said the new deadline for the completion of the project has been set at June 2026.