Bangladesh has signed a JPY133.26bn (US$1.09bn) loan agreement with Japan for investment in infrastructure, sustainability and regeneration in urban areas. 

The loan, signed in Dhaka with the Japan International Cooperation Agency (JICA), will be used for six projects that will address a number of issues to help Bangladesh towards further economic growth, the agency said. 

With a population of around 160m, Bangladesh has maintained an annual economic growth averaging 6% over the past ten years largely through the development of its ready-made garment industy, and has drawn attention from foreign countries including Japan as a production base or investment location. 

However, its infrastructure - especially a stable power supply and road networks - has not kept pace with its rapid economic growth, and are now among the priorities for encouraging further economic growth. Other challenges include economic disparities between urban and rural areas, and the increasing damage caused  in urban areas by disasters such as earthquakes. Indeed, structural damage was identified at three garment factories in Bangladesh in May this year following apowerful earthquake that shook neighbouring Nepal. 

Earthquake damage at Bangladesh garment factories

The six projects will include: 

  • Industrial diversification and economic growth by improving the investment climate in Bangladesh. Foreign direct investment will be encouraged through various programmes to develop large-scale infrastructure including economic zones (EZs), as well as ease cumbersome bureaucratic procedures, policies and practices. 
  • A stable supply of power to the Dhaka Metropolitan Area. Investment will help strengthen and diversify power production and capacity, including strengthening the Dhaka-Chittagong main power grid and tranmitting this power to Dhaka.
  • Bridge replacement and construction in western Bangladesh. Aimed at making the regional transportation network safer and more efficient, around 60 bridges will be built, mainly in western Bangladesh,to help promote socio-economic development in the area. 
  • Improving the health service. Moving towards universal health coverage is seen as a priority.
  • Strengthening safety in public and private urban buildings. A Fire Service and Civil Defense headquarters will be constructed, and fire stations improved to save lives during earthquakes and other disasters. Financing will also be made available to strengthen the safety of private buildings.
  • Improving public services – especially in rural areas where the poverty rate is high.