Japan, one of Bangladesh’s largest development partners, has signed an agreement with Dhaka on releasing the largest ever soft loan for six mega projects which include power, road communications and disaster management.
Japan says this 37th Japanese Yen Loan Package signed on Wednesday is expected to provide “fresh momentum” for Bangladesh towards becoming a middle income country.
JICA Chief Representative in Bangladesh Mikio Hataeda and Additional Secretary for Economic Relations Division Kazi Shofiqul Azam signed the agreement amounting to 173.538 billion Japanese yen, which is $1.5 billion or Tk11,600.
Before the signing at the ERD, Japanese Ambassador in Dhaka Masato Watanabe signed the exchange of notes for the agreement with the Additional Secretary. State Minister for Finance MA Mannan witnessed those signing.
Ambassador Watanabe said this was the largest ever Japanese loan made available to Bangladesh.
The interest rate is only 0.01 percent with a repayment period of 40 years, including a grace period of 10 years.
The funds will be utilised on the Dhaka Mass Rapid Transit project, Jamuna Rail Bridge, Cross-Border Road Network, Matarbarhi Coal Fired Power Plant, Energy Efficiency and Conservation Promotion Financing, and Disaster Risk Management Enhancement project.
Fresh momentum in achieving vision 2021
Japan, which accorded diplomatic recognition to Bangladesh soon after the latter’s liberation in 1971, is one of the biggest bilateral development partners of the country.
Relations between the two countries took a new turn when Prime Minister Sheikh Hasina visited Tokyo in 2014, following which her counterpart Shinzo Abe visited Dhaka.
During the PM’s visit, Abe announced up to 600 billion Japanese yen in additional assistance to Bangladesh in about four to five years from 2014.
The Japanese embassy says with the latest loan package, Japan’s total commitments through 2014, 2015 and 2016 amounted to 427.8 billion yen.
This latest package was discussed during Hasina’s visit to Japan. Abe also expressed his intention to further strengthen bilateral relations under the ‘Japan-Bangladesh Comprehensive Partnership’.
He also underlined Japan’s willingness to continue to help Bangladesh achieve its vision of becoming a middle income country by 2021.
Japan says this latest package is expected to provide “fresh momentum” for the government of Bangladesh in attaining its Vision 2021 goal, namely, to become a middle income country.
How the funds will be used
The Jamuna Railway Bridge Construction Project, including engineering services will get 2.464 billion Japanese yen from the package.
The purpose of the project is to improve capacity and safety of railway transportation by constructing a railway bridge over the River Jamuna parallel to the existing Jamuna Multipurpose Bridge.
This will contribute to an efficient logistics network within the country and with neighbouring countries, Japan says.
The project funds from the agreed loan agreement will be allocated to the consulting services, which include detailed design, tender assistance, and so on. The Bangladesh Railways will execute the project.
The Cross-Border Road Network Improvement Project (Bangladesh) will get 28.698 billion yen from the loan.
The project is aimed at improving intercity transportation and logistics network, by developing major international road networks in Bangladesh. This will also facilitate international trade with neighbouring countries.
The Roads and Highways department will execute this.
Some 75.571 billion Yen loan will be pumped into the Dhaka Mass Rapid Transit Development Project (Ⅱ) which is to alleviate traffic congestion and improve air pollution in the Dhaka City by constructing 20.1 kilometers long MRT.
The anticipated improvement to the flow of goods and people by the construction of MRT is expected to enhance the economic activities in Dhaka Metropolitan Area.
The Dhaka Mass Transit Company Limited will execute the project under the Ministry of Road Transport and Bridge.
Of the total loan, 37.821 billion yen will be used for the Matabari Ultra Super Critical Coal-Fired Power Project (Ⅱ).
The project is aimed at countering the rising demand of power while mitigating greenhouse gas emission in Bangladesh by constructing 600MW x 2 units of Ultra Super Critical Coal-Fired Power Plant in Matarbari area in Maheshkhali upazila under Cox’s Bazar district.
The Coal Power Generation Company Bangladesh Limited, Power Grid Company of Bangladesh Limited, Roads and Highways Department will execute the project under the Ministry of Power, Energy and Mineral Resources, and Ministry of Road Transport and Bridge.
The Energy Efficiency and Conservation Promotion Financing Project will get 11.988 billion Japanese yen while the Disaster Risk Management Enhancement Project will get the remaining 16.996 billion yen under the just signed package.
Source: Bd news24
