Nearly Tk 19,000 crore due in 2027 to repay loans of seven mega projects, questions over reserves

As repayment dates draw closer for the loans of seven large infrastructure and power projects, fears have grown of extra pressure on the government's budget and foreign currency management. According to the figures, about Tk 18,894 crore will have to be paid in principal and interest on these project loans in 2027.

Over the past decade, large projects have been taken up one after another to increase capacity in communications, power and port infrastructure. The seven large projects, including the Padma Bridge, the metro rail, the Rooppur nuclear power plant and the Matarbari and Payra power projects, cost about Tk 334,609 crore in total. About Tk 312,000 crore of that came from loans.

According to the latest Bangladesh Bank data, the country's gross foreign currency reserve was 34.95 billion dollars on 9 November 2026. The net reserve, calculated by the International Monetary Fund's BPM6 method, was 30.09 billion dollars. At 120 taka to the dollar, the gross reserve is about Tk 419,000 crore and the net reserve about Tk 361,000 crore.

That is, the net reserve is somewhat higher than the total loans of the seven large projects. But this comparison cannot conclusively determine the ability to repay. The full loans of the projects do not have to be repaid at once. Nor can all of the country's reserves be used to repay these project loans; reserves play an important role in import costs, fuel and food purchases, other foreign loan instalments and maintaining the balance of external transactions.

Paying principal and interest on the seven large projects in 2027 could cost about Tk 18,894 crore, which is 5.2 percent of the net reserve. However, if the instalments of the Padma Bridge rail link project, the Karnaphuli Tunnel and extra interest and loan liabilities of other projects are added, this cost will rise further.

The biggest financial pressure among the seven projects could come from Rooppur and Matarbari. A loan of 11.38 billion dollars was taken from Russia for the Rooppur nuclear power plant. Under the agreement, repayment is due to begin in March 2027, with 569 million dollars to be paid as the first annual instalment. For Matarbari, more than 531 million dollars, or over Tk 6,300 crore, may have to be paid in 2027.

In addition, the loans of the Padma Bridge, the metro rail, the Padma Bridge rail link and the Dohazari-Cox's Bazar railway are creating regular liabilities for the government. On the Dohazari-Cox's Bazar line, when third-phase repayment begins in 2028, about 55 million dollars a year will have to be paid in principal, plus interest. Complications have already arisen over repayment for the Payra thermal power plant; seeking money from the government to arrange instalments has also brought forward the risks of project-based loan management.

Bangladesh's overall foreign loan repayment picture shows, according to Economic Relations Division data, that the country paid 3.6 billion dollars in principal and interest in fiscal 2021-22. In fiscal 2022-23 that rose to 4.7 billion dollars. In other words, alongside the instalments of the large projects, the country's overall foreign debt liability is also rising.

The country's first road tunnel, built under the Karnaphuli river in Chattogram, has meanwhile become a major financial burden. According to the Bangladesh Bridge Authority, the tunnel cost about Tk 10,255 crore to build, with a revised cost of Tk 10,689 crore. About Tk 6,070 crore of that was a loan from China's Exim Bank, and the Bangladesh government provided the rest. Under the loan agreement, the loan must be repaid within 15 years with 2 percent interest and a 0.20 percent service charge.

The feasibility study had forecast more than 28,000 vehicles a day in 2025, but in reality an average of about 4,000 vehicles a day are using the tunnel. According to the Bridge Authority, daily operation and maintenance now costs about Tk 2.3 million, against toll collection of Tk 1.0 to 1.2 million. In the first three years after its inauguration in October 2023, losses in operation and maintenance alone stood at about Tk 401 crore.

Professor Dr Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM) and a member of the Transparency International Bangladesh trustee board, said the pressure of loan instalments and interest this year, pressure on reserves, the dollar crisis and limited revenue income have already exposed the economy's weaknesses. If the pressure rises further next year, he warned, there is a risk of the development budget shrinking, allocations to education, health and social security falling, new investment being hampered and inflationary pressure intensifying.

Professor Sayed Naimul Wadud of Dhaka University's economics department said the debt burden could become a major challenge for Bangladesh's economy next year. If a large part of the budget is spent on debt repayment, allocations to education, health, social protection and other development sectors could shrink, he warned. Before taking up new projects in future, their cost-bearing capacity and economic benefits must be properly assessed, he said.

Overall, although the current reserve is higher than the total loans of the seven projects, there is no guarantee that the debt liability can be handled smoothly with it. If export earnings, remittances and foreign investment rise, the ability to pay loan instalments will strengthen; conversely, if import costs rise or foreign currency inflows fall, paying the same instalments could become difficult.