Economy

Bangladesh extends loan to IsDB for constructing 2nd high-rise in Dhaka

Published: 12:55, 21 March 2024

While Bangladesh typically relies on loans from foreign lenders for its development activities, it is now providing a loan to the Middle East-based Islamic Development Bank (IsDB).

The government of Bangladesh has committed to providing Tk175.88 crore interest-free loan to the Islamic Development Bank-Bangladesh Islamic Solidarity Educational Wakf (IsDB-BISEW). This loan is designated for the construction of the second high-rise structure in Dhaka, named IDB Bhaban-2.
IDB Bhaban-2, set to be a notable addition to Dhaka's skyline, will consist of a 15-storey twin tower alongside a four-storey multi-purpose business center. The construction, slated to take place in the Agargaon area of the capital, comes with a total estimated cost of Tk361.25 crore.
This venture follows a precedent set back in 1987 when, with financial support from the Islamic Development Bank, a 20-story commercial building and a four-story shopping complex were erected in Agargaon. This previous establishment has served as a hub for IT training for Bangladeshi students over the years.
Building upon the success and contributions of the initial project, IsDB-BISEW proposed the construction of IDB Bhaban-2 to the Economic Relations Division (ERD) on September 16, 2020, simultaneously requesting a loan for the endeavor.
Upon the government's agreement to provide the loan, a formal agreement was inked between the Finance Division and IDB-BISEW. The Finance Division disbursed the initial instalment of Tk60 crore on March 13, with the remainder of the loan amount to be allocated in two subsequent instalments -Tk60 crore and Tk55.88 crore - by July 2025.
Under the terms of the loan agreement, a grace period of three years is stipulated. Subsequently, the loan amount will be repaid in bi-annual instalments over a repayment period of 13 years, including the grace period. This translates to 20 equal instalments spread over the 10 years following the initial three-year grace period.