Japan to supply Bangladesh $3.2 billion for development projects
Japan has confirmed JPY338.247 billion, equal to $3.2 billion, in assistance for Bangladesh to implement seven development projects in the united states.
Both countries signed the 41st Official Development Assistance (ODA) loan package on Wednesday at the conference room of the Economic Relations Division (ERD).
The largest-ever single loan package will be operated through the Japan International Cooperation Agency (JICA).
Japanese Ambassador to Bangladesh Ito Naoki and ERD Secretary Fatima Yasmin signed the ODA's exchange of notes. Chief Representative of Jica's Bangladesh Office, Hayakawa Yuho and the ERD secretary signed financing agreement.
ERD officials said the offer was scheduled to be signed by June this season, but Jica delayed it as a result of Covid-19.
With this loan agreement, doubt over Japan's financing for important projects - such as for example two metro railways, a separate railway bridge over the Jamuna River and the expansion of Dhaka AIRPORT TERMINAL - is over.
The Japanese government in addition has reduced interest rates on the package loans at this time of the Covid-19 pandemic.
Jica reduced the interest rate to 0.65 percent for the 41st package, which is 0.25 percentage points lower than that of the 40th package. The interest of the 39th package was one percent.
With another 0.01 percent for consulting services, the loan from Jica is the most concessional in comparison to those of the World Bank, Asian Development Bank (ADB) and other development partners.
The federal government would repay the loan within the next 30 years while a 10-year grace period will be accessible.
Under the package, Japan provides 72.194 billion yen for the Dhaka Mass Rapid Transit Development Project (MRT line 6), which may be the fourth tranche of support from Japan for the project.
Japan is starting its financing for MRT Line 5's northern route, another metro rail project, with 55.696 billion yen.
The package also contains 89.016 billion yen to implement the Jamuna Railway Bridge Construction Project. The total amount may be the second tranche of Japanese assistance for the project.
Japan may also disburse 80 billion yen for the Hazrat Shahjalal AIRPORT TERMINAL expansion project as the next tranche under the package.
The Chattogram-Cox's Bazar Highway Improvement Project will be implemented with a 1.906 billion-yen loan support from Japan. Some 11.218 billion yen will be disbursed for the Food Value Chain Improvement Project.
Japan provides 28.217 billion yen to implement the urban development and city governance project.
With the 40th loan package, Japan had a deal to supply $2.51 billion. One section of the package was signed on June 30 this past year in Dhaka. Another part was signed during Prime Minister Sheikh Hasina's visit to Japan during May 28-31 this past year.
The federal government signed a $1.83 billion loan agreement with Japan under the 39th loan package on June 14, 2018. On June 29, 2017, Japan signed a manage Bangladesh to supply $1.64 billion in loan.
Officials at the loan signing meeting said the federal government of Japan has provided approximately $13 million in emergency support to tackle Covid-19 in Bangladesh through Jica and provided personal protective equipment to hospitals.
Japan and Bangladesh signed the exchange of notes on japan grant for the Economic and Social Development Programme, worth $10 million, for medical equipment that included a CT scanner and x-ray machine, on July 16 this season.
This aid centered on the medical and health sectors currently combating the novel coronavirus.
On August 5 this year, both countries signed an exchange of notes for the Covid-19 Crisis Response Emergency Support Loan amounting to $331 million; that was the first budget support from Japan to Bangladesh.
The purpose of the financial assistance is to provide funding for additional financial expenditures by the Bangladesh government to implement the stimulus packages.
Japan will continue steadily to extend its support for the development of Bangladesh as the country is coming to achieving the best growth in Asia this decade, said Japanese Ambassador to Bangladesh Ito Naoki.
