Bangladesh will receive a $1.1bn loan from Japan after the two countries signed an agreement for the construction of Dhaka’s first underground metro rail project, Mass Rapid Transit Line-1.

This financial aid is part of a $2.66bn loan that will also support the development of the Matarbari power plant and speed up the recovery from the Covid-19 pandemic.

Under the 42nd Official Development Assistance (ODA) package, Japan International Cooperation Agency (JICA) will deliver financing in its second tranche of loans for the metro rail project.

The loan maturity period is 30 years, with a grace period of ten years.

Japan had earlier offered nearly $500m for the MRT Line-1 that will extend nearly 31.2km, with two routes.

The first 19.8km route will run from Hazrat Shahjalal International Airport to Kamalapur Railway Station.

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This airport route is said to be the country’s first underground rail line and will feature 12 stations.

The second route will link Notun Bazar and Pitalganj, covering a distance of 11.3km.

This Purbachal route will be elevated and include nine stations.

Meanwhile, the Notun Bazar station will be linked to the MRT Line-5 northern route, which operates from Hemayetpur to Vatara.

Comprehensive study, survey and basic design have been finished for both the routes.

A detailed design work for the project is currently in progress.

The total cost of the project has been estimated at $6bn (BDT525bn).

Work on the project commenced in September 2019 and is projected to be finished by December 2026.

Bangladesh has received over $27bn in financial aid from Japan.

In October 2019, the Executive Committee of the National Economic Council (ECNEC) of Bangladesh sanctioned two large mass rapid transit projects worth $10.8bn (BDT940bn).