China Eximbank provides RMB 1.475 billion government concessional loan for Phase 1 of the Padma (Jashaldia) Water Treatment Plant Project (Linked to Record ID#34225)

Project narrative

On May 7, 2013, China Eximbank and the Government of Bangladesh signed an RMB 1.475 billion government concessional loan (GCL) agreement and a $64 million preferential buyer’s credit (PBC) agreement for Phase 1 of the Padma (Jashaldia) Water Treatment Plant Project. The GCL and the PBC carry the following borrowing terms: a 2% interest rate, a 20-year maturity, a grace period of 5 years, a 0.2% commitment fee, and a 0.2% management fee. Record ID#38967 captures the GCL, while Record ID#34225 captures the PBC. The borrower was expected to use the proceeds of the GCL and the PBC to finance a $290.8 million commercial (EPC) contract between Dhaka Water and Sewage Authority (DWSA) and China CAMC Engineering Co., Ltd., which was signed in September 2012. According to the Government of Bangladesh’s Economic Relations Division (ERD), the GCL had achieved a disbursement rate of 25.6% (RMB 378,040,000 out of RMB 1,475,000,000) as of June 30, 2014 and 100% (RMB 1,475,000,000 out of RMB 1,475,000,000) as of June 30, 2020, and the PBC had achieved a 100% disbursement rate ($64 million out of $64 million) as of June 30, 2019. According to the Government of Bangladesh’s ERD, the borrower had made repayments under the GCL worth RMB 147,420,000 as of June 30, 2020 and RMB 245,700,000 as of June 30, 2021 and it had made repayments under the PBC worth $2.133 million as of June 30, 2019 and $10.667 million as of June 30, 2021. The purpose of the project was to construct the Padma water treatment plant in Jashaldia within the Louhajang subdistrict (upazila) and the Mushiganj district. The project also involved the construction of a pump station, a booster pumping station, double-circuit overhead high-voltage cables, and 33 kilometers of large-caliber raw water and purified water distribution pipelines. Upon completion, the water treatment plant was expected to treat water from the country's mighty Padma River and deliver 450 million liters of water per day to millions of residents of the country’s capital (Dhaka). The project also sought to reduce the risk of geological hazards resulting from excessive exploitation of groundwater. China CAMC Engineering Co., Ltd. was the EPC contractor responsible for project implementation. Construction began in January 2013 and was originally expected to reach completion by June 2016. However, the project encountered various delays and was completed behind schedule. It ultimately passed completion acceptance in January 2019 and passed a 72-hour test in February 2019. The water treatment plant went into service and began to provide water to Dhaka after it was connected to the water distribution network on October 10, 2019. An official inauguration ceremony for the plant was held on October 11, 2019.