Bangladesh in Negotiations for $1 billion Chinese Loan to Finance Teesta River Dredging Project

This week, officials from Bangladesh’s Water Development Board indicated that they are negotiating a nearly $1 billion loan from China to implement the proposed Teesta River Comprehensive Management and Restoration Project.

The cross-boundary river is a source of regional tension between Bangladesh and India due to water resource allocation issues, which could become more controversial as Chinese interests become involved in the project amid recent and continuing border tensions between Beijing and New Delhi. Indeed, Chinese influence is alleged to be a contributing factor to the troublesome river resource politics with Bangladesh. The source of the Teesta River on the Indian side is Tso Lamo lake, which sits just 4 km from one of India’s borders with China that has been prone to dispute.

Officials in Dhaka are reportedly hoping to secure Chinese financing for the project by the end of 2020, in time to begin dredging works on the river in early 2021. It remains unknown for now, the extent to which Chinese contractors will be involved in the project. It is noteworthy, however, that in June 2020, state-owned China Construction 7th Engineering Bureau and China Construction International were awarded a $44 million contract for construction of a river bridge across Teesta.

The bridge construction contract stipulated infrastructure development around the river, as well as “river management” services.