The interim government has signed an agreement with Asian Infrastructure Investment Bank (AIIB) to avail a $158.89 million loan to implement a power transmission infrastructure project through Power Grid Bangladesh.

The loan has a maturity period of 32 years, including a seven-year grace period, and will come in several currencies. The lion's share, $109.78 million, will be provided in the form of the greenback.

The interest rate will be the secured overnight financing rate (SOFR) plus variable spread for the US dollar, six-month euro interbank offered rate (EURIBOR) plus variable spread for the euro, and 3-month Shanghai interbank offered rate (SHIBOR) plus variable spread for the Chinese Renminbi.

A "variable spread" is a percentage added to a benchmark interest rate (like SOFR) that adjusts over time based on factors such as credit risk, market conditions, or predefined terms in a financial agreement.

In addition, the front end fee will be 0.25 percent of the loan amount (one-time) and commitment fee will be 0.25 percent of the undisbursed amount.

The front end fee on a loan means a charge levied by a lender when a loan is set up or when the first payment of the loan is taken. It may be a commitment fee, an establishment fee, or a documentation fee.

Mirana Mahrukh, additional secretary to Economic Relations Division, and Rajat Misra, AIIB's acting vice-president for Investment Clients Region I and Financial Institutions and Funds, Global, signed the agreement on the "Southern Chattogram and Kaliakoir Transmission Infrastructure Development Project" on December 10.