TDS Desk:

Bangladesh has signed a loan agreement worth approximately $630 million with Japan to finance Bangladesh Railway’s ‘Construction of Dual Gauge Double Line Between Joydebpur-Ishurdi Section Project (I)’.

The agreement was formalised on Friday (June 27) at the Economic Relations Division’s NEC-2 conference room in the capital’s Sher-e-Bangla Nagar.

Economic Relations Division Secretary Md Shahriar Kader Siddiky signed the agreement on behalf of the Government of Bangladesh, while Ichiguchi Tomohide, chief representative of the Japan International Cooperation Agency (JICA) Office in Bangladesh, represented the Government of Japan, reads a press release.

This loan is part of the second batch under Japan’s 46th Official Development Assistance (ODA) loan package. The agreement follows the earlier “Exchange of Notes” signed in Tokyo on 30 May 2025, during Chief Adviser Muhammad Yunus’ visit to Japan.

The railway project aims to boost Bangladesh’s connectivity and trade capacity by doubling the existing Joydebpur-Ishurdi section with a 162km dual gauge main line. The initiative also includes construction of 25km of loop and siding lines, reconstruction of 11km of existing track, and the building of three new stations, along with other supporting infrastructure.

Japan will finance the project in phases. Notably, Japan had already committed $32 million earlier for the project’s engineering services.

For this tranche, the loan carries an interest rate of 2% for construction work, 0.65% for consultancy services, and a 0.20% one-time front-end fee.

The repayment period is 30 years, including a 10-year grace period.

Japan remains Bangladesh’s largest bilateral development partner, having committed over $33.6 billion in loans and grants since independence. Its assistance has spanned vital sectors such as communication, power, agriculture, health, education, water supply, and rural development.