DHAKA, August 30, 2012: The Asian Development Bank (ADB) and the Japan International Cooperation Agency (JICA) extended the time limit for their Padma Bridge loans effectiveness by a month to September 30, according to official sources.

The Economic Relations Division (ERD) today (Thursday) held a meeting with the visiting ADB Director General for South Asia region, Juan Miranda, on extension of the loan effectiveness. After the meeting, ERD officials confirmed the extension of the time limit of the loans, but said that the official announcement to this effect would come on Friday.

The effectiveness of the loan was originally due to end on July 31, but the development partners earlier extended the time limit to August 31.

The latest extension followed the assurance of the ADB's Director General for South Asia region that the bridge would be built.

After a meeting with Finance Minister Abul Maal Abdul Muhith, Miranda told journalists Thursday that he would like to see news headline saying "this bridge will be built".

This firm optimism from the ADB's high-up and the subsequent extension of loan effectiveness by ADB and JICA effectively removed the cloud over the future of the country's largest basic infrastructure development project.

ADB and JICA are the co-financiers of the $2.9 billion project, in which the World Bank (WB) was the lead financier with a commitment of $1.2 billion loan. The ADB agreed to provide over $610 million and the JICA pledged $400 million when another co- financier, the Islamic Development Bank (IDB) approved $140 million for the project.

The WB cancelled the loan on June 30, but the ADB and JICA extended the loan effectiveness for the first time on July 31 by one month to August 31. The IDB assured that it would continue funding to the bridge project.

The government, however, now expects that the WB would revise its decision to finance the bridge project according to its earlier commitment.

Referring to the on-going negotiation process with the WB, the Finance Minister told journalists Thursday that they had been continuing a 'delicate negotiation', but could not make any comment about the outcome at this stage.