Japan is planning to invest $6.35 billion, equivalent to 1 trillion Japanese yen, in Bangladesh over the next five years through its private sector, according to a special report by Japanese international news outlet Nikkei Asia.

The investment plan is expected to be formally announced in a joint statement at an upcoming bilateral summit between Japanese Prime Minister Sanae Takaichi and Bangladesh Prime Minister Tarique Rahman, the report said.

The initiative aims to strengthen trade and economic cooperation between the two countries and transform Bangladesh into a major industrial and investment hub in South Asia.

The proposed Japanese investment will focus on several key sectors, including automobiles, advanced manufacturing, power and energy infrastructure, and the development of special economic zones.

In the automobile and manufacturing sectors, the investment is expected to support the development of the automotive industry and expand advanced manufacturing capabilities in Bangladesh. In the power and energy sector, the focus will be on modernising infrastructure, developing new energy sources and establishing reliable connectivity.

Japanese companies are also expected to expand their factories and business operations in the Bangladesh Special Economic Zone, developed with the involvement of major commercial partners, including Japanese trading house Sumitomo Corporation.

Alongside the investment initiative, progress is also being made towards signing a comprehensive Economic Partnership Agreement (EPA) between Bangladesh and Japan, Nikkei Asia reported.

Economic analysts believe that successful implementation of the five-year investment plan could accelerate Bangladesh’s industrialisation, infrastructure development and overall foreign direct investment (FDI) inflows, creating new opportunities for economic growth and employment.