Bangladesh has signed a $335.78 million loan agreement with China to expand and modernise Mongla Port, the country’s second-largest seaport after Chattogram. The port development project will be financed by China’s Export-Import Bank and aims to increase cargo-handling capacity and upgrade existing infrastructure.
The agreement, worth 2.404 billion Chinese yuan, was signed between Bangladesh’s Economic Relations Division (ERD) and China EXIM Bank. Under the terms, China will provide the loan at a concessional interest rate of 2%, with a repayment period of 20 years, including a five-year grace period.
The project includes the construction of two container terminals equipped with modern machinery, along with a container yard, a container delivery yard and a dedicated cargo-handling yard. The upgrades are intended to improve port operations and enable Mongla to handle larger volumes of cargo.
Located on the eastern bank of the Pasur River, Mongla Port is around 80 km from the Indian border and provides access to the Bay of Bengal. Its location has drawn attention to the strategic implications of expanding port infrastructure in southwestern Bangladesh.
The agreement comes about a year after Bangladesh’s interim government cancelled a proposed Indian Economic Zone near Mongla Port. The project had been planned on 110 acres of land earmarked for India under a 2015 bilateral agreement. The cancellation was attributed to the failure to begin physical construction within the stipulated timeframe.
The latest loan agreement follows an understanding reached during Bangladesh Prime Minister Tarique Rahman’s visit to Beijing in June. It reflects continued infrastructure cooperation between Dhaka and Beijing as Bangladesh seeks funding to modernise key transport and trade facilities.
India has previously expressed concerns about China’s expanding infrastructure presence in Bangladesh, particularly in areas close to Indian territory. The Mongla Port project adds to regional attention on China’s growing economic engagement in South Asia.
For Bangladesh, the concessional financing offers support for port expansion and trade infrastructure. The project’s progress will be closely watched as the country balances infrastructure development with its economic and diplomatic relationships with China and India.
