DHAKA: Bangladesh will receive USD 120 million in loans from the Asian Development Bank to overhaul urban planning and infrastructure, ADB said.
“The board of directors of the bank approved the loan for the development of two major cities of Bangladesh,” ADB said in a statement. The target among others is energy efficiency in the sprawling city regions of Dhaka and Khulna.
Both cities have surrounding secondary towns.
“The goal is to increase the growth potential and environmental sustainability of these two city regions,” said Masayuki Tachiiri, urban economist in ADB’s South Asia Department
Bangladesh’s cities have been growing at breakneck pace with the urban population expected to double to 74 million by 2035.
A metropolitan development plan for Dhaka, covering the period 1995 to 2015, has been slow to roll out and is fast becoming outdated, undermining the city’s potential for growth.
Based on a study to simulate climate change impacts, the project will also support measures to strengthen climate change resilience, notably the improvement of drainage in Khulna.
The loan from ADB’s ordinary capital resources covers about 71% of the total project cost of USD 170 million.
It has a 32-year tenor, with an 8-year grace period carrying an annual interest charge of 1%, which rises to 1.5% for the balance of the term.
The government of Bangladesh will provide counterpart support of USD 50 million.
The project is due for completion in December 2016.