Bangladesh to receive first loan from BRICS New Development Bank

The New Development Bank (NDB), which is governed by the BRICS, will lend money to Bangladesh for the first time. The bank will provide USD 325 million, or roughly Tk 35 billion at the current market exchange rate, for a project to produce pure water.

The bank’s board of directors will discuss whether to approve this loan request at a future meeting. In the event that this loan is authorized, Bangladesh will next get funding from the Asian Infrastructure Investment Bank (AIIB). The Economic Relations Division (ERD) is the source of this data.

Brazil, Russia, India, China, and South Africa are the leaders of the BRICS alliance. The BRICS states formed the New Development Bank (NDB) in 2014, with all five nations serving as founding members.

But on September 16, 2021, Bangladesh joined this bank, bringing the total number of members to eight. Egypt and the United Arab Emirates joined as members in addition to Bangladesh. Uruguay is applying to join as a new member.

Two years after becoming a member of the New Development Bank, Bangladesh is set to receive a loan for the first time. The approval for this loan is expected to be granted within the next month. Bangladesh routinely seeks loans every year from four multinational lenders: the World Bank, Asian Development Bank (ADB), Islamic Development Bank, and the Asian Infrastructure Investment Bank (AIIB).

Dhaka has qualified to get a loan from the NDB for the water supply project in the amount of up to USD 320 million, according to sources with the ERD. This project will cost Tk 41.10 billion to complete, and Dhaka WASA will handle the execution.

On August 29, NDB authorized the project’s conceptual design; at this time, the board must still approve the loan proposal. The interest rate on these loans will be between two and two and a half percent, according to ERD officials.

The project’s objective is to enhance the water supply system for the 16 newly incorporated unions within the two city corporations of Dhaka. This initiative will involve the installation of new lines to connect water supply, ultimately providing 70,000 new water supply connections. Recent developments suggest that ERD has conducted a meeting with the project implementing agency regarding the financing of this venture.

ERD Additional Secretary Anwar Hossain informed Prothom Alo, stating, “Another new source of obtaining loans is the New Development Bank. Discussions are underway regarding the implementation of certain projects with the assistance of loans from this bank. These details will be finalized soon.”

Mridha Shihab Mahmud is a writer, content editor and photojournalist. He works as a staff reporter at News Hour. He is also involved in humanitarian works through a trust called Safety Assistance For Emergencies (SAFE). Mridha also works as film director. His passion is photography. He is the chief respondent person in Mymensingh Film & Photography Society. Besides professional attachment, he loves graphics designing, painting, digital art and social networking.
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