DHAKA: China will give Tk 5600.77 crore in hefty loan for setting up a fertilizer factory and developing the telecommunications sector of Bangladesh, said a source in the ministry of finance.

Of the proposed loan, Tk 4200 crore would be spent on the setting up of the fertilizer factory named ‘Shahjalal’ and Tk 1400.77 crore would go for development of telecommunications sector, said the source.

Sources said the interest on the loan would be two percent and the debt would be repaid in 20 years. But, no interest would be charged during a grace period of the first five years.

Finance Minister AMA Muhith told banglanews, “Prime Minister Sheikh Hasina visited China this year and several accords were signed between China and Bangladesh at the time.”

“The China government has expressed interest in giving the loan in fertilizer and telecommunications sectors following the tour of the premier,” he said.

The finance minister also said,”The Fenchuganj Fertilizer Factory is already outdated. Production in the factory is very poor compared with its consumption of gas.”

“The factory is not profitable at all”, said the custodian of the exchequer.

A high official of the finance ministry informed banglanews that a meeting was held on September 8 about the setting up of the fertilizer factory with China’s cooperation, with the finance minister in the chair.

Planning Minister AK Khandoker, Industries Minister Dilip Barua and Advisor to the PM Dr Moshiur Rahman, among others, attended the meeting.

The official also said the Chinese government would give loan opportunity to Bangladesh in the telecom sector for setting up 3G network.

Two separate accords would be signed within the current year for the loan, the sources said.

BDST: 2155 HRS, SEPT 9, 2010