AIIB to provide $400m budget support to Bangladesh

The Asian Infrastructure Investment Bank (AIIB) will provide $400 million as budget support to Bangladesh.

Asian Development Bank and AIIB will provide budget support to implement the “Sustainable Economic Recovery Program (Subprogram-2),” according to a press release issued by the Economic Relations Division (ERD) on Wednesday.

ERD Secretary Sharifa Khan and Urjit R Patel, vice president of AIIB Investment Operations (Region 1) signed the agreement on behalf of Bangladesh and AIIB, respectively, on Wednesday.

The programme aims at policy reform to mitigate adverse economic conditions arising from the ongoing global economic recession following the Covid-19 pandemic and the Russia-Ukraine war. AIIB, like other development partners, has come forward with a $400 million budget support loan for the mentioned programme.

The loan will be received in the standard terms and conditions of AIIB lending. The loan repayment period is 26 years, including a three-year grace period.

The interest rate of this loan will be SOFR + Variable Spread (1.14 per cent). The front-end fee is 0.25 per cent and the Commitment Fee on the undisbursed loan amount is 0.25 per cent.

AIIB started investing in Bangladesh in 2016. To date, AIIB committed $3,037.79 million in investment projects in Bangladesh. Besides, in the last three years, AIIB provided $1,050 million as a budget support loan to Bangladesh to strengthen its Covid-affected economy. After Wednesday’s signing, the total budget support loan from AIIB stands at $1,450 million.