Japan will provide $330 million to Bangladesh as an official development assistance (ODA) loan in budgetery support.
To this end, Japanese ambassador in Dhaka ITO Naoki and economic relations division secretary Fatima Yasmin signed an exchange of notes on Wednesday.
This financial assistance is provided with very favourable terms. The interest rate of the loan is 0.01 per cent.
The repayment period is 11 years after the grace period of four years, says a spokesperson for the Japanese embassy in Dhaka.
The loan will be co-financed with the Manila-based Asian Development Bank in a bid to ensure rapid and effective utilisation of the loan.
Up until now, Japan has provided support to the tune of 13-million dollars in emergency response.
Covid-19 in Bangladesh through international organisations and provided personal protective equipment to hospitals through JICA.
Additionally, Japan and Bangladesh on July 16 signed an exchange of notes on $10-million grant aid 'Economic and Social Development Programme' for medical equipment like CT scanner and X-ray machine.
All these grants are focused on the medical and health sectors currently combating the novel coronavirus.
The purpose of the assistance signed on Wednesday is to provide funding for additional financial expenditure by Bangladesh to implement its economic stimulus packages.
Unlike project loans, this aid is very flexible in its use with the only condition being a prohibition on items such as military use.
This is the first time in the ODA history that such a loan has been provided in this form for the convenience of the government of Bangladesh, the spokesperson said.
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