Japan will provide 330 million US dollar to Bangladesh as an Official Development Assistance (ODA) loan.
In this regard Mr. ITO Naoki, Ambassador of Japan to Bangladesh, and Ms. Fatima Yasmin, Secretary, Economic Relations Division, Ministry of Finance signed an Exchange of Notes titled ‘The Covid-19 Crisis Response Emergency Support Loan’ on Wednesday.
The financial assistance is provided with very favorable terms and the interest rate is 0.01 per cent. The repayment period is 11 years after the grace period of four years, says a spokesperson of the Japan Embassy in Dhaka.
The loan will be co-financed with Asian Development Bank (ADB) to enable rapid and effective utilisation of the loan.
Up to the present, the government of Japan has provided approximately $13 million as the emergency support to tackle Covid-19 in Bangladesh through international organisations, and provided PPE to hospitals through the JICA.
Additionally, on 16th July this year, Japan and Bangladesh signed the Exchange of Notes on Japanese Grant aid ‘Economic and Social Development Programme’ (approximately $10 million) for the medical equipment including CT Scanner, X-ray Machine.
These aids are focused on the medical and health sectors currently combating the novel coronavirus.
The purpose of the financial assistance signed today is to provide funding for additional financial expenditure by the government of Bangladesh to implement the economic stimulus package.
Unlike project loans, which are commonly used, this aid is very flexible in its use with the only conditions being a prohibition on items such as military use.
This is the first time in the history of ODA that such a loan has been provided in this form for the continence of the government of Bangladesh, the spokesperson said.