The Financial Express

Japan lends $2.67b

| Updated: November 26, 2021 09:33:35

Japan lends $2.67b

Japan confirmed US$ 2.665 billion (JPY 292.279 billion) loan on Monday for developing the Matarbari power plant and the MRT line-6 as well as for facilitating recovery from the Covid-19 pandemic shocks.

The Japanese development partner JICA will provide the loan under its 42nd Official Development Assistance (ODA) package.

Fatima Yasmin, Secretary of the Economic Relations Division (ERD) under the Ministry of Finance, Ito Naoki, Ambassador of Japan in Bangladesh, and Yuho Hayakawa, Chief Representative of JICA Bangladesh Office, signed the exchange of notes and loan agreements.

The signing ceremony was held at the ERD, where Finance Minister A H M Mustafa Kamal joined virtually.

Representatives of the Finance Division, Power Division, Road Transport and Highways Division, CPGCBL, PGCB, RHD and DMTCL along with other officials of the Government of Bangladesh, Embassy of Japan and JICA were present in the loan signing ceremony.

The 41st ODA package deal worth $3.15 billion, the record highest loan amount from the JICA, was signed in August last year to support seven ongoing development projects in the country.

Under the 42nd ODA package, the JICA will provide $1.20 billion (JPY 137,252 million) for the Matarbari Ultra Super Critical Coal-Fired Power (6th tranche), and $1.10 billion (JPY 115,027 million) for the Dhaka Mass Rapid Transit Development Project (Line-1) (2nd tranche).

Besides, the remaining $365 million worth of budgetary support will be given to the COVID-19 Crisis Response Emergency Support Loan Phase-2 programme for supporting smooth implementation of the policies concerned to strengthen capacity of the country's health sector.

The budgetary support will help to enhance economic and physical access to health services towards achievement of universal health coverage and to improve health finance, thereby contributing to promote economic stabilisation and development efforts of the country, the ERD officials said.

For the two development projects under the 42nd ODA package (1st batch), the JICA will charge interest at a rate of 0.60 per cent for construction-related financing, 0.01 per cent for consultancy service, and 0.2 per cent for the front-end fee (at a time). The loan maturity period will be 30 years with a grace period of 10 years.

On the other hand, the agency will charge 0.55 per cent interest and 0.2 per cent front-end fee (at a time) for the $365 million budgetary support. The maturity is 30 years with a grace period of 10 years.

Japan provided more than $27 billion worth of assistance to Bangladesh until June 2021.

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