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Bangladesh,Japan : JAPAN provides $1.18 billion in loan to BANGLADESH

June 19, 2014

Japan gave Bangladesh$1.18 billion in loans for Matarbari coal-fired power plant and 4 other projects as Japan seeks to deepen its ties with the country.

$406 million will be spent only to build the power plant, part of a $4.4 billion project on the Matarbari Island of Cox's Bazar, according to a deal signed between Japan International Cooperation Agency (Jica) and the Economic Relations Division (ERD).

Jica will lend Bangladesh$3.74 billion in phases for the mega project.

Bangladesh and Jica identified Matarbari as the tipping point for carrying out the Bay of Bengal Industrial Growth Belt Initiative (BIG-B).

This island and the surrounding area has the potential to be transformed into an integrated industrial and trading hub, as well as a central energy base.

The project has 2 components: a 1,200 MW power plant, which will be the world's most efficient and environment-friendly plant, and the first ever deep sea port in Bangladesh.

The power plant will start supplying electricity to the national grid by 2022. Jica and ERD signed 4 other projects.

In one of the agreements, Japan will provide $231 million for a project aimed at enhancing the efficiency of gas use to ensure gas supply for vital economic growth.

Jica will lend $300 million for the development of 5 city corporations, Rangpur, Gazipur, Narayanganj, Comilla and Chittagong, through reform of governance, city planning and infrastructure construction.

Jica will lend $97 million in the form of agricultural loans and agricultural training services to be provided through microfinance institutions to increase productivity and diversity of marginal farmers.

The loans have been provided at only 0.01% interest per annum and with 40-year repayment period and 10-year grace period.

Tokyo gave Bangladesh more than 1 trillion Japanese yen ($9.81 billion) in loans, 500 billion yen ($4.9 billion) in grant and 65 billion yen ($638 million) in technical cooperation.

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Source: TendersInfo (India)

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