STAR BUSINESS REPORT

The government yesterday signed a $400 million loan agreement with the Asian Infrastructure Investment Bank (AIIB) as budget support.

The financing agreement aims to implement the “Climate Resilient Inclusive Development Program – Subprogram 2” and help Bangladesh strengthen its institutional capacity for addressing climate change through a range of targeted policy reforms, according to a press release.

The agreement comes following recent budget supports worth $1.92 billion from institutions like the Asian Development Bank, the World Bank, and others.

Initiated by the Finance Division, the programme focuses on three key reform areas.

These are creating an enabling environment to implement climate priorities across ministries, facilitating climate adaptation priorities, and accelerating climate change mitigation actions.

The loan, which will be received under standard AIIB terms, has a maturity period of 35 years, including a five-year grace period.

The interest rate is based on the Secured Overnight Financing Rate (SOFR) plus a variable spread, while a front-end fee of 0.25 percent applies.

Mirana Mahrukh, additional secretary of the Economic Relations Division under the Ministry of Finance, and Rajat Misra, acting chief investment officer of Public Sector (Region 1) and Financial Institutions and Funds (Global) Clients, as well as director general of AIIB’s Public Sector Clients Department Region 1, inked the agreement on behalf of their respective sides.