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China Eximbank pledges to provide a loan for the Akhura-Sylhet Dual Guage Line Project
| Funder | Export-Import Bank of China (China Eximbank) |
|---|---|
| Recipient Organization | Government of Bangladesh |
| Country | Bangladesh |
| Start Date | Oct 14, 2016 |
| End Date | Sep 01, 2032 |
| Duration | 5,801 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 52730 |
Grant Description
During President Xi Jinping's 2016 state visit to Bangladesh from October 14-15, a Memorandum of Understanding (MOU) was signed to finance the reconstruction of a railway track from Akhura to Sylhet.
Then, on December 27, 2017, China Railway Construction Bridge Engineering Bureau signed a commercial contract with the Bangladeshi government worth USD 1.545 billion.
The contract specifies that the project will be implemented according to the EPC model (Engineering-Procurement-Construction). The project has a total length of 176 kilometers. It includes roadbed, bridge and culvert, station yard, station building, and track construction. The construction period is estimated to be 4 and a half years.
Press releases by the implementing agency and Chinese government website suggest that the signing of the commercial contract signifies that the project will start implementation soon.
As of June 2019, press releases indicate that the project will be financed by China Eximbank either with a Government Concessional Loan (GCL) and/or a Preferential Buyer’s Credit (PBC). The exact amount and terms of financing offered by China Eximbank are not mentioned.
According to an October 2016 article from Asia News Network, the total estimated project cost was $1.87 billion, of which China Eximbank would provide $1.76 billion through a soft loan. The remainder of the funding would be provided by the Government of Bangladesh.
According to IJGlobal, China Eximbank has pledged to provide a $1.75 billion concession loan for the project, and the Government of Bangladesh has pledged to provide $120 million of equity investment for the project. As of June 2019, it appears the China Eximbank had still not made any official commitments in support of this project.
Negotiations halted between the two countries in 2020 following a request to lower costs.
However, by mid-July 2022, negotiations were revived as the Chinese expressed renewed interest in financing the project.
However, as of January 2023, it appears Bangladesh has found new financiers to fund the project and there is no evidence of Chinese involvement.
Staff Comments
Given that it is not yet clear if this project will be financed with a loan or an export buyer’s credit or both, the flow class field is set to Vague (Official Finance).
Sources & References
- Bangladesh likely to ink deals worth 6bn dollars with China, $2.76 billion Chinese fund: Bangladesh moves quickly to execute 3 projects
- Akhaura-Sylhet Dual Gauge Railway Line(176KM)
- 中企签约孟加拉国铁路改造项目
- 中国铁建签署孟加拉国铁路项目百亿合同
- 海外監管公告, 2017年度業績公告
- 中国铁建签署孟加拉国铁路项目百亿合同
- Chinese Loans Losing Shine, ভািত সিকারিি ডলাি ক্রেরডট লাইন এরিরেন্ট-২০১০ এি আওতায় চলোন প্রকরেি তারলকা রনম্নরূপ:
- Riding with the Dragon
- Uncertainty over two key railway projects goes
- Akhaura-Sylhet rail project: Negotiations resume after ERD intervention Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.
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Government of Bangladesh
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