Bangladesh has signed a $4.5-billion loan deal with India for developing its infrastructure, health and education.
The agreement was signed in the presence of Finance Minister Arun Jaitley and his Bangladesh counterpart, A.M.A. Muhith, by Bangladeshi Economic Relations Division Secretary Kazi Shofiqul Azam and Managing Director of the Export-Import Bank of India David Rasquinha.
Bangladesh will use the funds for 17 priority infrastructure projects, which include electricity, railways, roads, shipping and ports.
Bangladesh will pay an interest rate of 1% a year. It will have 20 years to pay back the loans, with a grace period of five years.
Under the agreement, Bangladesh will have to purchase 65% to 75% of the services, goods or works from the Indian market with the money to be provided under the LoC.