Dhaka, Bangladesh (BBN)- The central bank of Bangladesh is going to launch a pilot project worth BDT 1.0 billion with the financial support of the Japan International Cooperation Agency (JICA) for improving working environs in the readymade garment (RMG) industry.
“The financing initiative is expected to commence soon on a pilot scale, with the JICA fund of Tk 1.0 billion,” Bangladesh Bank (BB) Governor Atiur Rahman said while speaking at a meeting on expression of intention regarding safe working environment in RMG sector held in the central bank on Thursday.
He also said cost of relocation of factories from unsafe rented premises, and cost of procurement of safety equipment will also be eligible for financing support under this initiative.
The BB has taken the latest initiative against the backdrop of Rana Plaza collapse in Savar on April 24 last, where 1,127 people were killed and hundreds were severely injured.
“To ease stresses from cost burdens of retrofitting or rebuilding the factory buildings, banks participating in this initiative will lend to the factories for this purpose at interest rate not exceeding 10 per cent per annum, against which banks will draw refinance from the BB out of the JICA fund at a concessional interest rate of 5.0 per cent, leaving for them adequate interest income margin of up to 5.0 per cent,” the BB chief said.
He also said the financing will be long term up to 15 years including a two-year grace period.  
At the meeting, Japanese Ambassador to Bangladesh Shiro Sadoshima and JICA Chief Representative Takao Toda in their speeches underscored the need for taking immediate actions to address the RMG sector issues to rebuild the image of the sector and the country as well.
Secretary of the Ministry of Housing and Public Works Khondaker Showkat Hossain said the existing Bangladesh National Building Code (BNBC) and the Building Construction Act must be followed to avoid any unwanted incidents.
Among others, Deputy Governor of the BB Abul Quasem, Vice President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Shahidullah Azim and Director of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mostafa Jamal Pasha also spoke on the occasion.
“We’ll introduce the pilot project after signing a memorandum of understanding (MoU) among the JICA, the BB, the Public Works Department (PWD) under the Ministry of Housing and Public Works, the BGMEA and the BKMEA,” a BB senior official told BBN.
The central banker also said the Department for International Development (DFID) has already communicated with the BB to participate in the proposed project.
BBN/SSR/AD-12July13-4:05 pm (BST)