China Development Bank and China CITIC Bank provide $184.3 million syndicated loan for Joydevpur–Debogram–Bhulta–Madanpur Road Upgrading Project

On April 13, 2021, Dhaka Bypass Expressway Development Company Limited (达卡绕城高速公路开发有限责任) — a special purpose vehicle and joint venture of Sichuan Road and Bridge (Group) Corporation Ltd of China (60% equity stake), Shamim Enterprise (Pvt) Ltd (30% equity stake), and UDC Corporation Ltd (10% equity stake) — signed a syndicated loan worth BDT 10.75 billion (approximately $122.87 million) with a group of domestic banks (led by Bangladesh Infrastructure Finance Fund Limited) for the Joydevpur–Debogram–Bhulta–Madanpur Road Upgrading Project. Then, on April 23, 2021, Dhaka Bypass Expressway Development Company Limited signed a $184.3 million (BDT 16.14 billion) syndicated overseas loan agreement with China Development Bank (CDB) and China CITIC Bank for the Joydevpur–Debogram–Bhulta–Madanpur Road Upgrading Project. On behalf of their respective loan syndicates, CDB and Bangladesh Infrastructure Finance Fund Limited signed a Common Terms Agreement. It is known that these loans carry 18-year maturities, but their interest rates and grace periods are unknown. The Asian Development Bank (ADB) also issued a $100 million loan (ID#3958-BAN) on September 10, 2010 to Bangladesh Infrastructure Finance Fund Limited, which it appears to have on-lent to the Dhaka Bypass Expressway Development Company Limited (before the syndicated loans were issued). The total cost of the Joydevpur–Debogram–Bhulta–Madanpur Road Upgrading Project is $412.2275 million (RMB 2.844 billion). It is being implemented on a public-private partnership (PPP) basis and financed according to a debt-to-equity ratio of 70:30. Dhaka Bypass Expressway Development Company Limited signed a concession agreement with Bangladesh's Roads and Highways Department (RHD) on December 6, 2018. This agreement made Dhaka Bypass Expressway Development Company Limited responsible for designing, financing, constructing, operating, and maintaining the tolled expressway over a 25-year concession period, with tolls charged based on vehicle type. The Government of Bangladesh provided viability gap funding of BDT 3.1 billion and a minimum revenue guarantee to the concessionaire. The concession agreement also grants the Government of Bangladesh a share of the revenues generated by Dhaka Bypass Expressway Development Company Limited over a certain threshold. The purpose of the project is to upgrade the 48 km Joydevpur–Debogram–Bhulta–Madanpur Road to a dual carriageway to improve connectivity between country's north and northwest with Chattogram Port. More specifically, the project will seek to add a four-lane tollway and a two-lane service to the Joydevpur–Debogram–Bhulta–Madanpur Road (National Highway N105). The project’s ultimate aim is to create a key connection between the industrial zone northeast of Dhaka and national highway N1 to Chattogram, as well as to the N2, N3, and N4 national highways. Due to heavy traffic concerns, it is hoped that this project will reduce journey times and address traffic issues. Upon completion, the Joydevpur–Debogram–Bhulta–Madanpur Road will become Bangladesh's first toll road. Construction was originally expected to commence in September 2019. A foundation stone laying ceremony took place on December 26, 2019, and at that time, the project was expected to reach completion in 2022. However, the project hit several snags. The outbreak of the COVID-19 pandemic led to major implementation delays. A 2017 land acquisition law also increased the amount of financial compensation needed to pay affected people considerably, which led to land acquisition delays. Construction ultimately began in October 2020. However, by June 2021, RHD had already requested an extension to the project completion deadline to June 2024.

Additional details

1. This project is also known as the Upgrading of the Dhaka Bypass Road Project and the Joydevpur-Debogram-Bhulta-Madaripur Road Into 4 Lanes through Public Private Partnership Project. The Chinese project title is 孟加拉首都达卡绕城高速公路项目 or 达卡绕城高速 or 四川路桥首个海外PPP项目 or 由四川路桥投资建设的孟加拉达卡绕城高速PPP项目. 2. One source (“Administrative Sanction of the Government to Ms. Sandia Islam" ) suggests that ICBC may also be a lender to this project; however, that source refers only to negotiations, and as CDB had not committed a loan in July 2019, it was clearly a preliminary stage. 3. Dhaka Bypass Expressway Development Company is the project company responsible for implementation. Its ownership is as follows: Sichuan Road and Bridge (Group) Corporation Ltd (60 percent), Shamim Enterprise (Pvt) Ltd (30 percent), and UDC Corporation Ltd (10 percent) of Bangladesh. 4. Some sources claim that the consortium (and thus project company ownership) was entirely Chinese; however, "四川路桥投建孟加拉国首条全封闭高速公路", an official Chinese source, explicitly states that Shamim Enterprise Limited and UDC Construction Limited are of Bangladeshi origin. 5. Bangladesh Infrastructure Finance Fund Limited is a Bangladesh government owned non-bank financial institution with the purpose of encouraging investment in the infrastructure in Bangladesh. 6. Hogan Lovells served as legal counsel to the lenders. The Asian Development Bank (ADB) acted as financial advisor on the transaction to the Public–Private Partnership Authority (PPPA) of Bangladesh. The ADB has been working with the Government of Bangladesh for over 5 years to transform the country’s roads by making them a bankable asset class attractive to international investors, as has happened in other sectors such as the independent power producer sector. 7. This is the first PPP project of the Government of Bangladesh's Roads and Highways Department (RHD).

Number of official sources

15

Number of total sources

34