Bangladesh Monday signed 'Exchange of Notes' and 'Loan Agreements' with Japan for availing $2.665 billion (Japanese Yen 292.279 billion) financing for two development projects and one as budget support loan.
Fatima Yasmin, Secretary, Economic Relations Division (ERD) signed the 'Exchange of Notes' and the 'Loan Agreements' on behalf of the government of
Bangladesh while ITO Naoki, The Ambassador of Japan in Bangladesh, signed the 'Exchange of Notes'. Yuho Hayakawa, Chief Representative, JICA Bangladesh Office, Dhaka signed the 'Loan Agreements' on behalf of the government of Japan.
The signing ceremony was held at NEC-2 conference room in the city's Sher-e-Bangla Nagar area. Finance Minister AHM Mustafa Kamal was connected virtually while representatives of Finance Division, Power Division, Road Transport and Highways Division, CPGCBL, PGCB, RHD, DMTCL and other officials of government of Bangladesh, Embassy of Japan and JICA were present in the loan signing ceremony, said a Finance Division press release.
Speaking on the occasion, Kamal said Japan is Bangladesh's most trusted bilateral friend. "Our Father of the Nation's historic visit of Japan during 18-24 October in 1973 laid the foundation of Bangladesh-Japan relationship.
That was the beginning of the partnership which strengthened over the years," "We express our deep gratitude to the government of Japan for its' involvement in a number of on-going iconic mega projects including Bangabandhu Road and Rail Bridge over river Jamuna, Metro Rail Networks at Dhaka city, HazratShahjalal International Airport 3rd Terminal, Matarbari Coal Fired Power Plant, Matarbari Sea Port etc," he added.
The Finance Minister further said that at the beginning of COVID-19
pandemic last year, Bangladesh approached Japan for budget support and it received very quick positive response. He informed that the government of Japan provided first ever budget support loan assistance of $320 million to Bangladesh last year and in line with that $365 million under 'COVID-19 Crisis Response Emergency Support Loan Phase-2 which was signed today.
"It is also a great pleasure for us that two loan agreements of $2.3 billion under 1st Phase of 42nd Yen Loan Package for 6th tranche Matarbari Ultra Super Critical Coal-Fired Power Project and 2nd tranche of Dhaka Mass Rapid Transit Development Project (MRT, Line 1) were signed today," Kamal added.
For the two development projects under the 42nd ODA Loan Package (1st batch), the rate of interest is 0.60% for construction, 0.01% for consultancy service, Front End Fee (at a time) 0.2%, and repayment period is 30 years which includes 10 years grace period. For'COVID-19 Crisis Response Emergency Support Loan Phase 2', interest rate is 0.55%, Front End Fee (at a time) 0.2%, repayment period is 30 years which includes 10 years grace period.
The projects which are being implemented with these financing are: Matarbari Ultra Super Critical Coal-Fired Power Project (6th tranche):This project is being implemented to meet growing electricity demand and to improve stable power supply by installing 1200 MW (600MWx2 units) Ultra Super Critical Coal-Fired Power Plant at Matarbari Area of Maheshkhali upazila under Cox's Bazaar district. Power transmission line, access road, township development, channel for Matarbari Port works are also going on under this project. Total cost of project is Taka 35,984.46 crore (GOB Taka 4,926.66 cr +JICA Taka 28,939.03cr + CPGCBL Taka 2,118.77 cr.).
Project implementation period is July 2014 to June 2023. Up to October 2021, physical progress of the project is 49% and financial progress is 51%.
JICA is providing assistance for this project in different phases. JICA has already provided 300,502 million JPY ($2.63 Billion) in 5 tranches. Under this 6th tranche of ODA Loan for this project, JICA will provide 137,252 million JPY ($1.20 Billion).
Dhaka Mass Rapid Transit Development Project (Line 1) (2nd tranche):31.241 km long MRT Line-1 has two routes: (a) Airport Route (Airport to Kamlapur) and (b) Purbachal Route (Notun Bazar to Pitalganj). The 19.872 Kilometre long underground Airport Route will have 12 Stations. This portion will be the first underground rail route of the country.
The Notun Bazar Station will have an inter-connection with the MRT Line-5. The 11.369 kilometer long Purbachal Route of MRT Line-1 will have 9 stations.
The detail study, survey and basic design have been completed for both the routes. Now detailed design is going on. The total estimated cost is of the project is Taka 52,561.43 crore (GOB Taka 13,111.11 cr +JICA Taka 39,450.32cr) and implementation period is September 2019 to December 2026.
JICA is providing assistance in different phases to implement this project. Earlier JICA has provided 5,593 million JPY ($49.06Million) for Engineering Services and 52,570 million JPY($461.16 Million) for Construction. Under 2nd tranche of this ODA Loan, JICA will provide 115,027 million JPY ($1.10 Billion).
COVID-19 Crisis Response Emergency Support Loan Phase 2: The objectives of the Program are to realize resilient health system through concessional financing by supporting smooth implementation of the policies to strengthen COVID-19 response capacity in health sector, to enhance economic and physical access to health services towards the achievement of Universal Health
Coverage and to improve health finance thereby contributing to promotion the economic stabilization and development efforts of the country.
Bangladesh is going to get such budget support of 40 Billion JPY ($365 million) with interest rate 0.55%, Front End Fee (at a time)0.2%, repayment period is 30 years which includes 10 years grace period. Finance Division is the executing Ministry for budget support and Ministry of Health and Family Welfare will implement policy actions under the loan.
Earlier Japan provided 35 billion JPY ($320 million) as budget support in the year 2020 to support Bangladesh's countercyclical expenditure plan to combat the impact of COVID-19 pandemic.
