DHAKA: Bangladesh has signed a USD 335.78 million concessional loan agreement with China to expand and modernise its southwestern Mongla Port, located about 80 km west of the Indian border, according to a media report on Monday.
The agreement will finance the construction of two container terminals and dedicated cargo-handling yards at Mongla, Bangladesh’s second-largest seaport after Chattogram, as Dhaka seeks to expand the port’s capacity and infrastructure.
The loan agreement for Renminbi Yuan 2.404 billion or Bangladeshi taka 3,592.8975 crores (USD 335.78 million approx.) was signed between the Bangladesh government and the Export-Import Bank of China on Saturday, the state-run BSS news agency reported.
China will provide the loan at a concessional interest rate of 2 per cent, with a 20-year repayment period, including a five-year grace period, according to a statement by the Finance Ministry’s Economic Relations Division (ERD).
The ERD signed the agreement with China’s EXIM Bank on behalf of the two sides for the “Expansion and Modernisation of Mongla Port Facilities” project, the statement said.
The development comes a year after the Muhammad Yunus-led interim government cancelled an Indian Economic Zone project planned on 110 acres of land near Mongla Port, saying the Indian government-nominated developer had failed to begin physical construction within the stipulated timeframe.
The land had been earmarked for India under a 2015 bilateral agreement, and the Indian government later appointed Hiranandani Group subsidiary Evita Constructions to develop the site.
The loan agreement follows an understanding reached between Bangladesh and China during Prime Minister Tarique Rahman’s visit to Beijing in June.
Mongla Port is located on the east bank of the Pasur River, 71 nautical miles upstream from the Bay of Bengal.
India has previously flagged concerns over China’s expanding footprint in Bangladesh, with projects in strategically significant areas drawing particular attention because of their proximity to Indian territory.
Why does Mongla Port matter?
Situated on the east bank of the Pasur River — roughly 71 nautical miles inland from the Bay of Bengal — Mongla Port is uniquely positioned.
While Chattogram Port historically handled over 80 per cent of Bangladesh’s international sea trade, severe vessel congestion at Chattogram led consecutive governments in Dhaka to invest heavily in Mongla.
The opening of the multi-billion-dollar Padma Multimodal Bridge drastically cut transit time between Dhaka and Mongla, transforming the port from a secondary regional hub into a high-capacity gateway serving the nation’s ready-made garment (RMG) export industry and heavy bulk imports.
However, geography makes Mongla vital beyond commercial shipping. Mongla sits roughly 80 km (50 miles) from the Indian border in West Bengal. It sits adjacent to the Sundarbans mangrove ecosystem and near critical Indian maritime approach routes into the Port of Kolkata and Haldia Dock Complex.
Mongla is also geographically optimised to provide sea transit access to landlocked Bhutan, Nepal, and India’s landlocked North Eastern Region (the “Seven Sister” states).
