PM’s China Trip: $400m Mongla Port Deal on the Cards, Dhaka Pursues $6bn Funding

Bangladesh is expected to sign a US$400 million loan agreement with China for the development of Mongla seaport, while also seeking nearly US$6 billion in Chinese financing for a range of development projects and programmes, according to government officials.

Officials from the Ministry of Foreign Affairs (MoFA) said on Monday that the Mongla port loan deal is likely to be signed during Prime Minister Tarique Rahman's four-day visit to China, which begins today (Tuesday).

Dhaka is also expected to conclude a grant agreement with Beijing to secure funding for the construction of a hospital in the northern district of Nilphamari.

In addition, the two countries are likely to sign around 10 memorandums of understanding (MoUs) covering sectors such as green energy, electric vehicles, solar power, media cooperation, training initiatives, and the development of the Chinese Economic and Industrial Zone in Chittagong.

The previous interim government approved the 1,000-bed Nilphamari Hospital project at an estimated cost of Tk 24.59 billion. Of the total, the Chinese government is expected to provide Tk 22.80 billion in grant assistance, while Bangladesh will contribute Tk 1.79 billion.

A senior MoFA official said Bangladesh may seek Chinese support for projects and programmes worth nearly US$6 billion during the prime minister’s visit.

“Several new priority projects have been added to Bangladesh’s list of requirements, and the prime minister will seek Chinese assistance for these initiatives during the visit,” the official said.

The official noted that although 27 priority projects were identified during the visit of the Chinese president to Bangladesh in 2016, the country’s development priorities have evolved significantly over the past decade.

“Our development needs have changed considerably since then. As a result, the priority-project list has been updated, and Bangladesh will request financing from Beijing for the revised projects,” he added.

Previously, Bangladesh urged China to accelerate assistance for the 27 priority projects agreed upon during Chinese President Xi Jinping’s landmark visit to Dhaka in October 2016.

That agreement included a US$20 billion aid package aimed at supporting major infrastructure, energy and communications projects.

The Mongla Port Development and Modernisation Project, approved by the previous interim government, carries an estimated cost of Tk 40.68 billion (around US$400 million), with China having assured funding support.

Separately, more than Tk 15.38 billion has been allocated for dredging the Pashur Channel to ensure navigability for vessels using the port.

Meanwhile, Beijing may also propose the introduction of Panda Bonds and China’s Cross-Border Interbank Payment System (CIPS) as part of its broader efforts to promote the international use of the yuan.

Government officials, however, declined to comment in detail on Bangladesh’s position regarding these financial proposals.