The government is taking foreign loans worth about $1.06 billion on hard or rigid terms. The money will be used to implement seven major projects. The decision was taken at a meeting of the Foreign Assistance Search Committee of the Economic Relations Department (ERD) on Wednesday. The meeting also discussed how such loans can be taken at lower interest rates.

The meeting held at the NEC conference room in Sher-e-Bangla Nagar in the capital was presided over by Finance Advisor Dr. Salehuddin Ahmed. Secretary Md. Shahriar Quader Siddiqui and other officials were present at the meeting. A total of 36 foreign loan-based projects were presented for foreign assistance by various ministries and organizations. Among them, there are several projects of Chinese loans and grants. However, only seven projects have received initial approval for loans with strict conditions. Project proposals were presented.

The interest rate of rigid loans is market-based, which is higher than flexible loans. In addition, the repayment period and grace period of these loans are also relatively short. Flexible interest loans are usually not available for many important import and energy and power infrastructure projects. Then there is no option but to take such loans. Bangladesh wants to maintain the continuity of development as a middle-income country. For this reason, the sources of flexible loans are gradually shrinking. Recently, a significant part of Bangladesh's foreign debt has come from non-concessional (hard-term) loans. As easy-term loans from organizations like the World Bank or the Asian Development Bank (ADB) have decreased, it is having to resort to rigid loans.

According to sources at the meeting, a total of seven projects including the development of the capital's water supply system, a climate-resilient bridge in Mymensingh region, and the development of the power supply system in the northern region will be approved for loans. The other projects are the conversion of the Chittagong-Dohazari meter gauge railway to dual gauge, another WASA project, the Dhaka Environmentally Sustainable Water Supply Project, and the power distribution project in the northern region, namely NESCO.

Among the approved projects, five climate-resilient bridge construction projects in Mymensingh division will cost Tk 3,745 crore. Of this, Tk 2,850 crore will be provided by the Islamic Development Bank (IDB).

Of the two projects of Dhaka WASA, the Sayedabad Water Treatment Plant Project (Phase-3) will cost more than Tk 16,000 crore. The European Investment Bank (EIB) will provide a loan of Tk 11,448 crore for this project. The entire 80 million euros is a non-concessional loan. In dollar terms, the loan for this project is $ 90 million.
Another project of WASA, the Dhaka Environmentally Sustainable Water Supply Project, will cost Tk 10,973 crore. The same organization, EIB, will provide a loan of Tk 674 crore for this project as well. The entire 80 million euros is a non-concessional or hard-term loan. In dollar terms, the loan for this project is $ 90 million.

The project to convert the Chittagong-Dohazari meter gauge railway to dual gauge will cost Tk 10,797 crore. ADB is providing a loan of Tk 7,000 crore for this project. The second phase of the water supply project in Khulna will cost Tk 2,598 crore. The same organization, ADB, will provide a loan of Tk 1,821 crore for this project. Finally, the project for electricity distribution in the northern region, i.e. NESCO area, will cost Tk 1,184 crore. ADB's loan for this project is Tk 965 crore.