China Eximbank agrees in principle to provide $378.4 million preferential buyer's credit for Establishing Digital Connectivity Project

China Eximbank agrees in principle to provide $378.4 million preferential buyer's credit for Establishing Digital Connectivity Project In October 2018, an agreement was signed by the Director General of Bangladesh's Information and Communication Technology (ICT) Department AKM Khairul Alam and China Railway International’s (CRIG) representative to Bangladesh Wei Xiaojun.

The agreement is aimed at implementing a digital connectivity project to deliver high-speed broadband internet across the country including remote areas. The original project scope included establishing 21 broadband access points across the country.

Once completed, the colocation facilities were expected to help in bringing high-speed broadband internet to the rural and suburban areas at a lower cost.

Apart from the broadband access points, more than 25,000 digital labs were to be established at schools and colleges across the country.

Additionally, a number of specialized labs including seven 3D labs, two robotics labs, and 50 advanced computing labs were to be set up to facilitate research on computer-aided designing, robotics, the Internet of Things (IoT), and cyber security.

Other specialized labs that were to be established include one government data lab, one vital statistics lab, and 11 VLSI labs.

In addition, a total of 100 digital villages were to be set up across the country on a pilot basis to facilitate agricultural research through ICT technologies, big data and computing.

The project scope also included the provision of IT infrastructure facilities for the Civil Registration and Vital Statistic (CRVS) program of the Cabinet Division; including fingerprint and IRIS collection devices at biometric enrollment points; and the establishment of a digital literacy center to provide remote ICT training up to upazila level all over the country.

The project as a whole -- including the broadband access points, digital literacy centre and specialized labs -- was to be controlled from the common IT platform, which was expected to be set up at a newly constructed 21-story building in Purbachal.

The 'Establishing Digital Connectivity' project was approved by the Cabinet Committee on Economic Affairs in 2018 and later the preliminary loan application was sent to the Chinese Embassy in Bangladesh on December 27, 2018.

In March 2021, an ICT Division from the Government of Bangladesh announced that the cost of the underlying commercial contract for the project was reduced from $984.7 million to $473 million, apparently to ensure easier access to China Eximbank funding (through its preferential buyer's credit window).

The scope of work under the commercial contract was reduced by (a) reducing the number of Sheikh Russel Digital Labs and specialized university labs, and (b) dropping two potentially sensitive components -- digitalizing the foreign ministry, and a Point of Interconnect for the national broadband network.

China Eximbank reportedly agreed in principle to provide a preferential buyer's credit to finance 80% of the cost of the commercial contract ($378.4 million).

Then, on November 23, 2021, the Executive Committee of the National Economic Council officially approved the revised version of the project.