Japan to lend $1.5b in 7th tranche under ODA loan package

Japan will provide a loan of Japanese Yen (JPY) 217.556 billion (equivalent to approximately US$ 1.5 billion) for the Matarbari Ultra Super Critical Coal-Fired Power Project.

An 'Exchange of Notes' and 'Loan Agreement' on the 7th tranche for the project was signed under the 44th Japanese ODA loan package (2nd batch) at the NEC-2 Conference Room of the Economic Relations Division (ERD) in Dhaka on Saturday.

The second installment of the 44th loan package is JPY 217.556 billion. Since the first round was JPY 30 billion, the total amount under the 44th round would be JPY 247.556 billion (approximately USD 1.67 billion), according to a press release issued by the Japanese Embassy here.

Under the 7th tranche, the loan provided by the Japan International Cooperation Agency (JICA) will have a rate of interest of 1.60 per cent for construction, 0.10 per cent for consultancy services with a 30-year repayment period, including a 10-year grace period.

According to JICA, the frontend fee (at a time) will be 0.2 per cent.

ERD Secretary Sharifa Khan signed the 'Exchange of Notes' and the 'Loan Agreement' on behalf of the government while Japanese Ambassador to Bangladesh IWAMA Kiminori signed the 'Exchange of Notes' and JICA Chief Representative ICHIGUCHI Tomohide the 'Loan Agreement' on behalf of the Japan government.

The Tk 518.54 billion Matarbari coal power project is being implemented to meet the growing electricity demand and ensure a stable power supply by installing a 1200 MW plant at Matarbari of Maheshkhali Upazila under Cox's Bazar district.

Of the total cost, the government's contribution is estimated to be Tk 64.06 billion and JICA Tk 439.21 billion.

According to the JICA, the project began in July 2014 and will continue until December 2026. Up to August 2023, physical progress of the project is 78.30 per cent and financial progress is 65.14 per cent.

JICA is providing assistance for this project in different phases. JICA has already provided JPY 437.754 billion in 6 tranches. Under this 7th tranche of ODA loan, JICA will provide JPY 217.556 billion.

Addressing the agreement signing ceremony, the Japanese Ambassador said the project is expected to contribute to meeting the growing electricity demand and diversify energy sources.

Terming the project important in terms of connectivity with northeastern India, he said: "I spare no effort in extending further cooperation to the government and the people of Bangladesh to build a win-win partnership, now that is the "Strategic Partnership", for our prosperous future."

Japan is the single largest bilateral development partner of Bangladesh. Japan has been providing continuous support for the socio-economic development of Bangladesh since our independence.

The ODA commitment has exceeded US$ 30.34 billion till now. Japanese loans and grants are being utilised in a wide range of areas including power, roads, bridges, telecommunication, agriculture, health, education, water supply and sanitation, rural development, environment, human resources development, etc.

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