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JICA signs loan agreement for Mirsharai Steel Plant Development Project in Bangladesh co-financing with India Exim Bank
First co-financing project with India Exim Bank to support the construction of an environmentally friendly steel plant in Bangladesh.
National – Kolkata, October 18, 2023: Japan International Cooperation Agency (JICA) signed a loan agreement with BSRM Steels Limited (BSRMSL) of the People’s Republic of Bangladesh for private sector investment finance of USD 50 million to fund the construction of an environmentally friendly steel plant, planned by BSRMSL in Mirsharai, Chattogram District. The project will be co-financed by the Export-Import Bank of India and Standard Chartered Bank, among other institutions.
In recent years, Bangladesh has been developing large-scale infrastructure such as metros, airports, and harbors with the help of Japan’s Official Development Assistance (ODA) loans and other sources of assistance. In addition, the construction of housing, commercial facilities, and hotels has become more active as average incomes have risen in the commercial sector. Steel products like rebar are essential materials for the construction of such infrastructure, and going forward, the demand for steel in Bangladesh is expected to grow at an annual rate of 15-20%. On the other hand, Bangladesh relies on imports for some steel products, and there are concerns that the increase in imports associated with the above growth will have a negative impact on the country’s trade balance. In addition, emissions of environmental pollutants and greenhouse gases from steel plants are a major challenge.
This loan will support the construction of a new, environmentally friendly steel plant by BSRMSL in Mirsharai, Chattogram District, thereby increasing the steelmaking capacity in Bangladesh. The loan will promote environmental friendliness and reduce greenhouse gas emissions in the steel industry in Bangladesh through the introduction of solar power generation facilities, air pollutant management systems, and water treatment and reuse plants as ancillary facilities to the plant. In doing so, it will also contribute to the achievement of SDGs (Sustainable Development Goals) Goals 8 (Decent work and economic growth), 9 (Industry, innovation, and infrastructure) and 17 (Partnerships for the goals), among others.
Mr. SAITO Mitsunori, Chief Representative of JICA India, expressed his appreciation for this development, stating, “The Mirsharai Steel Plant Development Project is promoting environmentally friendly steel plant in Bangladesh. I am also glad to announce this is the first co-financing project with India Exim Bank. We look forward to exploring additional joint projects with India Exim Bank in third countries.”
This year marks the 50th anniversary of JICA’s ODA to Bangladesh and based on the trust that has been built between JICA and Bangladesh, JICA will work to further strengthen relations between the two countries through this project. Moreover, JICA will continue to cooperate in the economic and social development of Bangladesh through various approaches such as technical cooperation, human resource development, and financial support.
