A delegation led by Khosru scheduled to visit South Korea on 1-5 November.
Flags of Bangladesh and South Korea. Illustration: Freepik
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Flags of Bangladesh and South Korea. Illustration: Freepik
Highlights:
- Bangladesh seeks to expedite $9.302 billion in Korean loan commitments for 23 projects
- Finance Minister Amir Khosru will lead a delegation to South Korea on 1-5 November
- The government wants expanded financing beyond the existing $3 billion framework
- South Korea offers concessional loans at 0.01%-0.05% interest
- Bangladesh will seek $1.4 billion for MRT-5 Southern Route
- Loan negotiations worth $2.125 billion are under way for MRT-4
Bangladesh will prioritise securing additional loans on concessional terms from South Korea during an upcoming visit by a delegation led by Finance Minister Amir Khosru Mahmud Chowdhury.
The high-level delegation is scheduled to visit South Korea on 1-5 November to hold crucial meetings with the Korea Exim Bank, business bodies, and the Korea International Cooperation Agency (KOICA), among other key stakeholders.
According to Economic Relations Division (ERD) officials, the government wants to expedite loan commitments totalling $9.302 billion for 23 major projects currently proposed for Korean financing, including MRT 4 and 5, Cox’s Bazar airport’s Phase 2, Railway, e-buses, hospitals.
More than 20 projects remain in the pipeline for Korean funding. However, because South Korea’s loan approval and implementation processes are relatively slow, accelerating commitments for these initiatives will form the core agenda of the visit.
Infograph: TBS
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Infograph: TBS
Officials noted that the government is eager to expand development cooperation with South Korea due to the highly favourable terms offered through its Economic Development Cooperation Fund (EDCF). South Korea’s concessional loans carry minimal interest rates of 0.01%-0.05%, 40-year repayment periods featuring a 15-year grace period, and a modest 0.1% service charge.
Bangladesh currently operates under a $3 billion framework arrangement with South Korea for 2023-2027. Because the proposed financing requirements far exceed this existing envelope, the delegation will push for an expanded financial package and streamlined project-level approvals.
$1.4b for MRT-5 Southern Route
Bangladesh will seek a final $1.4 billion loan commitment from South Korea to co-finance the recently approved MRT-5 Southern Route, according to ERD officials.
The $4.9 billion project has already received an indicative financing commitment of $3 billion from the ADB. South Korea has also expressed interest in joining as a co-financier.
South Korea is also considering financing several other major infrastructure projects in Bangladesh through its concessional lending facilities under the EDCF, officials said.
Loan negotiations worth $2.125 billion are under way with the EDCF for MRT-4, officials said.
Other transport projects include a $1.352 billion bridge over the Meghna River on the Shariatpur-Chandpur road and a $319.45 million bridge on the Matlab North-Gazaria road.
Railway and public transport
Other proposals include $656.1 million for 60 metre-gauge diesel-electric locomotives, $211.76 million for 46 locomotives and $173.68 million for 300 metre-gauge carriages.
Another $90.05 million is proposed for single-decker air-conditioned electric buses , while $163.4 million in loans is under discussion for electric buses for the bus rapid transit system. Bangladesh Railway also plans to procure 260 passenger carriages with a $203.14 million.
The EDCF is providing a $47.62 million loan to establish the Dhaka WASA International Training and Research Institute (DITRI). Separately, the Korea Water Resources Corporation will implement a pilot smart water management project in Dhaka with a $2.72 million grant.
Healthcare, sanitation projects
The government has proposed a $246.38 million loan for a super-specialised hospital and $214.26 million to set up the National Institute of Geriatric and Physical Medicine.
Other projects in the pipeline include $562 million for the Uttara Sanitation Improvement Project, $620 million for the Gandharbpur Water Treatment Plant Phase II and $191.43 million for a sewerage project in the Foy’s Lake catchment area of Chattogram.
Bangladesh will also likely seek $700-800 million for the second phase of Cox’s Bazar airport and around $640 million for a data-driven land governance system.
Cepa with Korea to be discussed
Bangladesh is moving towards signing a Comprehensive Economic Partnership Agreement (Cepa) with South Korea, with the government taking steps to expedite the process. ERD officials said the Cepa would be discussed bilaterally during the finance minister’s visit.
Formal working-level negotiations are completed. The conclusion of the negotiations was officially announced on 4 August in the presence of the trade ministers of both countries.
According to relevant officials at the commerce ministry, a Trade Negotiation Committee was formed under mutually agreed terms of reference, covering 14 sectors.
The government now wants further steps to expedite the signing of the deal as part of its priority agenda. Once signed, the Cepa is expected to create opportunities to expand bilateral trade in goods and services, boost investment and deepen economic cooperation.
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