New Japan govt prefers loan to aid for large dev projects
Tuesday, 6 July 2010
Munima Sultana
The new Japanese administration prefers to assist Bangladesh with loans rather than 'grant-aid' in its large-scale infrastructure development projects like transport and power sectors, a senior official at Japan International Cooperation Agency (JICA) said.
Mayumi Endoh, senior representative of JICA, said the Japanese government wants to continue its support to the country's various development projects in transport and power sectors as before, but it plans to assist in these sectors through other tools of funding.
"Japan is very much interested in assisting the Bangladesh infrastructure development projects which are financially viable. But the new government has decided not to provide 'grant-aid' to big infrastructures," she told the FE in an interview last week.
Responding to queries about her country's decision to withdraw support for the Moghbazar flyover, Endoh said JICA has regretted to the Bangladesh government the decision to shelve 'grant-aid' for big infrastructures.
"It does not mean any change in funding. We have kept funding Dhaka city metro rail project," she said adding Tokyo has its interest for the project for its financial viability.
"The new administration is more cautious about 'grant-aid' and realises Bangladesh's ability to take loans for large infrastructures as our loan is almost like a grant," said the JICA senior official adding that Japanese loans' interest rate is only 0.01 per cent with 10 years' grace period and 40 years' repayment period.
Although the second largest world economy, Japan has undergone a change in its government last June one month after the country's new fiscal year began, the JICA senior representative said.
She added Tokyo's decision on funding Bangladesh's major infrastructure projects including the one for Padma Bridge would come at the end of this year.
The Japanese lending agency calculated that the rate of Japanese loan disbursement improved to 80 per cent this year, which was on an average 10 to 20 per cent.
Japanese aid has so far supported health, education, water, sanitation and power sector projects, but the country has continued its financial support since the 1970s.
Ms Endoh said the new administration wants to focus on new initiatives including more collaboration with the private sector and assistance to social businesses apart from funding large infrastructure projects.
The new Japanese administration prefers to assist Bangladesh with loans rather than 'grant-aid' in its large-scale infrastructure development projects like transport and power sectors, a senior official at Japan International Cooperation Agency (JICA) said.
Mayumi Endoh, senior representative of JICA, said the Japanese government wants to continue its support to the country's various development projects in transport and power sectors as before, but it plans to assist in these sectors through other tools of funding.
"Japan is very much interested in assisting the Bangladesh infrastructure development projects which are financially viable. But the new government has decided not to provide 'grant-aid' to big infrastructures," she told the FE in an interview last week.
Responding to queries about her country's decision to withdraw support for the Moghbazar flyover, Endoh said JICA has regretted to the Bangladesh government the decision to shelve 'grant-aid' for big infrastructures.
"It does not mean any change in funding. We have kept funding Dhaka city metro rail project," she said adding Tokyo has its interest for the project for its financial viability.
"The new administration is more cautious about 'grant-aid' and realises Bangladesh's ability to take loans for large infrastructures as our loan is almost like a grant," said the JICA senior official adding that Japanese loans' interest rate is only 0.01 per cent with 10 years' grace period and 40 years' repayment period.
Although the second largest world economy, Japan has undergone a change in its government last June one month after the country's new fiscal year began, the JICA senior representative said.
She added Tokyo's decision on funding Bangladesh's major infrastructure projects including the one for Padma Bridge would come at the end of this year.
The Japanese lending agency calculated that the rate of Japanese loan disbursement improved to 80 per cent this year, which was on an average 10 to 20 per cent.
Japanese aid has so far supported health, education, water, sanitation and power sector projects, but the country has continued its financial support since the 1970s.
Ms Endoh said the new administration wants to focus on new initiatives including more collaboration with the private sector and assistance to social businesses apart from funding large infrastructure projects.