A Decade on, Half of China’s $20 Billion Pledge Enters Aid Pipeline
A decade on half of China – In 2016, President Xi Jinping’s landmark visit to Dhaka marked a pivotal moment, with Beijing committing approximately $20 billion in loans and assistance over four years. This was the largest single-country contribution to Bangladesh’s development, occurring as China sought to expand its influence in South Asia, while India pursued similar goals. Ten years later, about half of the pledged funds have been allocated to Bangladesh’s foreign aid initiatives.
Approval Delays Slow Project Rollout
Of the 13 projects initially agreed upon, nine were approved prior to the onset of the pandemic in 2020. Since then, progress on new approvals has significantly lagged. A finance ministry official noted that China grew more cautious about new loans post-pandemic, citing Bangladesh’s severe foreign exchange shortage and mounting economic challenges.
“The process is even longer in China,” said a finance ministry official, speaking to The Daily Star on condition of anonymity. “If Chinese authorities disagree with or seek clarification on any part of the project documents, the files are often returned to Bangladesh for revision, forcing the process to start again.”
Additionally, bureaucratic hurdles on both sides have hampered the speed of fund disbursement. Officials attributed this to capacity constraints at China’s Exim Bank, where a limited number of staff manage overseas lending, as well as lobbying by competing Chinese firms vying for development contracts.
Seven Projects Completed, Six Under Way
From the 13 projects, seven have been finalized, while six are still in progress. Completed initiatives include the Padma Bridge Rail Link, the Karnaphuli River Tunnel, Phase III of the Info-Sarkar project, the Telecommunication Network Modernization for Digital Connectivity, the Tier-IV National Data Centre, the procurement of six new vessels, and the Dasherkandi Sewerage Treatment Plant.
Of the ongoing projects, key ones include the Power Grid Network Strengthening initiative under PGCB, the Expansion and Strengthening of the Power System Network under the DPDC Area Project, the Dhaka-Ashulia Elevated Expressway, and the Rajshahi WASA Surface Water Treatment Plant. The Single Point Mooring with Double Pipeline project in Maheshkhali was completed but remains uncommissioned due to contractor-related setbacks.
Prime Minister’s Maiden Beijing Visit
Bangladesh is set to pursue Chinese funding for three major projects during Prime Minister Tarique Rahman’s upcoming trip to the Chinese capital. The latest framework agreement for the procurement of four new vessels features concessional financing at a 2% interest rate, with a 20-year repayment period and a five-year grace period.
