Japan to lend $1bn for key schemes

Japan to lend $1bn for key schemes

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The Japan International Cooperation Agency (JICA) will provide a loan package worth $1.03 billion to implement four key projects including construction of the four-lane second Kanchpur, Meghna and Gumti Bridge.

Bangladesh on Sunday inked the four agreements with Japan under which the package will be provided as Official Development Assistance (ODA).

The 34th ODA Loan Package is the largest ever made to Bangladesh so far by Japan, single largest bilateral development partner of the country.

Economic Relations Division’s Secretary Abul Kalam Azad and JICA Chief Representative Takao Toda signed the agreements at the National Economic Council Auditorium while the Secretary signed ‘Exchange of Notes’ with the Japanese Ambassador Shiro Sadoshima.

Finance Minister Abul Maal Abdul Muhith and Communications Minister Obaidul Quader witnessed the signing of the agreements that cover such sectors as communications and local government.

Bangladesh will have to pay 0.01 percent interest for the loans, which is payable in 40 years, including a 10-years grace period.

The four-lane Kanchpur, Meghna and Gumti bridges will be built adjacent to the existing bridges on Dhaka-Chittagong highway No 1 to tackle the rapidly increasing traffic congestion.

Three existing bridges will also be rehabilitated under the same project to be implemented between April 2013 and October 2021 at a cost of $311 million.

Under the ‘Karnaphuli Water Supply Project (Phase-2)’, water supply facilities will be expanded for the Chittagong City to ensure safe water access to 0.65 million people, a fourth of its population.

Of the loans, $ 375 million will be spent on this project.

The Northern Bangladesh Integrated Development Project will focus on livelihoods of 33 million people in the most deprived northern area.

The $221 million project will apply ‘link model’ of JICA that reinforces the government-citizen link through bottom-up approach for strengthening local government’s administrative capacity.

The renewable energy development project will promote the increase of power supply and diversification of energy source by financing the installation of solar photovoltaic power generation and biomass power generation. Up to $122 million in loan will be utilised for the plan.

During the signing, the Japanese Ambassador called upon the government to take measures for ‘smooth and effective’ implementation of the projects for ‘maximum’ benefits of people.

Briefing their projects and cooperation, JICA Chief Representative Toda said combining with ‘33rd ODA Loan Package’ singed last month, the amount of annual commitment in the current fiscal stood at $ 1.8 billion which is about 1.6 percent of Bangladesh’s total GDP.

He said in the current fiscal the amount of disbursement would be $2 billion while in the next fiscal with 70 percent increase the amount would be $3.4 billion, a figure that brightened the face of the Finance Minister.

Muhith said despite progresses, Bangladesh lacks investment.

“We still have an investment ratio of just about 24 and 25 percent of GDP. Most of the countries at our level or a little better have an investment level of roughly 30 percent. So we have a long way to go,” he said.

He said if the Japanese loan of $3.4 billion as expected by the JICA chief is disbursed in the coming fiscal, the investment ratio would go up to 330 percent.

Muhith said it was the ‘largest’ loan agreement with Japan and the projects were of ‘significant importance’.

According to the Ministry of Finance, Japan has committed $11 billion loans since 1971 and nearly $7 billion has been utilised so far. banglanews24.com

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