Dhaka, Tokyo likely to ink $2b loan deals

PM leaves for Japan tomorrow

Bangladesh and Japan are expected to sign memorandums of understanding (MoU) on around $2 billion in loans and financial support during Prime Minister Tarique Rahman’s official visit to Tokyo, officials in Dhaka and Tokyo said.

The proposed package is expected to include budgetary support, infrastructure development, and cooperation in energy and maritime security. The two countries are likely to sign five to eight instruments.

Around $300 million of the proposed amount is expected to be allocated for budgetary support, a diplomatic source said.

Tarique is scheduled to visit Japan from October 26 to 29, with a summit with Japanese Prime Minister Sanae Takaichi slated for October 27.

“During the upcoming visit, Japan is likely to push for regional connectivity, with a focus on the Moheshkhali-Matarbari Integrated Infrastructure Development Initiative (MIDI), under its vision of a Free and Open Indo-Pacific (FOIP),” the official said.

Tokyo is also expected to arrange 1 trillion yen, equivalent to around $6.36 billion, separately in private-sector investment in Bangladesh over the next five years, the official added.

Under Japan’s Official Security Assistance (OSA) programme, Tokyo is likely to provide a 35-foot vessel to the Bangladesh Coast Guard, the official said. 

Earlier this year, Japan handed over five patrol boats to the Bangladesh Navy under the programme, Bangladesh’s first OSA project, as part of efforts to strengthen security cooperation.

Japan’s largest power generation company, JERA, is also expected to help develop energy reserve infrastructure under MIDI.

“The plans are aimed at realising the FOIP and countering Chinese influence in Bangladesh,” the official said.

The visit is also expected to provide an opportunity for the two countries to elevate their relationship to a comprehensive strategic partnership (CSP) and expand cooperation in infrastructure, energy, regional connectivity and investment.

A diplomatic source said Japan had been a longstanding development partner of Bangladesh, providing official development assistance and supporting major infrastructure projects. 

“We are working on two to three titles for the elevation of the relationship [to CSP], which is yet to be decided,” the source said.

AREAS OF COOPERATION

State Minister for Foreign Affairs Shama Obaed Islam, speaking after an event at the CIRDAP auditorium yesterday, said Japan had remained one of Bangladesh’s major trade and development partners for many years.

She described the prime minister’s upcoming visit as highly significant and said a number of memorandums of understanding (MoUs) could be signed in areas including infrastructure, energy, technology, garments, education and health. 

She also expressed hope that the visit would help attract fresh Japanese investment.

According to sources in Dhaka and Tokyo, the instruments are likely to be MoUs and memorandums of cooperation (MoCs) covering loans and financial support, infrastructure development, agriculture, civil aviation, business climate development, development at the upazila level, OSA for the Bangladesh Coast Guard, and energy.

CONNECTIVITY PUSH

At the summit, Japan is expected to push for shared prosperity through its Bay of Bengal Industrial Growth Belt (BIG-B) initiative as it seeks to advance regional connectivity.

Japan launched BIG-B in 2014 to promote industrial development and connectivity around the Bay of Bengal, initially focusing on the Dhaka-Chattogram-Cox’s Bazar corridor. 

In 2023, it proposed a broader Bay of Bengal-Northeast India Industrial Value Chain Initiative to strengthen economic links between Bangladesh and northeastern India.

Built around three pillars of industry and trade, energy, and transportation, BIG-B aims to encourage Japanese investment, support industrialisation and improve connectivity by linking production centres with regional and global markets through infrastructure, including the Matarbari deep-sea port.

An official familiar with the developments, speaking on condition of anonymity, said Japan had renewed its vision for the region under the FOIP initiative. Tokyo recently elevated its relationship with ASEAN to a CSP and has actively upgraded bilateral ties with Southeast Asian countries, the official said.

“When the discussion comes to the topic of BIG-B, Japan does not consider India alone, but also other Southeast Asian nations. Connectivity through Matarbari is essential to Japan’s FOIP vision, and the deep-sea port is being developed not only for bilateral use but also to connect Bangladesh with regional and global supply chains. And on that matter, India is an important partner as Japan has investment and plans in India’s northeast,” the official said.

PM’S ITINERARY

According to sources in Dhaka and Tokyo, Tarique is scheduled to arrive in Japan on October 26. 

Upon arrival, he is expected to meet the president of the Japan-Bangladesh Parliamentary Friendship League (JBPFL) and the chairman of the Japan-Bangladesh Committee for Commercial and Economic Cooperation (JBCCEC) separately, and later call on the president of the Japan International Cooperation Agency (JICA). 

In the evening, he will attend a dinner hosted by the honorary chairman of the Nippon Foundation and the Sasakawa Peace Foundation.

On the second day, he will visit the Japanese prime minister’s office for the summit and a luncheon with Takaichi. 

He will then travel to Futtsu city in Chiba to visit JERA’s LNG terminal and power plant, before visiting a Nippon Express logistics hub in Ichikawa city and returning to his residence.

On the third day, Tarique will call on the governor of the Japan Bank for International Cooperation (JBIC). 

He will also visit the UNIQLO Ariake office and meet its president and board members, followed by a meeting with the president of the Japan External Trade Organization (JETRO). 

He is also scheduled to meet representatives of prominent Japanese companies, including Mitsui & Co, Sumitomo Corp, and JERA.

Tarique will attend the Bangladesh-Japan Economic Forum at JETRO, where MoUs on education and human resource development are expected to be signed.

On the final day, the prime minister will visit a Toyota factory before departing for Dhaka.