Bangladesh signs $630m loan deal with Japan for Joydebpur-Ishwardi rail project
Jica will finance the project in phases
Bangladesh has signed a $630 million loan agreement with Japan to finance the construction of a dual-gauge double railway line between Joydebpur and Ishwardi, aimed at enhancing trade and connectivity.
The agreement was formalised today (27 June) at the Economic Relations Division's NEC-2 conference room in Sher-e-Bangla Nagar, Dhaka. Md Shahriar Kader Siddiky, secretary of the Economic Relations Division, signed on behalf of Bangladesh, while Ichiguchi Tomohide, chief representative of the Japan International Cooperation Agency (Jica) in Bangladesh, represented Japan.
According to a press release, this funding is part of the second instalment under Japan's 46th Official Development Assistance (ODA) loan package. It follows the signing of an "Exchange of Notes" in Tokyo on 30 May 2025, during Chief Adviser Muhammad Yunus's official visit.
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The Joydebpur-Ishwardi railway project includes a 162km dual-gauge main line, 25km loop and siding lines, and the reconstruction of 11km of existing track. It will also involve the construction of three new stations and associated infrastructure to improve efficiency and reduce travel time.
Japan will finance the project in phases. Previously, it committed $32 million for the project's engineering services, said the release.
For this tranche, the loan comes with 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 1971. Its assistance spans key sectors including transport, power, agriculture, health, education, water supply, and rural development.
