Govt to sign Tk 10.70b credit deal with JBIC soon

FE Team | Published: July 06, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

S M Jahangir
The government will soon sign a Tk 10.70-billion credit deal with the Japan Bank for International Cooperation (JBIC) for implementing three power projects including installation of a 360-megawatt (MW) plant at Haripur.
Installation of two other electricity sub-stations -- one by the Power Generation Company of Bangladesh and another by the Rural Electrification Board (REB) -- will also come under the proposed credit package, official sources said.
"Japan has already pledged 17.76 billion yen (Tk 10.70 billion) as soft credit for financing three power projects. An agreement in this connection is expected to be signed between the Economic Relations Division (ERD) of the government of Bangladesh and the JBIC by one or two weeks," a senior Power Division official said.
Terming the proposed credit as one of the cheapest ODA (overseas development assistance) loans for Bangladesh, official sources said it will be available at a nominal 0.01 per cent rate of interest.
Besides, the ODA would also be repayable in 40 years with a 10-year grace period, they mentioned.
Under the credit arrangement, a process is on to appoint a foreign consultant for preparation of bidding documents for the proposed projects, said an official.
Some consultancy firms have already been short-listed, they said, adding that one of them will be appointed soon after the signing of the credit deal.
"Hopefully, a consultancy firm will take over the responsibility of preparing the bid documents by September next," said the official.
International tenders will also be invited for the three power projects immediately after the completion of bid document in February, 2008, he noted.
The official, however, said a high-powered delegation from the JBIC will arrive in Dhaka shortly to discuss the financing arrangement with the authorities concerned, and also to facilitate the proposed credit agreement.
Since Japan is a member of the Organisation for Economic Cooperation and Development (OECD), an international organisation helping governments tackle the economic, social and governance challenges of a globalised economy, it requires to follow the best practices with regard to credit support, he mentioned.
Officials, however, said the Power Division will take necessary steps to facilitate the early implementation of the proposed projects.
They also expected that the country's nagging power problem would partly be overcome with the commissioning of the 360MW Haripur combined cycle power plant.
Besides, the installation of the two proposed power sub-stations will also help improve the country's overall electricity distribution and transmission systems, they said.
Meanwhile, the JBIC has been supporting the country's development activities, especially in areas of rural infrastructure, transportation, telecommunications, power, water supply, education and flood protection.