Japan provides Tk 3,800 crore loan to Bangladesh for energy sector

Japan is providing a loan of approximately Tk 3,800 crore to Bangladesh to enhance economic reforms and energy sector resilience. A loan agreement of 50 billion Japanese yen was signed between the Government of Bangladesh and the Japan International Cooperation Agency (JICA) to this end.

The loan agreement titled 'Emergency Support Loan for Enhancing Economic Resilience and Stable Energy Supply' was signed at an event in the capital on Tuesday, June 9. ERD Secretary Md Shahriar Kader Siddiky and JICA Bangladesh Office Chief Representative Takahashi Junko signed the agreement. A note exchange was also signed between the Japanese Ambassador to Bangladesh Saida Shinichi and the ERD Secretary on the same occasion.

The loan will be used to implement ongoing economic reform programmes and strengthen the power and energy sector. This is the first Official Development Assistance (ODA) loan under the Japanese government's 'Partnership on Wide Energy and Resources Resilience Asia (POWER ASIA)' initiative.

According to ERD sources, the programme has two main objectives: enhancing resilience in the power and energy sector and strengthening economic management and good governance. It will support the development of power transmission systems, diversification of energy sources, improvement of energy efficiency and sustainable operation of highly efficient power plants. Improved planning of power transmission systems and energy conservation activities will also be strengthened.

Additionally, support will be provided for implementing various reform programmes related to economic management and good governance, co-financed by the Asian Development Bank (ADB). The government hopes this assistance will help maintain macroeconomic stability, enhance energy sector capacity and further strengthen the overall economic framework, while also deepening Bangladesh-Japan development partnership for achieving sustainable and inclusive growth.