The World Bank (WB) will provide $525 million in credit support to help Bangladesh improve and maintain rural bridges and road network as climate-resilient structures for better rural connectivity.
Economic Relations Division (ERD) signed two loan deals with the global lender in the capital on Thursday to implement two rural connectivity projects.Of the total amount, $425 million was committed for Operation for Supporting Rural Bridges Program (SupRB) with $100 million is additional financing to Second Rural Transport Improvement Project (RTIP-II).
SupRB is a new project that will be implemented to improve connectivity and climate resilience in 19 coastal districts.
It will also support existing efforts by the government to plan, design and manage rural bridges through the rehabilitation of some 29,000 metres bridges and build another 20,000 metres new bridges in 61 districts.
Another $100 million additional financing for RTIP-II project of LGED will help support the rehabilitation of 1,433km of upazila and union roads that were damaged from the flash floods and heavy downpour last year and the maintenance of almost 6,000km rural roads in 26 districts.
The loan documents were signed by World Bank Country Director Qimiao Fan and ERD Additional Secretary Mahmuda Begum on behalf their respective sides.
“Rural bridges play a key role in Bangladesh’s development, and an efficient rural road network can have a big effect in improving rural livelihoods,” said Qimiao Fan.“By enabling greater connectivity, these two projects will help rural communities gain safer access to schools, health facilities and markets, reduce transport costs, increase non-agriculture incomes, and expand employment for both women and men,” he added.
The proposed operation for SupRB is designed as a ‘hybrid’ one. It comprises two financing instruments: Program-for-Results (PforR) and Investment Project Financing (IPF), WB officials informed.
The PforR portion of the operation will support capital investments in upazila and union bridges, including maintenance, rehabilitation, widening, replacement, and new construction.
The IPF portion will support institutional strengthening and capacity building activities under the operation.
As a country vulnerable to climate change impacts, Bangladesh will put special emphasis on ensuring the quality of work for rural bridges and roads although the quality was not the main concern earlier, Mamuda Begum told reporters.
The loans will be received under IDA Gap Country terms and conditions which include 0.75 per cent service charge and 1.25 per cent interest charge on disbursed amount.
Repayment period of the loans is 30 years including a five-year grace period.
The commitment fee is 0.50 per cent on the unreleased amount but the WB has kept the commitment fee suspended for several years, Mahmuda informed.
SupRB will be implemented by 31 December 2023 and RTIP-II by 30 June 2021.