The loan agreement is expected to provide ‘fresh momentum’ for Bangladesh towards becoming a middle income country by 2021
Japan has signed its 37th Japanese Yen Loan Package with Bangladesh amounting to 173.538 billion Japanese Yen, which is $1.5 billion or Tk11,600, reported Bangladesh-based news portal bdnews24.com.
Japan says that this package is expected to provide ‘fresh momentum’ for Bangladesh towards becoming a middle income country by 2021. The interest rate is only 0.01 per cent 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.
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 would further strengthen the bilateral relations under the ‘Japan-Bangladesh Comprehensive Partnership’.
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 fund will be allocated to the consulting services, which include detailed design, tender assistance, and so on. The Bangladesh Railways will execute the project.
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, thus improving the logistic network of Bangladesh with its neighbouring countries.
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, thus facilitating international trade with neighbouring countries. The Roads and Highways department will execute this.
About 75.571 billion Japanese Yen loan will be pumped into the Dhaka Mass Rapid Transit (MRT) Development Project (Ⅱ) which is to alleviate traffic congestion and improve air pollution in the Dhaka City by constructing the 20.1 kilometers long MRT. This would enhance 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 Japanese Yen will be used for the Matabari Ultra Super Critical Coal-Fired Power Project (Ⅱ). The project is aimed at constructing 600MW x 2 units of Ultra Super Critical Coal-Fired Power Plant in Matarbari area in Maheshkhali upazila under Cox’s Bazar district. This would suffice the rising demand of power while mitigating greenhouse gas emission in Bangladesh.
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 Japanese Yen under the signed package.