The Japan International Cooperation Agency (Jica) has agreed to provide fresh loan financing for eight projects in Bangladesh, which include upgrading the Chattogram-Cox's Bazar highway from two lanes to four lanes.
The Japanese government agency will fund these projects under its 41st official development assistance loan package.
According to the document, made public by the Economic Relations Division on November 20, the amount of Jica's loans for these projects will be around $3 billion over the next fiscal year.
Officials at the Economic Relations Division said the precise amount will be finalised through bilateral negotiations.
A Japanese fact-finding mission has already visited Bangladesh. It gave its primary consent to the funding of the projects. The final agreement in this regard is expected to be signed in June 2020.
Under its 40th official development assistance loan package, Jica provided Bangladesh with Tk11,000 crore in loans for various development projects.
The amount was Tk5,276 crore, Tk2,964 crore,and Tk3,252 crore respectively under the 39th, 38th and 35 packages.
Shahidul Islam, additional secretary at the Economic Relations Division, said, "The amount of the loan under the 41st loan package of Jica will be disclosed during the negotiation period."
The interest rate of Jica's loan is 0.9 percent. There are also 0.01 percent consultation service fee, and 0.02 percent front end fee. The loan must be repaid in 30 years with a 10-year rebate.
The projects earmarked for Jica's funding in the next fiscal year are the Chattogram-Cox's Bazar Highway Improvement (Intersection Improvement), Jamuna Railway Bridge Construction, Hazrat Shahjalal International Airport Expansion, Dhaka Mass Rapid Transit Development (MRT-6), Dhaka Mass Rapid Transit Development Line-5, Food Value Chain Financing Project and Urban Development and City Governance.
The two-lane Chattogram-Cox's Bazar highway will be upgraded to a four-lane one under Public Private Partnership (PPP). Jica will provide funding for building flyovers and bypasses in the busiest places of the highway in Patia, Dohazari, Keranirhat, Lohagora, and Chakaria.
Officials at the Road Transport and Highways Division said an organisation known as Swedes Consultant conducted a survey for the project with funding from the Asian Development Bank in 2013-2015. The Bangladesh University of Engineering and Technology (Buet) has been involved in designing the upgradation project.
The officials said several projects are being implemented in Matarbari of Maheshkhali, including a coal power plant and a port, on Japanese funding. Traffic congestion on the highway has increased because of these projects. The flyovers and bypasses will help ease the situation.
The Road Transport and Highways Division has prepared a Tk13,866-crore proposal to upgrade the 136-kilometre highway.
On May 6, 2017, while inaugurating the Marine Drive in Cox's Bazar, Prime Minister Sheikh Hasina pledged to upgrade the highway into a four-lane one.
Shahidul Islam at the Economic Relations Division, said, "Infrastructural development in Gazipur, Narayanganj and Cumilla city corporations, and in Cox's Bazar Municipality will be done under the Urban Development and City Governance project. A proposal has been prepared to include Rangpur and Mymensingh city corporations in the project."
The estimated cost of the Jamuna Railway Bridge Construction project is Tk9,734.07 crore. Jica will provide Tk7,724.32 crore. The remaining Tk2,009.32 crore will be provided from the government fund.
Jica has been providing loans for the project from the beginning. Under the 37th official development assistance loan package, it provided 2,464 million Japanese Yen for consultation services for the rail bridge project. Under the 39th loan package, it provided 37,217 million Japanese Yen as loan.
The project was launched in January 2016. Till August 2019, only 8 percent of the work was done.
The estimated cost of the Hazrat Shahjajal International Airport Expansion project is Tk13,610.46 crore. The Jica will provide Tk11,214.78 crore, while the remaining Tk2,395.68 crore will be provided from state coffers. Under its 38th loan package, Jica provided 76,825 million Japanese Yen for the project.
Jica has already provided a substantial amount of loans through its 33rd, 37th, 39th loan packages for the Dhaka Mass Rapid Transit Development (MRT-6). The Japanese government will provide Tk16,594.59 crore of the Tk21,985.0-crore project. The rest of the funds will be provided by the Bangladesh government.
Till August 2019, 30.05 percent work of the mega project was completed. The government wants to inaugurate the metro rail in 2021.
The Dhaka Mass Rapid Transit Development (MRT-5) project was approved by the Executive Committee of the National Economic Council (Ecnec) on October 15, 2019. Japan will finance Tk29,117.05 crore of the Tk41,238.54-crore project, which is projected to end in 2028. Earlier, Jica provided 7,358 million Yen under its 39th loan package only for consultant services for the project.
Starting from Aminbazar, the MRT-5 project will travel through Gabtoli, Mirpur-1, Mirpur-10, Kochukhet, Banani, Gulshan-1, Notun Bazar, ending in Vatara.
The Food Value Chain Financing project, initiated by the Ministry of Industries, will be implemented by the Infrastructure Finance Fund Limited. Agro-business and food processing companies of the country will benefit from the project. A team from Jica visited Bangladesh on November 07 in connection with the project.