The Government of Bangladesh has signed a $2.67 billion loan agreement with Japan to implement mass infrastructure development projects.
The Japan International Cooperation Agency (JICA) confirmed the loan under its 42nd Official Development Assistance (ODA) package to finance the country’s first underground metro rail (MRT Line-1), Matarbari coal-fired plant, and also provide Covid emergency budget support to tackle the COVID-19 crisis, according to finance ministry’s statement.
Fatima Yasmin, secretary to the Economic Relations Division (ERD), and Yuho Hayakawa, chief representative at JICA Bangladesh Office, signed the deals on behalf of respective sides this Monday.
ERD officials said $1.1 billion in loans from JICA would come as the 2nd portion for the Dhaka Mass Rapid Transit Development Project (Line 1) and about $1.2 billion as the 6th portion to implement Matarbari Ultra Super Critical Coal-Fired Power Project.
The remaining $365 million will be allocated to the “COVID-19 Crisis Response Emergency Support Loan Phase-2” program to support the smooth implementation of the policies intended to improve the country’s health care sector.
Mr. Mustafa Kamal, the finance minister, was present at the event and thanked the Japanese government and also praised Japan for participating in a number of iconic mega projects in Bangladesh. However, the government will have to repay “COVID-19 Crisis Response Emergency Support Loan Phase 2” within 30 years including a 10 years loan maturity grace period. The government has agreed to carry a 0.60% interest rate, with a 0.2% front-end fee (at a time).