BD and Japan Inks ODA Loan Deal

The World Bank (WB) is set to provide a $280 million loan to enhance Chattogram’s water supply and sewerage systems. The funding will support the Chattogram Water Supply Improvement Project, worth Tk 37.45 billion, focusing on replacing 300 km of outdated pipelines, installing 87,000 smart meters, and improving surface water use. These upgrades aim to modernize CWASA's operations, boost efficiency, and increase revenue.

Bangladesh's foreign debt servicing soared nearly 31% year-on-year in the first four months of FY 2024-25, with $1.44 billion paid in principal and interest between July and October, up from $1.10 billion in the same period last year. Principal repayments rose 41% to $896 million, while interest payments increased 16% to $542 million, driven by an expanded foreign loan portfolio and higher global interest rates.

Bangladesh and Japan have formalized the first instalment of the 45th Official Development Assistance (ODA) Yen Loan Package, amounting to 39.902 billion yen (approximately USD 257 million), through an agreement signed on 25 November 2024.

Bangladesh's private-sector short-term external debt stock has dropped to $10.73 billion by November 2024, a significant fall from $13.95 billion in May 2023, according to Bangladesh Bank. Entrepreneurs are deferring business expansion plans due to persistent energy crises, depreciation of the taka, and uncertainties stemming from mass unrest that culminated in the change of government on August 5, 2024.

On November 25, 2024, Bangladesh and Japan signed agreements for a Japanese ODA loan of 39,902 million Japanese Yen ($248.88 million) to support two major projects: the Jamuna Railway Bridge Construction and the Chattogram Sewerage System Development. The agreements, under the 45th ODA loan package (1st batch), were signed by representatives from the Economic Relations Division (ERD), Japan's Embassy, and JICA.