Within eight months of taking the urea loan from Bangladesh, Nepal will repay it by purchasing the same amount of fertiliser from Kafco at prevailing international rates
Bangladesh is set to lend 50,000 tonnes of bulk granular urea to Nepal in order to help its South Asian neighbour deal with an ongoing severe fertiliser crisis.
Within the running month Bangladesh, Chemical Industries Corporation will hand over fertiliser produced by Karnaphuli Fertiliser Company Limited (Kafco) to representatives of the Nepalese government.
However, like previous years, Bangladesh is also importing a large quantity of urea fertiliser this year to meet local demand.
Within eight months of taking the urea loan from Bangladesh, Nepal will repay it by purchasing the same amount of fertiliser from Kafco at prevailing international rates.
Nepal's Ministry of Agriculture and Livestock Development will sign a deal with Bangladesh's Ministry of Industries this week.
An inter-ministerial meeting on Monday will finalise the draft deal prepared by the Industries Ministry.
Industries Secretary, KM Ali Azam, informed The Business Standard, "The government of Nepal has sought fertiliser in assistance from us. Prime Minister Sheikh Hasina has granted her consent."
"We have completed all necessary preparations. Within a day or two, Nepal will inform us about when they will take the fertiliser," he added.
Nepal has an annual demand of 8 lakh tonnes of urea, according to Nepali Times – a weekly publication in Nepal.
Due to the Covid-19 pandemic, companies, from which the Nepalese government were set to import urea, failed to supply the fertiliser on time. A severe stock shortage of urea fertiliser has led farmers to agitate to press home their demands.
Nepal Prime Minister KP Sharma Oli called Prime Minister Sheikh Hasina on 1 September, seeking 50,000 tonnes of urea in assistance.
How fertiliser will go to Nepal
Bangladesh will hand over the urea fertiliser to Nepal from Kafco's jetty in Chattogram. Nepal will carry the fertiliser to the country at its own cost.
According to the draft agreement, Nepal will check the quality of the fertiliser and will take urea from Kafco in three batches: two containing 15,000 tonnes each, and one containing 20,000 tonnes.
The Nepal government will send designated ships and trucks to the jetty at least three days before they receive the fertiliser.
The Nepalese embassy in Bangladesh will issue a "Certificate of Receipt" to the Bangladesh government upon receipt of each batch of fertiliser.
The fertiliser will first be carried from Chattogram to Jashore's Nowapara dockyard on lighter ships. It will then be transported on trucks to the nearest Indian railway links, from where it will be carried to Nepal by train through the Indian Territory.
According to stipulations in the draft agreement, the Bangladesh government will bear no liability and responsibility for any damage or loss to the product caused by handling, transportation or otherwise after delivery and supply to the Nepalese government.
In the event of Nepal's failure to repay within the agreed time, it will bear late repayment fees on the overdue repayment amount at a simple interest rate of 8% to be calculated on a daily basis upon 360 days a year, it adds.