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ADB approves $490m loan for infrastructure dev

  • Staff Correspondent
  • 16 August, 2023 12:00 AM
  • Print news
ADB approves $490m loan for infrastructure dev

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The Asian Development Bank will provide $490 million in loans against two projects in Bangladesh for improving rural connectivity and urban governance.

In this regard, separate loan agreements have been signed between the Bangladesh government and the Manila-based moneylender.

Of the total credit amount, $300 million has been committed to the Improving Urban Governance and Infrastructure project and an additional $190 million to the Rural Connectivity Improvement Project.

Economic Relations Division (ERD) Secretary Sharifa Khan and ADB Country Director Edimon Ginting signed the agreement at an event at ERD on Monday, according to a press release.

The Improving Urban Governance and Infrastructure project will help achieve integrated and sustainable urban development to improve the livability of 88 municipalities, benefiting 7.6 million citizens in Bangladesh.

It will strengthen urban governance and provide capital investment for improved delivery of municipal services based on the Municipal Development Plan of Bangladesh.

On the other hand, the rural connectivity project is making agricultural areas more productive and improving socioeconomic centres in rural Bangladesh.

The ongoing project, approved in November 2018, has upgraded about 1,700 kilometres of rural roads, strengthened the capacity of rural infrastructure agencies, and improved rural road master planning.

More than 900 kilometres of rural roads have been added to the original target since 2020.

This additional financing will further extend the improvement of another 1,350 km of rural roads with climate resilience designs and improved safety features.

The project will also strengthen the capability of the Local Government Engineering Department to adopt nature-based bioengineering solutions for climate change adaptation. Under the urban governance scheme, at least 900 kilometers (km) of storm water drainage will be upgraded, 1,500 km of roads will be rehabilitated, and public facilities will be refurbished or developed, considering the needs of women and the vulnerable population.

The programme supports urban resilience by scaling the preparation and implementation of risk-informed master planning and investments, with climate financing amounting to 60 percent of the loan amount.

It will receive a $200 million co-financing from the Agence Française de Developpement, while the government has committed to contributing about $189 million to the project.

In addition, ADB will provide technical assistance grants of $1 million from its Technical Assistance Special Fund and $1 million from the Japan Fund for Prosperous and Resilient Asia and the Pacific to support programme implementation, specifically the performance monitoring and evaluation and institutionalization of the criteria-based fund transfers to municipalities.