Japan will provide $ 324 million in loan assistance for New Haripur Power Plant and two other projects in the country. An agreement to this effect was signed between the governments of Japan and Bangladesh in the capital yesterday.

Japanese Ambassador to Bangladesh Masayuki Inoue and Secretary, Economic Relations Division, M Aminul Islam Bhuiyan signed the exchange of notes on behalf of their respective governments.

Following the signing of the notes, Chief Representative of Japan Bank for International Cooperation (JBIC) in Dhaka Yasuo Fujita and ERD Additional Secretary M Mejbahuddin signed the loan agreements.

The government of Japan will provide the loan to the Bangladesh government through JBIC for implementation of the three projects.

Of the total, $ 160 million will be provided for implementing the New Haripur Power Plant (360 MW) Development Project (Part I), $ 116 million for Dhaka-Chittagong Railway Development Project and $ 48 million for Small Scale Water Resources Development Project.

The interest rate is 0.01 percent per annum and the repayment period is 40 years inclusive of 10-year grace period for the three loans.

“The new loan package reflects Japan’s strong intention to support Bangladesh to alleviate the recent serious power shortages by newly constructing a 360MW power plant near Dhaka,” says a release from the Japanese embassy.

In addition, some useful technical assistance will be introduced under the projects, such as capacity building for the new power plant operation and management reform of the Bangladesh Railways, which the Bangladesh government is implementing now under policy and institutional reforms.