The government approved on Wednesday US$800 million hard-loan from Islamic Development Bank (IDB) to help Bangladesh Petroleum Corporation (BPC) finance oil import, officials said.
It also endorsed $1.3 billion worth of hard loans from four foreign banks and institutions to finance setting up of a urea fertiliser factory at Palash in Narshingdi.
The Standing Committee of the Non-Concessional Loan of the Government, headed by Finance Minister AMA Muhith, endorsed the high-interest loan from the IDB's commercial wing - Islamic Trade Financing Cooperation (ITFC) -- and from four foreign lenders.
Meeting sources told the FE that the Economic Relations Division (ERD) placed the IDB's $1.0 billion loan proposal before the standing committee.
Of the amount, $800 million was approved for immediate purchase of oil while the remaining $200 million would be endorsed later if required, a senior official said.
The interest rate for the six-month period $1.0 billion ITFC loan will be 4.5 per cent (mark-up), 0.7 percentage points higher than the last loan from the same lender.
Of the $1.3 billion loan for the fertiliser factory, Japanese bank JBIC will provide $600 million, World Bank's MIGA $300 million and HSBC & BTMU $400 million.
