The Japan government has finalised the modalities of its pledged US$400 million loan for building Bangladesh’s largest rail-cum-road bridge over the mighty Padma, officials said.
Finance ministry officials said Japan would charge 0.01 per cent interest for its proposed loan providing 40 years’ repayment facilities with 10 years’ grace period.
The Japanese ambassador in Dhaka in a letter last week stated the conditions and modalities of their $400 million credit, a senior economic relations division (ERD) official told the FE.
Following repeated requests by Dhaka, Tokyo has agreed to raise its investment amount to $400 million for the Padma Bridge from its earlier assurance of $300 million.
The ERD official said: “Now we are hopeful of signing the loan agreement with Japan in early February next year. In the meantime, we will complete the process for signing the agreement.”
Prime Minister Sheikh Hasina during a visit to Tokyo from November 28 to December 2 requested her counterpart to extend financial support for building the Padma Bridge.
In October, a Japanese mission visited Dhaka to discuss the modalities for the proposed loan for building the $2.90 billion Padma Bridge.
ERD officials said the Japanese donor agency–Japan International Cooperation Agency (JICA)– in early September in Dhaka assured the government of bankrolling the 6.15-kilometre Padma Bridge.
JICA formally offered $300 million loan for building Padma Bridge in talks with Bangladesh government agencies in Dhaka.
The ERD official said Japanese loan would be softer than other loans offered by three multilateral donor agencies–World Bank, Asian Development Bank and Islamic Development Bank (IDB).
The World Bank gave assurance of $1.50 billion credit charging 0.75 per cent interest, ADB $615 million with more than 2.0 per cent interest and the IDB $140 million charging more than 3.0 per cent interest for constructing the largest bridge over the river Padma.
Bangladesh government in 2008 had undertaken the project for road-cum-railway bridge over the river Padma at Mawa-Janjira point at a cost of US$1.46 billion which recently increased to $2.9 billion.
JICA in 2005 conducted a feasibility study on the proposed Padma Bridge project and handed over its report to the government. Later the government in 2008 appointed a New Zealand-based consulting firm for conducing feasibility study again.
Bangladesh has already invited bids from international firms to construct the 6.15km Padma multipurpose bridge.
A joint donor-government survey showed that Padma Bridge would boost the country’s gross domestic product by 1.2 per cent, revive the fortune of Mongla Port and cut poverty in the poorest south-west region.
The present government has made commitment to complete the country’s largest bridge at the Mawa-Janjira point across the mighty river Padma by 2013.
