$1.18b concessional loan deal likely to be signed with Japan

The government is likely to sign a US$1.18 billion concessional loan deal with Japan for five development projects during the visit of Prime Minister Sheikh Hasina in Tokyo next week, officials said Thursday.
 "Bangladesh will sign an exchange of note with Japan for its assured $1.18 billion overseas development assistance (ODA) package for the five projects," said a ministry of finance official.
Prime Minister Sheikh Hasina will visit Tokyo from May 25 to May 28 for expanding bilateral ties between the two countries.
Last year, the Japan International Cooperation Agency (JICA), the largest bilateral development partner, assured Bangladesh of providing the $1.18 billion loan for the five development projects including a 1,200-megawatt coal-based power station.
The donor would provide $405.52 million loan for setting up the proposed 1,200 megawatt (MW) capacity coal-fired power station at Matarbari in Cox's Bazar and $300 million for inclusive city governance project.
Besides, the JICA will also provide $250 million loan 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.
Meanwhile, Japanese Foreign Minister Fumio Kishida during a visit in March last in Dhaka pledged the $1.18 billion ODA package for Bangladesh.
Japan, in its last 34th ODA package, provided $2.1 billion soft loan to Bangladesh on March 10 last year for four projects.
The four projects are Kanchpur, Meghna and Gumti 2nd bridge construction and existing bridges rehabilitation project, Karnaphuli water supply project (Phase-2), northern Bangladesh integrated development project and renewable energy development project.
Earlier, the Economic Relations Division (ERD) completed negotiations with the JICA for getting the $1.18 billion 35th ODA package, said MoF officials.
The rate of interest of the Japanese ODA package is 0.01 per cent per annum which is payable in 40 years, including 10 years' grace period.  The MoF officials said the Prime Minister is likely to seek extended support from the Japan government for some other priority projects including the railway bridge on the Jamuna river parallel to the Bangabandhu Multipurpose Bridge and a tunnel or a bridge between Phulchari and Bahadurabad Ghat across the Jamuna river.  The Prime Minister will also offer a special economic zone for Japanese investors to invest in Bangladesh, the officials said.
The Japanese government provided loan and grants totalling $11 billion until last year to Bangladesh.