Japan is set to provide Bangladesh with $581 million in loans to support power generation and food safety initiatives, officials said Monday.

The Economic Relations Division (ERD) of the Ministry of Finance and Japan are expected to sign two loan agreements on March 25 under the 45th Overseas Development Assistance (ODA) package.

The Japan International Cooperation Agency (JICA) will allocate $386.72 million—the final tranche—for the Matarbari Ultra Super Critical Coal-fired Power Project, which is already supplying 1,200 megawatts (MW) to the national grid. This follows a $1.5 billion financial commitment under the 44th ODA package and multiple previous loan disbursements.

An additional $194.30 million will be dedicated to enhancing the Bangladesh Food Safety Authority’s (BFSA) capacity to improve food quality nationwide.

In February, the Executive Committee of the National Economic Council (ECNEC) approved a Tk 24.09 billion ‘Food Safety Testing Capacity Development Project’, which will be implemented by December 2034.

Japan has been a key partner in Bangladesh’s infrastructure development, including the Matarbari project. It has already provided 437,754 million Japanese yen across six tranches; the seventh tranche was confirmed in September 2023.

Under the first phase of the 45th ODA package, Japan previously provided $257 million in November 2023 for Chittagong WASA and the Jamuna Rail Bridge Construction Project. The loans carry an interest rate of 1.70% for construction, 0.40% for consultancy, and a one-time front-end fee of 0.2%.