The government of Japan has approved USD 30 million as a Covid-19 crisis emergency support loan to Bhutan.
The government of Japan will extend the Official Development Assistance (ODA) loan of Japanese Yen 3.3B (Nu 2.33 billion at the existing exchange rate yesterday).
The loan, which is provided at a concessional rate and favourable terms of repayment, will help in Bhutan’s economic recovery efforts after the pandemic.
Finance Minister Namgay Tshering said that the interest rate is 0.01 percent for the tenure of 15 years with a grace period of four years.
Lyonpo said that the government has looked into the favourable terms and conditions while borrowing. “Government is prudential in terms of any borrowing,” Lyonpo said.
Lyonpo said that the borrowings will build up convertible currency reserves and for economic recovery, the country needs a good reserve.
He also said that the borrowings will be pumped in as viable investments which will have good returns.
“For economic recovery, any country would require additional financing,” Lyonpo said.
Lyonpo said that if we worry about the debt situation, our economy will never recover.
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 Covid-19 crisis emergency support loan yesterday.
According to the press release from the Ministry of Foreign Affairs, during the signing ceremony, Ambassador V. Namgyel said that under the leadership of His Majesty The King, Bhutan’s management of the pandemic has been exemplary.
“Now the priority of the Royal Government is to strengthen the economy which has suffered very seriously from the effect of the pandemic,” the Ambassador said.
He said that Japan’s ODA loan will be of immense help to Bhutan’s economic recovery efforts.
Kawazu Kunihiko expressed the hope that the Covid-19 crisis emergency support loan from Japan will have a synergic effect on Bhutan’s development along with other forms of development and technical cooperation between Japan and Bhutan.
Ambassador V Namgyel conveyed the deep appreciation of the government and people of Bhutan to the government and the people of Japan for their steadfast and generous support to Bhutan’s socio-economic development for many years, including during the pandemic and for Japan’s assurances of continued support to Bhutan in the years ahead.