Bangladesh signs $2.665bn loan deal with Japan

2021-11-22, 10:53pm Planning

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Bangladesh and Japan on Monday signed a $2.665 billion loan agreement for the implementation development projects.

Dhaka, Nov 22 :  Bangladesh and Japan on Monday signed a $2.665 billion loan agreement for the implementation of Matarbari Ultra Super Critical Coal-Fired Power project (6th tranche) and Dhaka Mass Rapid Transit Development Project (Line 1).

The agreement also covers the Covid-19 Crisis Response Emergency Support Loan Phase-2.

Appreciating the agreement between Dhaka and Tokyo, Finance Minister AHM Mustafa Kamal who virtually joined the function said Japan has been Bangladesh's most trusted friend and the foundation of which was laid during the historic visit of Father of the Nation Sheikh Mujibur Rahman to Japan on October 18-24 in 1973.

Economic Relation Division secretary Fatima Yasmin signed the loan agreementwith Japan International Cooperation Agency (JICA) Bangladesh chief representative Yuho Hayakawa Japanese while an exchange of note was also signed with Japanese Ambassador ITO Naoki on the occasion at the function held at the at NEC-2 conference hall of Economic Relations Division (ERD).

The finance minister expressed gratitude to the government of Japan for its involvement in a number of iconic mega projects in Bangladesh, including Bangabandhu Road and Rail Bridge over the Jamuna River, Metro Rail Networks in Dhaka city, Hazrat Shahjalal International Airport 3rd Terminal, Matarbari Coal Fired Power Plant and Matarbari Sea Port.

Senior officials of the Ministry of Finance, Finance Division, Power Division, Road Transport and Highways Division, CPGCBL, PGCB, RHD, DMTCL and other officials of Bangladesh, representatives from Embassy of Japan and JICA were present at the loan signing ceremony.

Japan will finance the two development projects under the 42nd ODA Loan Package (1st batch) at an interest of 0.60 per cent for construction, 0.01 per cent for consultancy service, Front End Fee (at a time) 0.2 per cent with a repayment period of 30 years including a 10 years grace period.

However, the 'Covid-19 Crisis Response Emergency Support Loan Phase 2' project's interest rate will be 0.55 per cent, Front End Fee (at a time) 0.2 per cent having a repayment period of 30 years, including 10 years grace period.

Currently, the 1200 MW Matarbari Ultra Super Critical Coal-Fired Power Project is being implemented to meet growing electricity demand and improve stable power supply by 2 units, each having 600MW capacity at Matarbari in Maheshkhali Upazila under Cox's Bazar district.

Power transmission lines, access roads, township development, and creating a channel for Matarbari Port works are included in the project.

The implementation period of the project, involving the total cost of Tk35,984.46 crore (GOB 4926.66 cr. + JICA 28939.03 cr. + CPGCBL 2118.77 cr.), is July 2014 to June 2023.

As of October 2021, the project achieved physical progress of 49 per cent and financial progress 51 per cent.

JICA is providing assistance for this project in different phases. JICA has already provided $ 2.63 billion in 5 tranches. Under this, the 6th tranche of ODA loan for this project, JICA will provide $ 1.20 billion.

On the other hand, the 31.241 km Dhaka Mass Rapid Transit Development Project (Line 1) km project will cost Tk 52,561.43 crore (GOB Tk 13,111.11 +JICA 39,450.32 crore) is divided into two parts-one is from Airport to Kamlapur and another is Purbachal route (from Natun Bazar to Pitolganj depot).  

The 19.872km airport route will have 12 underground stations while the 11.369 km Purbachal route will have nine overhead stations. The project will be implemented from 2019 to 2026, reports UNB.