Japan’s 34th ODA Loan Package signed today
Dhaka: 10 March 2013
On March 10, 2013, H.E. Mr. Shiro Sadoshima, Ambassador of Japan to Bangladesh and Mr. Md. Abul Kalam Azad, Secretary, Economic Relations Division, Ministry of Finance, on behalf of their respective governments, signed Exchange of Notes in Dhaka with regard to the 34th ODA Loan Package. Dr. Takao Toda, Chief Representative of JICA, and Mr. Md. Abul Kalam Azad also signed Loan Agreement in this regard.
The 34th ODA Loan Package will serve for financing the following 4 projects, amounting to 95,683 million Yen (1,029 million USD), which is the largest ever package exceeding the 33rd package signed in February. The concessionality of the loan is most generous with the interest rate at 0.01% per annum and 40-year repayment period with 10-year grace period.
The summary of respective projects is as follows:
1. The Kanchpur, Meghna and Gumti Second Bridges Construction and Existing Bridges Rehabilitation Project (I) – Vitalize Economic Corridor National Highway No.1
To mitigate rapidly increasing traffic congestion along Dhaka-Chittagong National Highway No.1 that carries 80% of both domestic freight and passenger traffic, the project will construct three new 4-lane bridges adjacent to the existing three important bridges which will also be rehabilitated under the same project. By the completion of this project, combined time of crossing the bridges is expected to be reduced from 23min to 5min and average traffic speed will be increased from 14km/h to 61km/h, with the traffic volume increased by two-fold to 1.4 lakh vehicle/day. In addition, the project will contribute to improving the safety through introducing new seismic standard as well as by strengthening the foundation of the bridges against riverbed scouring, and to the maintenance by installing overload control equipment.
Meghna and Gumti Bridges were constructed by Japan’s grant aid in 1990’s and thus known as “Japan-Bangladesh Friendship Bridges”.
The Loan up to 28,945 mil JPY (311 mil USD) for phase one will be appropriated for the construction of the bridges and consulting services. Total project cost is estimated at 80,000 million BDT. Executing Agency is Roads and Highways Department, Roads Division, Ministry of Communication.
2. Karnaphuli Water Supply Project (Phase 2) – Safe & Reliable Water for Chittagong
To improve the access to safe water in Chittagong city ( now the ratio is only 47%), the project will construct water supply facilities to provide safe water access to 6.5 lakh people (25% of the population in Chittagong) in Karnaphuli water supply area. After the completion of the project, 90% of the people in the area will enjoy an access to safe and reliable water. The project will also encourage the water sector reform through enhancing the capacity of CWASA by extending support to make it a financially sustainable body, along with JICA’s technical cooperation for CWASA to reduce financial and physical loss by improving the quality of management.
The Loan up to 34,947 mil JPY (375 mil USD) will be appropriated for construction of water supply facilities and consulting services. The executing agency is Chittagong Water Supply and Sewerage Authority (CWASA), which has been implementing the phase 1 project since 2007.
3. Northern Bangladesh Integrated Development Project
– “Government-Citizen Link” x “Rural-Urban Link” = Sustainable Development
The project, focusing on the livelihood of 33 million people in the most deprived Northern area, will promote road and other infrastructure development to enhance rural-urban linkage to invigorate the regional economy. The uniqueness of this project is that it applies the well-known “Link Model” to the urban area, which has been developed under the JICA technical cooperation in rural areas to reinforce the government-citizen link through bottom-up approach, for strengthening Pourshava governments’ administrative capacity.
The Loan up to 20,556 mil JPY (221 mil USD) will be appropriated for the construction of rural and urban infrastructure such as roads and market places, as well as for consulting services such as trainings to the stakeholders of Pourashava governance development. The executing agency is Local Government Engineering Department (LGED), Local Government Division, Ministry of Local Government, Rural Development and Cooperatives.
4. Renewable Energy Development Project – Light for Bright Future to Rural People
Nearly 65% of the people living in rural areas of Bangladesh are still living without electricity. The project will provide assistance to install photovoltaic, biomass and other renewable energy equipment, diversifying the types of power supply and increasing the power supply in the remote rural area where electricity grid has not reached. It will increase electrification ratio (now 50%) by 2-3% with shedding light on 3-4 million people (6 lakh households) to increase power supply by 50MW. It will also decrease CO2 emission more than 40,000 ton/year.
The Loan up to 11,335 mil JPY (122 mil USD) will be appropriated to on-lending loans to Partner Organizations of Infrastructure Development Company Limited (IDCOL), the executing agency of the Project.
During the signing ceremony, H.E Mr. Shiro Sadoshima asked the Government of Bangladesh to take necessary measures so that these projects should be implemented smoothly and effectively and that the people of Bangladesh would get maximum benefits from these projects. He also expressed his grief over the loss of many lives due to the unwarranted and escalating violence, as well as concern about its negative impact on investment climate. He hoped that the spirit of democracy, which is characterized by peaceful dialogue and mutual understanding will prevail, and that investment friendly atmosphere be reestablished by the efforts of all concerned parties and the segments of the society.