Bangladesh Signs $335.78 Million China Loan to Modernise Mongla Port, 80 km From Indian Border

Dhaka — Bangladesh has signed a $335.78 million concessional loan agreement with China's Export-Import Bank to expand and modernise Mongla Port, the country's second-largest seaport, located roughly 80 kilometres from the Indian border. The agreement, signed on October 10, 2026, comes a year after Bangladesh cancelled a proposed Indian-backed economic zone near the same port, and follows a separate Chinese-developed economic zone agreement signed near the port earlier this year.

Details of the Agreement

The loan, amounting to RMB 2.404 billion, or approximately Tk 3,592.90 crore, was signed by Alia Meher, joint secretary of the Economic Relations Division (ERD) of Bangladesh's Ministry of Finance, on behalf of the Bangladeshi government, and Fengjun Tian, assistant general manager of the Export-Import Bank of China, on behalf of the Chinese side. The agreement, titled "Expansion and Modernisation of Mongla Port Facilities," will be implemented by the Mongla Port Authority under Bangladesh's Ministry of Shipping.

Under the project, the Mongla Port Authority will construct two container terminals equipped with modern handling machinery, along with a container yard, a container delivery yard and a cargo-handling yard. China's Export-Import Bank will provide the loan at a concessional annual interest rate of 2 percent, with a repayment period of 20 years, including a five-year grace period. The overall project is valued at approximately Tk 4,068 crore and is scheduled for completion by December 2028.

Mongla Port, situated on the Pasur River in Bagerhat district in southwestern Bangladesh, is the country's second-largest seaport after Chittagong, and provides maritime access to the Bay of Bengal. For regional shippers, the expanded container capacity at Mongla is expected to offer an alternative to the more congested Chittagong Port for cargo bound for southwestern Bangladesh and India's landlocked northeastern region and neighbouring countries.

This is not the first instance of Chinese financing at Mongla Port. The Mongla Port Authority had previously signed a separate $250 million deal with China for an earlier phase of port modernisation.

The Cancelled Indian-Backed Project

The new Chinese loan follows Bangladesh's decision roughly a year earlier to cancel a proposed Indian Economic Zone near Mongla Port, with Bangladeshi authorities citing delays in construction as the reason for the cancellation. Separately, in June 2026, Bangladesh and China signed a memorandum of understanding for a Chinese-developed economic zone on approximately 110 acres of land adjacent to Mongla Port, preceding the current port-modernisation loan agreement by several months.

Mongla Port's location, roughly 80 kilometres from India's border, has drawn attention to the broader pattern of Chinese infrastructure financing in Bangladesh's southwestern coastal region, an area in proximity to India's eastern states. The port-modernisation loan forms part of a longer-running pattern of Chinese development financing across South Asian coastal and port infrastructure, a pattern that has, in the case of other countries in the region, previously drawn attention in discussions of regional infrastructure financing and debt sustainability. Bangladeshi officials involved in the project have not publicly characterised the loan as directed at any strategic objective beyond the stated aim of expanding the port's cargo-handling capacity.