Confirmation of Japanese nearly US$1.20 billion worth of soft loan for five development projects in Bangladesh under an aid package is likely to be delayed due to the prevailing political deadlock in the country, officials said Monday.
"The JICA (Japan International Cooperation Agency)-offered nearly $ 1.2 billion loan was to be signed by March this year. But it may not be possible this month. Political impasse in Bangladesh is a key reason for the delay in the loan confirmation," said a senior official of the ministry of finance (MoF).
Earlier, the Japanese donor JICA completed negotiations with the Bangladesh government a couple of months back and assured it of confirming the loan by March this year.
"We have given reminder to the JICA's Dhaka office to complete the loan confirmation process. But it is being delayed," said the official.
"If we miss the March deadline, the loan signing deal could be delayed further as the Japanese financial year will end this month. Before signing the agreement, the loan will have to be approved by the Japanese parliament in the new financial year. It could take some more months," he added, preferring anonymity.
Earlier, Japan has assured of providing nearly $1.2 billion soft loan under the 36th Official Development Assistance (ODA) package for five infrastructure-development projects in Bangladesh, the priority one being a special economic zone (SEZ) exclusively for Japanese investment.
Government officials said the main objective of the proposed Japanese financial support is to develop an exclusive SEZ in Chittagong to bring in Japanese investment.
A fact-finding mission from the JICA visited Dhaka in September last year to work out detailed financing plan for the five proposed projects under the 36th ODA package.
The official said the JICA has conducted a feasibility study to set up the special economic 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," said another official at the MoF.
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 official said.
During the visit of Japanese Prime Minister Shinzo Abe to Dhaka last year, the two countries agreed to develop a SEZ for the Japanese investors.
The four other projects under the 36th ODA aid package are: Dhaka-Chittagong national power grid strengthening; western Bangladesh bridge improvement; maternal, neonatal and child health care; and local government improvement projects.
"We are waiting for the loan signing ceremony. When Bangladesh will get confirmation of the Japanese very much concessional loan, the government agencies concerned will go for action to develop the infrastructure and other necessary works," said the MoF official.
He said: "This is reality that if the political deadlock continues in the country, the foreign people avoid visiting here. So, the representatives from the Japanese development partner are likely to avoid facing the prevailing situation in Bangladesh. It is delaying the aid confirmation."
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