The Opec Fund for International Development has stepped up with $70 million in budget aid for Bangladesh to help recover from the Covid-19 pandemic shocks.
The board of finance of the institution of petroleum exporting countries approved the loan for the Covid-19 Action Response and Expenditure Support Program on August 21.
Economic Relations Division (ERD) officials said this the first time the Opec Fund has helped Bangladesh with budget support.
The money will be spent through the Finance Division. Now an inter-ministerial meeting will be held to finalise the loan. The meeting will decide where and how the assistance will be used, and then the Opec Fund will be attained.
ERD officials hope that the loan agreement will be signed within the next two months after completing the processes.
The interest rate of the loan will be 1.25%. Additionally, a 1% service charge will have to be paid. The payback period of the loan is 15 years with a three-year grace period.
Bangladesh has already received promises of a large sum of budget aid from various development partners on an urgent basis to revive the economy from Covid-19's fallout.
Of them, the country is due to receive: $250 million from the World Bank (WB), $500 million from the Asian Development Bank (ADB), $250 million from the Asian Infrastructure Investment Bank (AIIB), and $330 million from the Japanese government.
Processes are ongoing for more budget aid from other development partners.