Govt likely to sign loan agreement with JICA: A welcome move
According to Economic Relations Department (ERD) officials, Bangladesh government hopes to ink an agreement on a $2.80 billion loan with the Japan International Cooperation Agency (JICA)--as part of JICA's 42nd Official Development Assistance (ODA) package. Japan is one of the largest development partners of Bangladesh. Since the independence of Bangladesh, the country has been offering aid, loan and other types of assistances. In fact, Japan is the largest donor of foreign aid to Bangladesh.
However, Bangladesh has asked for a loan for five infrastructure projects in the 42nd loan package. The projects are, Dhaka Mass Rapid Transit Line 1 (2nd Tranche), Dhaka Mass Rapid Transit Line 6 (5th Tranche), Matarbari Coal Fired Power Project (6th Tranche), Matarbari Coal Fired Power Project (2nd Phase) and Southern Chattogram Regional Development Project. It is worth mentioning that the country, currently, is providing financial and technological support in these five infrastructure development projects. In addition to that, the country has confirmed that it will provide a Health Sector Development Policy Loan in the Japanese fiscal year 2021.
The Matarbari Coal Fired Power Project and Dhaka Mass Rapid Transit Line Project require a quick disbursement of funds. As such, the government wants to complete the loan agreement process in both projects beforehand. JICA goes for loan agreements in several stages depending on the importance and progress of a project. The asked loan package agreement will be of three phases. In the first phase, an agreement of $1.05 billion in the loan may be signed this month for the Matarbari Coal Fired Power Project (6th Tranche) and Dhaka Mass Rapid Transit Line 6 (5th Tranche).
Accordingly, the loan agreement will be signed for the sixth instalment for the Matarbari Power Plant project and the fifth instalment for the Metrorail (MRT-6) project. The government aims to launch Metrorail from Uttara to Agargaon in December next year. Till August this year, 88 per cent of work on this route has been completed while from Agargaon to Motijheel work is 68 per cent complete. Hopefully, JICA has agreed to finance the project in its 42nd ODA package.
Meanwhile, Japan has expressed interest in assisting in the development of infrastructure in South Chattogram and Cox's Bazar district by focusing on Matarbari, which can accelerate the economic development of the country. With the procrastination, each time cost also increases. Undoubtedly, implementing a project in time is very important. We hope that implementation of the projects will speed up as the Covid-19 situation has improved in the country. We also hope that the demand for foreign funding will also be fulfilled largely with Japn's timely allocation of loan.