Japan is expected to give Bangladesh nearly US$1.2 billion in soft loan early next year for five infrastructure-development projects, the priority one being a special economic zone (SEZ) exclusively for Japanese investment, officials said.
They said main purpose of the proposed Japanese financial support is to develop an exclusive SEZ in Chittagong to bring in Japanese investment.
Ministry of Finance (MoF) officials said Friday that a mission from the Japan International Cooperation Agency (JICA) is now in Dhaka to work out detailed financing plan for the five proposed projects.
The 1.2 billion US dollars will come as concessional loans under JICA's proposed 36th Official Development Assistance (ODA) to help the government in much-needed infrastructure development.
"A JICA fact-finding mission is now in Dhaka. They are discussing with the line government ministries and agencies their proposed financial support for the five development projects," a senior MoF official told the FE.
The Japanese development-financing agency is likely to support the government in developing the proposed SEZ in Chittagong for the Japanese investors, he added.
He said the JICA has already started a feasibility study to set up the zone.
"After the feasibility study a detailed SEZ development plan will be prepared. Soon after completion of the ongoing feasibility study, the JICA will extend necessary support to Bangladesh's SEZ."
Under the proposed SEZ development project, the Japanese development partner would also set aside some funds for lending the aspirant entrepreneurs who will invest in the exclusive economic zone, the MoF official said.
During the recent Dhaka mission of Japanese Prime Minister Shinzo Abe, the two countries agreed to develop a SEZ for the Japanese investors.
The four other projects are: Dhaka-Chittagong national power grid strengthening; western Bangladesh bridge improvement; maternal, neonatal and child health; and local government improvement projects under its 36th ODA package.
"We are hopeful of completing negotiations for the proposed 36th ODA package by December this year. The loan deal is expected to be signed by March next year," said the MoF official.
On June 16 last year, the government signed a $1.18 billion worth of 35th ODA loan package with the JICA to implement five development projects.
In the ODA package, the Japanese donor would provide $405.52 million for setting up 1200MW coal-fired power station at Matarbari, $300 million for inclusive city governance project, $250 million for energy-efficiency project, $149 million for Haor flood management and livelihood improvement project, and $97 million for small and marginal-sized farmers' agricultural productivity improvement and diversification financing project.
The rate of interest on the Japanese ODA loan is 0.01 per cent per annum. The credits are repayable in 40 years, including a 10-year grace period.
The Japanese government has provided loans and grants totaling $11 billion until 2013 to the Bangladesh government.
kabirhumayan10@gmail.com
