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Japan’s 41st ODA loan worth USD 3.2b signed today

Japan will provide the largest ever package of USD 3.2 Billion to help Bangladesh become a middle income country and to conquer the novel coronavirus pandemic.

ITO Naoki, Ambassador of Japan to Bangladesh and Ms. Fatima Yasmin, Secretary, Economic Relations Division, Ministry of Finance signed Exchange of Notes of the 41st Official Development Assistance (ODA) of Japan to Bangladesh in Dhaka today ( Wednesday).

This year’s loan package comprises assistance of seven projects amounting to JPY 338.247 billion (approximately USD 3.2 billion), the largest ever loan package since its inception in 1974. Based on this agreement between the two counties, HAYAKAWA Yuho, Chief Representative of JICA Bangladesh Office and Ms. Fatima Yasmin signed a relevant loan agreement, said a press release of Japan Embassy

Japan has been the single largest bilateral donor for Bangladesh since 2012, and the total amount of its aid as Yen Loan has reached USD 22 billion (commitment base).

The 41st Exchange of Notes covers the following projects:

(1) Jamuna Railway Bridge Construction Project (II) (loan amount: 89.016 billion yen)

(2) Hazrat Shahjalal International Airport Expansion Project (II) (loan amount: 80 billion yen)

(3) Dhaka Mass Rapid Transit Development Project (IV) (loan amount: 72.194 billion yen)

(4) Dhaka Mass Rapid Transit Development Project (Line 5 Northern Route) (I) (loan amount: 55.696 billion yen)

(5) Chattogram – Cox’s Bazar Highway Improvement Project (E/S) (loan amount: 1.906 billion yen)

(6) Food Value Chain Improvement Project (loan amount: 11.218 billion yen)

(7) Urban Development and City Governance Project (loan amount: 28.217 billion yen)

● Interest Rate: 0.65 % per annum (The part concerning payments to consultants: 0.01% per annum)

● Repayment period: Twenty years after the grace period of ten years

Up to the present, the government of Japan has provided approximately USD 13 million as the emergency support to tackle COVID-19 in Bangladesh through international organizations,  as well as provided PPE to hospitals through JICA.

Additionally, on July 16 Japan and Bangladesh signed the Exchange of Notes on Japanese Grant aid “Economic and Social Development Programme”(USD 10 million) for the medical equipment including CT Scanner, X-ray Machine.

These aids focused on the medical and health sectors currently combating the novel coronavirus.

On August 5, 2020, both countries signed Exchange of Notes of the COVID-19 Crisis Response Emergency Support Loan (approximately USD 331 million), which is the first budget support from Japan to Bangladesh.

The purpose of the financial assistance is to provide funding for additional financial expenditure by the Government of Bangladesh to implement the economic stimulus package.

Japan will continue to extend its support for the development of Bangladesh as the country is on its way to achieve the highest growth in Asia in this decade of the century.