The finance ministry and Japan signed an official development assistance (ODA) loan agreement of 3,300 million Yen at the Tashichhodzong in Thimphu yesterday.
The “Covid-19 crisis response emergency support loan” agreement was signed by the finance minister Namgay Tshering and the Japan International Cooperation Agency’s (JICA) Chief Representative, Kozo Watanabe.
It is the first programme loan from the Government of Japan through JICA to Bhutan.
The ODA loan is to mitigate the adverse impacts of Covid-19 in Bhutan.
The loan repayment period is 15 years with a grace period of four years. An annual interest rate is 0.01 percent.
Lyonpo Namgay Tshering said the government could use the loan based on priority so that it would provide economic opportunities for the people. “This loan will go a long way in addressing the fiscal deficit.”
Minister said the government is observing the budget with the highest level of prudence.
Lyonpo said Japan has been one of the important development partners for Bhutan since the 1960s.
Lyonpo said Japan has made a significant contribution to the agriculture, health and education sectors. “The project tied loan given by Japan in 2015 for rural electrification has made a dynamic shift in the rural livelihoods. It has electrified 22,000 households.”
As part of the economic contingency financing, Lyonpo said the government has injected Nu 4 billion for agriculture, tourism and skilling and reskilling programmes. “In the last two years, the government has also focused on water, road and ICT development.”
Lyonpo said agriculture’s contribution to GDP in the last two years has increased from 15 to 18.5 percent.
Kozo Watanabe said it was the second Yen loan after the Rural Electrification Project in 2007 and 2011.
Kozo Watanabe said: “In Bhutan, under the guidance of His Majesty the King, many relief efforts were undertaken for the affected and vulnerable individuals that have helped to ease their economic difficulties . I admire the government’s efforts and the strong leadership to protect the people against Covid-19.”
In the past few years, in collaboration with ministries and other development partners, JICA has assisted the government’s efforts against Covid-19 and vulnerable groups of people in various fields, such as strengthening health systems, increasing food self-sufficiency, and protection from gender-based violence.
Kozo Watanabe said JICA is currently preparing the project for the construction of the Royal Centre for Infectious Diseases in Gidakom to help build resilient health systems for infectious diseases.
This year, Japan celebrates Japan-Southwest Asia Exchange Year to take Japan’s relations with the countries of Southwest Asia to new heights. In addition, JICA celebrates the 35th Anniversary of the conclusion of the JOCV (Japan Overseas Cooperation Volunteers) Agreement.
Ambassador of Bhutan to Japan, V. Namgyel and Chargé d’Affaires, a.i. of the Embassy of Japan in New Delhi, Kawazu Kunihiko, signed the exchange of notes for the Covid-19 crisis emergency support loan on May 20.