Japan will provide US$1.22 billion (JPY165,861 million) in loans for two development projects, including MRT-5 (northern route), as it signed a deal with Bangladesh on Tuesday.
Under the 43rd Official Development Assistance (ODA) aid package, the Japan International Cooperation Agency (JICA) will provide the loans to build the MRT in Dhaka and develop townships in Chattogram.
Economic Relations Division (ERD) Secretary Fatima Yasmin, Japan Ambassador to Bangladesh ITO Naoki, and JICA Bangladesh Chief Representative Yuho Hayakawa signed the loan agreement.
Under the deal, JICA will provide $979.8 million (JPY 133,399 million) in loans for constructing the MRT-5 from Hemayetpur to Vatara in the city.
The Dhaka Mass Transit Company Limited (DMTCL) will build the 20km metro rail line on Hemayetpur-Aminbazar-Gabtoli-Mirpur 1-Mirpur 10-Kochukhet-Cantonment-Banani-Gulshan 2-Notunbazar-Vatara route.
The Japanese development partner confirmed another $238.38 million (JPY32,462 million) worth of loans for the Southern Chattogram regional development programme.
Local Government Engineering Department (LGED) will implement the municipality development works at some small towns across the region.
Earlier, JICA provided JPY63,074 million worth of loans - JPY55,696 million for constructing MRT-5 line and JPY7,378 million for engineering services.
The DMTCL has already started work to build the 20km MRT-5 line as it is now preparing the detailed design of the line. The state-owned mass transport company will complete the line by the year 2028.
Meanwhile, JICA had also extended its support, providing $0.94 million (JPY 128 million) worth of additional grant for installing two modern Radars in Dhaka and Rangpur city for improving meteorological department's capacity.
The newly signed $1.22 billion Japanese loan will mature in 30 years with a grace period of 10 years.
JICA will charge 0.70 per cent interest rate for the loans to be used for infrastructure development and 0.01 per cent for the loans to be utilised for consultancy services.
Besides, the Japanese lender will charge 0.20 per cent as the front end fee (at a time) from the borrower country Bangladesh for its loans.
Japan is Bangladesh's largest bilateral development partner as it has confirmed $27.43 billion and disbursed $17.96 billion till last month May, ERD data showed.
kabirhumayan10@gmail.com
