China Provides $7.39 Billion in Development Since 1999
Graphics: Agamir Somoy
China’s partnership in the development of Bangladesh continues to grow, with the country releasing $7.39 billion or around Tk 88,680 crore for various projects over the last 26 years.
According to the latest report from the Economic Relations Division (ERD) titled “Flow of External Resources into Bangladesh,” this funding includes $7.2636 billion or Tk 87,163.02 crore in loans and $101.3 million or Tk 1,215.60 crore in grants.
The report covers the period from the 1999-2000 fiscal year to the 2024-25 fiscal year.
The bilateral relationship transformed into a strategic partnership following Chinese President Xi Jinping’s visit to Dhaka on 14 October 2016. During that visit, both nations signed agreements for various loan assistances and investments totaling $20 billion.
An ERD official told Agamir Somoy that authorities signed Memorandums of Understanding (MoUs) for around 27 projects during that visit. Of these, 10 to 12 projects have been completed, while five remain under implementation.
The “Padma Bridge Rail Connection,” a major mega-project costing Tk 39,246 crore, is nearing completion with a Chinese loan of approximately $2.76 billion or Tk 25,000 crore.
While ongoing projects face no major complexities, the ERD official noted that the lengthy time required for Chinese loan approval remains a significant hurdle.
He said that China takes considerable time to verify and examine information. Although interest rates previously ranged between 2 percent and 3 percent, there is now pressure to revise the terms of Preferential Buyer’s Credit (PBC) loans.
If these revisions are accepted, interest rates could reach nearly 5 percent, accompanied by stricter conditions.
Data shows that over the past 26 years, China has committed a total of $10.2918 billion or Tk 1,23,501 crore to Bangladesh’s development. This commitment consists of $9.8096 billion or Tk 1,17,715 crore in loans and $455.7 million or Tk 5,468.4 crore in grants.
Dhaka-Ashulia Elevated Expressway project is progressing with a Tk 9,472 crore loan from China’s EXIM Bank.
Although the 24-kilometer elevated road from the Airport to the EPZ was scheduled for completion this month, it reached only 70 percent progress by May, prompting efforts to extend both the project’s duration and budget. The project’s total cost is Tk 17,553 crore.
Moreover, China has provided significant loans for other major initiatives, including around Tk 11,924 crore for the DPDC distribution system development project, around Tk 13,695 crore for the PGCB power grid network project, Tk 2,313 crore for the Rajshahi WASA water treatment plant, and Tk 2,486 crore for the purchase of four ships for the Bangladesh Shipping Corporation (BSC).
According to the ERD report, China ranks fifth among development partners, contributing 7 percent of foreign financing in Bangladesh.
World Bank’s IDA leads the list with 29 percent, followed by the Asian Development Bank (ADB) at 23 percent, Japan at 18 percent, and Russia at 11 percent. Other development partners contribute a combined 7 percent, while India provides 2 percent, and the IDB, IFAD, and South Korea each contribute 1 percent.
