India to Provide $115m to BD for Special Economic Zone

The special economic zone for Indian investors in Bangladesh will receive $115 million under India's 34th line of credit. 

Md. Moniruzzaman, Joint Secretary and General Manager, Investment Promotion, of the Bangladesh Economic Zones Authority (BEZA), confirmed the development, reports Outlook.

Based on the government-to-government deal, the proposed SEZ, spread over 1,000 acres in the port city of Chattogram, is being established by Indian conglomerate Adani Ports and Special Economic Zone Ltd. Adani was approved as a developer by the Bangladesh Prime Minister's Office earlier this year. The BEZA, which comes under the PMO, had signed a memorandum of understanding with the Indian government for developing the zone in June 2015.

New special economic zones have already attracted a good number of foreign investors in Bangladesh, Moniruzzaman said. He also disclosed that Indian investment for another SEZ at Mongla port has also been confirmed. 

The Indian government has recently given approval in principle for financing the zone for its investors on June 11.

The ongoing SEZ, to be developed in Mirsarai of Chattogram as part of Bangladesh 's flagship industrial city Bangabandhu Sheikh Mujib Shilpa Nagar, was approved by the National Economic Council (ECNEC) Executive Committee in April last year. It was planned to be implemented from April 2019 through June 2021.

Moniruzzaman said the finalization of some essential infrastructure facilities, including a 24-km-long embankment, seven sluice gates, and power plants at the industrial city has made it a coveted investment destination.

Currently, the final negotiation is taking place involving the joint venture agreement between the BEZA and the Indian zone developer, he said.

According to BEZA documents, a move is now underway to employ project management consultants under the project. To this effect, necessary documents were sent to India''s Exim Bank on June 23.

The total cost for the zone''s infrastructure development has been fixed at $109.74 million or nearly 9.19 billion takas. Of this, $109.11 million will be mobilised under the third package.

Since 2010, India has extended to Bangladesh three lines of credit of $8 billion, according to official data. During Bangladesh's Prime Minister's visit to India in April 2017, India expanded the $4.5 billion third credit line to include ventures in the fields of port construction, rail, roads, airports, power and energy, telecommunications, shipping, etc.

For FY 2020-2021, Bangladesh''s annual development programme has allocated 403.4 million takas for the zone''s construction.

Of the allocation, 395.1 million takas will be mobilised under the third lending package.

The source said, once operational, the proposed country-specific zone is expected to create employment for nearly 0.1 million people and attract more than $2 billion investment.

The Indian zone will receive a positive answer because of its suitable position next to the Sandwip Channel and its four-lane link to the Dhaka-Chattogram highway, which is considered to be the economic lifeline of Bangladesh.