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Published on December 16, 2014
The €45 million “soft” loan under a €60 million financial package for improving power transmission system in the country’s western zone was signed on Monday at the Economic Relations Division.
German usually does not offer loan to Least Developed Countries..
“I have to say this is an exceptional case,” Lisa Steinacher, director special programme of the German Development Bank (KfW), said after the signing.
She said they had been observing “very closely” Bangladesh’s sector development programmes and understood that Bangladesh had the capacity to repay the loan by generating incomes.
Additional Secretary to the ERD Abul Mansur Md Faizulla, who signed the agreement on behalf of Bangladesh, said it was an effort to “diversify Bangladesh’s loan sources”.
The loan carries 2.49 percent interest rate and has to be repaid in 16 years including five years of grace period.
“In our calculation the proposal is soft in nature,” Faizulla said. The financial package also includes €15 million grants.
He said the government also considered Germany’s propensity to transfer technologies to countries like Bangladesh before the signing.
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