Metropolis Desk-
The Asian Development Bank (ADB) wants to increase its portfolio; thus, it is requesting a hard-term loan from its non-sovereign lending facility.
The Manila-based lender persuaded Dhaka Electric Supply Company Limited (DESCO) to borrow from the facility, which normally aids organizations and firms in the private sector.
The floating interest rate on the non-sovereign loan would be the Secured Overnight Financing Rate (SOFR) + 0.05 to 0.5 percent. The loan has a maturity of 8 to 12 years and a grace period of 2 to 3 years.
The ADB thinks that given the need for more concessional loans amid the current economic crisis, the government is not now in a position to borrow from the facility.
The “Dhaka Power System Expansion and Strengthening Project in DESCO Areas” by DESCO requires finance of about $257.7 million, and the ADB has committed to providing loans of US$160 million.
Due to its fluctuating interest rate and shorter maturity than its current portfolios, the proposed non-sovereign loan would present more of a challenge.
