Bangladesh has signed a USD 335.78 million concessional loan deal with China to expand and modernise Mongla Port. The agreement boosts Dhaka’s port capacity while reviving concerns over Beijing’s strategic footprint near India.
Bangladesh has signed a concessional loan agreement worth about USD 335.78 million with China to expand and modernise Mongla Port, its second-largest seaport after Chattogram, according to a media report on Monday. The funding will be used to build two container terminals and dedicated cargo-handling yards as Dhaka looks to increase the port’s capacity and improve infrastructure.
The loan agreement, for Renminbi Yuan 2.404 billion or Bangladeshi taka 3,592.8975 crore, was signed on Saturday between the Bangladesh government and the Export-Import Bank of China, state-run BSS reported. According to a statement by the Finance Ministry’s Economic Relations Division, China will provide the loan at a concessional interest rate of 2 per cent, with a 20-year repayment period, including a five-year grace period.
The Economic Relations Division signed the agreement with China’s EXIM Bank on behalf of the two sides for the Expansion and Modernisation of Mongla Port Facilities project, the statement said. Mongla Port is on the east bank of the Pasur River, 71 nautical miles upstream from the Bay of Bengal, and lies about 80 km west of the Indian border.
The agreement comes a year after the Muhammad Yunus-led interim government cancelled an Indian Economic Zone project planned on 110 acres of land near Mongla Port, saying the Indian government-nominated developer had failed to begin physical construction within the stipulated timeframe. The land had been earmarked for India under a 2015 bilateral agreement, and the Indian government later appointed Hiranandani Group subsidiary Evita Constructions to develop the site.
The loan deal follows an understanding reached between Bangladesh and China during Prime Minister Tarique Rahman’s visit to Beijing in June. India has previously raised concerns over China’s expanding footprint in Bangladesh, especially over projects in strategically significant areas near Indian territory, even as Dhaka moves ahead with the Mongla Port expansion.
With PTI Inputs
