Why is Bangladesh facing rising debt pressure
In the 54 years since independence in 1971, Bangladesh has paid around $40 billion in debt servicing. Now, nearly two-thirds of that amount will be repaid within just five years.
Bangladesh will need to pay nearly $26 billion in external debt servicing between the current fiscal year and FY30, according to an Economic Relations Division (ERD) report.
The report estimates are based on external loans contracted up to FY25. Borrowing in the current fiscal year has not been included.
Officials said Bangladesh has financed a series of mega projects through external borrowing, including the $11.3 billion Rooppur Nuclear Power Plant, Padma Rail Link, Karnaphuli Tunnel, Dhaka Metro Rail, Single Point Mooring with Double Pipeline, Hazrat Shahjalal International Airport expansion and the Jamuna Railway Bridge.
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Many of these projects have either completed or are nearing the end of their grace periods, triggering principal repayments and steadily increasing debt servicing pressure.
Principal repayments for the Rooppur plant are set to begin in 2028, with annual payments exceeding $500 million. Budget support loans taken during the post-Covid-19 period are also entering repayment phases, further adding to pressure.
Officials also cited implementation delays as a major concern. Delays have slowed the realisation of economic returns, while some completed projects remain idle due to operational bottlenecks.
For instance, electricity generation from Rooppur was expected two years earlier but has been delayed. The Single Point Mooring project, completed in 2024 with $467.84 million in Chinese financing, has yet to begin operations. The Dhaka airport expansion, financed with nearly $2 billion from Japan, also remains idle due to delays in appointing an operator.
The scale of the burden is clearer in the historical context.
In the 54 years since independence in 1971, Bangladesh has paid around $40 billion in debt servicing. Now, nearly two-thirds of that amount will be repaid within just five years.
How much Bangladesh has to repay
Total external debt stood at $77.28 billion as of 30 June 2025, up from $68.82 billion a year earlier, according to another ERD report.
Bangladesh paid about $4 billion in the previous fiscal year, which is expected to rise to $4.74 billion in the current year, $4.87 billion in FY27 – peaking at $5.5 billion in FY30.
The report shows Bangladesh will need to repay $25.99 billion over FY26-FY30, including the current fiscal year. Of this, $18.38 billion is principal and $7.6 billion is interest. This burden will nearly double to $51.33 billion between FY26 and FY35.
FY30 is projected as the peak repayment year, when Bangladesh will need to service about $5.5 billion based on the debt stock as of June 2025.
The report notes that, based on average monthly remittances of about $2.03 billion during FY21-FY25, less than three months of inflows would be sufficient to cover annual external debt obligations even at the peak.
