AIIB to lend $200m for improving water supply, sanitation

Staff Correspondent

24 February, 2021 12:00 AM printer

Bangladesh is going to borrow $200 million from Asian Infrastructure Investment Bank (AIIB) for expanding water supply, sanitation and hygiene (WASH) facilities in rural areas.

The funds are meant for the project “Bangladesh Rural Water, Sanitation and Hygiene for Human Capital Development Project” designed to increase WASH services of the government. 

Approximately 1,20,000 households will get safe water supply and 10,00,000 households will get hygienic sanitation facilities under the project.          

The project will be implemented by the Department of Public Health Engineering (DPHE) under the Local Government Division and Palli Karma-Sahayak Foundation (PKSF).

An agreement on the credit was signed between the China-led AIIB and the Economic Relations Division (ERD) of the Bangladesh government on Thursday, said an ERD press release. 

ERD Secretary Fatima Yasmin and AIIB’s Vice-President (Investment Operations, Region-1), DJ Pandian signed the agreement on behalf of their respective sides. The loan is repayable in 35 years with a grace period of 05 years. The interest rate is 1.40 percent per annum on the withdrawn credit balance and payable front end fee is 0.25 percent and commitment fee is 0.25 percent on un-withdrawal balance.

 Besides AIIB, the World Bank is also proving $200 million loans to the scheme.

 The project was approved by the Executive Committee of the National Economic Council (ECNEC) on December 22, 2020.

The project implementation period is 05 years from January 2021 to December 2025. The project will be implemented in 98 upazilas of 30 districts covering all divisions.

The project eyes to implement safe water supply schemes in selected villages in arsenic and iron deficient areas of Bangladesh and increases the provision and use of WASH services in schools and community clinics.

It will also finance the construction of hand washing stations in schools and public places due to outbreaks of infectious diseases like COVID-19.

 In addition, it will strengthen the institutional capacity of concerned organisations of Local Government Division aiming to create competitive jobs and expansion of WASH services.

It has been designed to meet the “safely-managed” services in line with Sustainable Development Goals 6.1 and 6.2.