Japan to provide $1.4bn loan for subway in Dhaka

The Japanese government is providing a loan of Tk11,400 crore ($ 1.4 billion) to Bangladesh for the construction of a subway in Dhaka.

The two sides signed the loan agreement on Tuesday.

Fatima Yasmin, secretary, Economic Relations Division (ERD), and Ito Naoki, ambassador of Japan, signed the agreement on behalf of their respective sides.

The total cost of the Metrorail Line-5 project is Tk41,238 crore. Under the project, a 13.50-km underground metro rail and a 6.50-km fly metro rail will be constructed. The new metro rail, 14 km, will be the subway of the 20-km line from Gabtali to Bhatara.

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The remaining 6km will be elevated. As a result, there will be a metro rail with a combination of subway and fly systems on the same route.

The proposed MRT Route-5 (Northern Route) will have 14 stations.

Nine of these stations will be underground. The remaining five stations will be overground.

The objective of the project is to alleviate traffic congestion and mitigate air pollution in Dhaka city by constructing a 20-km mass rapid transit system, MRT Line-5.

The rate of interest on this loan will be 0.7% for construction, 0.0114% for consultancy services, frontend fee (at a time) 0.294%, and the repayment period will be 30 years which includes a 10-year grace period.