Bangladesh has signed USD$2.1 billion loan agreement with International Islamic Trade Finance Corporation (ITFC) on Tuesday to support the smooth import of petroleum fuel and LNG.
Dhaka has signed the deal at the time when it is suffering green back shortfall due to upward trend of loan repayment compared than that of remittance flow.
Jedda-based ITFC chief operation officer (COO) Nazeem Noordali and Energy and Mineral Resources Division secretary M Nurul Alam signed an agreement in this regard under Arabic calendar year 2024 and 2025 on Tuesday at the Bangladesh Secretariat.
State minister for power and energy Nasrul
Hamid was present at the major loan deal.
The repayment period of the loan has been fixed for one year with an interest rate to be calculated with secured overnight financial rate (SOFR) and two percent fixed rate.
The ITFC is a member of the Islamic Development Bank (IDB) Group and it is providing the loan after accumulating it from different organisations. Of this, Bangladesh Bank will provide $800 million.
Under the credit agreement, the ITFC will finance state-owned Bangladesh Petroleum Corporation (BPC) to import petroleum fuels and state-owned Petrobangla to import liquified natural gas (LNG).
At the signing function, Nasrul Hamid said that Bangladesh has been receiving financial support from the ITFC of Islamic Development Bank for long.
He said this credit support will help the government to smoothly import the petroleum fuel and LNG.
He said that $1.6 billion will be utilised to import the petroleum fuels while remaining $500 million will be used to import LNG.
According to official of energy and mineral resources division, Bangladesh secured $1.4 billion from ITFC last year.
