Japan lending Bangladesh $581 million

Japan is going to lend Bangladesh US$581 million for improving power generation and ensuring food safety, officials said Monday, in aid to the interim government.
The Economic Relations Division (ERD) under the Ministry of Finance (MoF) and Japan are likely to sign two loan deals on March 25 to this effect MoF officials said.
Japan International Cooperation Agency (JICA) under the 45th Overseas Development Assistance (ODA) package would provide $386.72 million (8th tranche) loan for completing the Matarbari Ultra Super Critical Coal-fired Power Project.
Another $194.30 million would be confirmed for upgrading capacity of the Bangladesh Food Safety Authority (BFSA) in ensuring the food quality and its safety for the people.
"We are going to sign loan deals on March 25. The loans will be provided under the ongoing 45th ODA package. The funds will be utilized for completing Matarbari coal-fired power-plant project and ensuring food safety in Bangladesh," said a senior MoF official.
The proposed $386.72-million loan will be the last tranche for the Matarbari coal-fired power project, which is already supplying 1200 megawatts (MW) of power into the national grid, he added.
Earlier in September 2023, JICA confirmed the 7th tranche of the loan for the Matarbari power project, and this will be the 8th and last instalment.
Under the 44th Japanese ODA Loan Package (2nd batch), Japan extended financial support of 217,556 million Japanese Yens (JPY), approximately $1,500 million, for the seaside power project.
The Japanese aid agency has been a crucial partner in different phases of this project, having already disbursed 437,754 million JPYs in six tranches. The 7th tranche, under the ODA Loan for this project, involves an additional 217,556 million JPYs.
Meanwhile, the government has recently approved a project of the BFSA where JICA will provide the proposed $194.30 million worth of funds and work for improving the food safety and security across the country, the MoF official said.
The ECNEC early February approved a Tk 24.09 billion 'Food Safety Testing Capacity Development Project' run by the Bangladesh Food Safety Authority under the Ministry of Food.
The project will be implemented by December 2034.
The first phase of the 45th Japanese ODA package brought approximately $257 million in November last year. Under the loans, $11.07 million was provided for Chittagong WASA and $249.34 million for the Jamuna Rail Bridge Construction Project (III).
Japan usually charges 1.70-percent interest rate for construction work and 0.40 per cent for consultancy services. Additionally, there is a one-time front-end fee of 0.2 per cent.
The repayment period is spread over 30 years, including a 10-year grace period.

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