Dhaka, Bangladesh (BBN) – Five private companies are allowed to receive loans worth over US$192 million from overseas sources for expansion of their businesses, officials said.

The loans were approved at a meeting of the scrutiny committee on foreign borrowing, held at the central bank in the capital Dhaka on Thursday with Bangladesh Bank (BB) Governor Atiur Rahman in the chair.

“We’ve given approval to the companies’ loan proposals for a total of $192.53 million that would be used for expansion of their businesses,” a BB senior official told the FE.

The companies are Axiata (Bangladesh) Limited, Mundipharma (Bangladesh) Limited, Khulna Power Company Limited, United Airways (BD) Limited and Abul Khair Steel Melting Limited.

The BB official also said the committee has given consent, in principle, for completing the negotiations for loans for Summit Bibiyana-I and Summit Bibiyana-II Power projects, worth US$ 264 million.

Axiata (Bangladesh) Limited, which operates under brand name Robi, is set to get a loan worth US$30 million from Standard Chartered Bank (SCB) London for purchasing equipments to expand its network across the country.

“The Robi will use the fund for purchasing equipment to upgrade and expand its network across the country,” another BB official said.

Robi is a joint venture company between Axiata and NTT DoCoMo of Japan. The company commenced operation under the Aktel brand on November 15, 1997 and embarked on a new journey with the brand name of Robi on March 28, 2010.

The United Airways is set to receive $21.75 million from a Singapore-based leasing company to purchase two new aircrafts, the BB officials said.

Launched on July 10, 2007, the United Airways (BD) Limited has some 500 shareholders, 95 per cent of whom are non-resident Bangladeshis (NRBs) living in the United Kingdom.

Khulna Power Company Limited will get loans worth $50 million from two state-owned investment companies the Germany and the Netherlands, the central bank officials said.

Abul Khair Steel Melting Limited will be able to avail itself of the overseas loans, worth $90 million from two state-owned investment companies in Germany and the Netherlands to expand its production capacity through installation new capital machinery, they added.

Mundipharma (Bangladesh) Limited will receive $0.785 million as foreign loans to implement its project in Bangladesh.

The central bankers also said the highest rate of interest in the cases of the approved loans is six-month LIBOR+4.00 per cent, meaning an effective interest rate at a level of 4.40 per cent.

“Such foreign financing will be helpful to keep the country’s foreign exchange market stable. It will also help to improve the country’s balance of payments situation,” the BB official noted.

BBN/SSR/AD-09Sept11-3:08 pm (BST)