$125 million loan agreement with ADB signed

Bangladesh has signed a $125 million loan agreement with the Asian Development Bank (ADB) to “improve services and governance” in municipalities.

The Manila-based lender says the ‘Third Urban Governance and Infrastructure Improvement Sector Project’ has been built upon the successes and lessons learnt from previous projects that focused on improvements in infrastructure, governance, and services.

The new project will provide assistance to 30 municipalities, including 20 district headquarters, with a total population of 2.2 million.

Economic Relations Division Secretary Mohammad Mejbahuddin and ADB Country Director Kazuhiko Higuchi signed the agreement on Wednesday at the ERD in Dhaka.

The loan will have a 25-year repayment term, including a grace period of five years and an annual interest rate determined in accordance with ADB’s London interbank linked lending facility.

The $236 million project is expected to be completed in 2020.

Apart from ADB, OPEC Fund for International Development will provide co-financing of $40 million alongside government and municipality’s counterpart support of $71 million.

The project will help build roads, drainage and sanitation systems, piped water supplies, and solid waste collection and disposal.

It will also strengthen the ability of municipalities to carry out urban planning, financial management, and service delivery.

The Local Government Engineering Department and Department of Public Health Engineering under the Local Government Division will be responsible for implementation of the project.

Participating municipalities will prepare their development plans and implement subprojects in consultation with a broad-based citizen forum known as town level coordination committee, ADB says.