B Mirror Desk :Japan has announced a loan package valued at approximately US$582 million to support improvements in energy and food safety in Bangladesh, as the nation seeks to bolster its foreign currency reserves. This funding is part of Japan’s 45th overseas development assistance (ODA) initiative, with two loan agreements signed on Tuesday in Dhaka between the Bangladeshi government and Japanese officials.
The agreements were formalized by Md. Shahriar Kader Siddiky, Secretary of the Economic Relations Division (ERD) within the Ministry of Finance of Bangladesh, along with SAIDA Shinichi, the Japanese Ambassador to Bangladesh, and ICHIGUCHI Tomohide, Chief Representative of the JICA Bangladesh Office.
The Japan International Cooperation Agency (JICA) will allocate $388 million (JPY 57,120 million) for the ‘Matarbari Ultra Super Critical Coal-Fired Power Project (VIII)’ and an additional $194 million (JPY 28,699 million) for the ‘Food Safety Testing Capacity Development Project.’
As part of the Food Safety Testing Capacity Development Project, a reference laboratory, an office, and a training center will be established in Dhaka, along with two divisional laboratories in Chittagong and Khulna, aimed at enhancing the food safety testing capabilities of the Bangladesh Food Safety Authority. The total project cost is estimated at Tk.24.09 billion, with the Bangladeshi government contributing Tk.3.91 billion and JICA providing Tk.20.19 billion. The project is scheduled for implementation from January 2025 to December 2034.
The loan will be offered at preferential interest rates of 1.85 percent for construction, 0.55 percent for consultancy services, and a one-time front-end fee of 0.20 percent. The repayment period is set for 30 years, which includes a 10-year grace period.
Coal Power Generation Company Bangladesh Limited (CPGCBL) is currently executing a project valued at Tk 566.94 million, with funding contributions from the Government of Bangladesh (GOB) amounting to Tk 72.21 billion, JICA providing Tk 479.45 billion, and CPGCBL contributing Tk 15.28 billion from its own resources.
This initiative aims to address the increasing demand for electricity and enhance the stability of the power supply in the country. The Matarbari power project is being developed in the coastal region of Matarbari, located in the Maheshkhali Upazila of Cox’s Bazar district.
The project is scheduled for completion by December 2026. As of February 2025, the physical progress stands at 92 percent, while financial progress is at 86 percent, according to officials from the Economic Relations Division (ERD).
JICA is supporting this project through various phases, having already disbursed JPY 655,310 million across seven tranches. In the latest development, under the 8th tranche of the 45th Japanese ODA loan package, JICA has confirmed an additional JPY 57,120 million, equivalent to approximately US$ 388 million.
The loan carries an interest rate of 1.95 percent for construction, 0.55 percent for consultancy services, and a front-end fee of 0.20 percent. The repayment term is set for 30 years, which includes a 10-year grace period.
Japan is recognized as Bangladesh’s largest bilateral development partner, having committed a total of US$ 32.62 billion in loans and grants for infrastructure projects across various sectors, including communications, power and energy, agriculture, education, health and family welfare, water supply and sanitation, rural development, environmental development, and human resource development.
