$200m ADB loan to improve rural roads

Asian Development Bank (ADB) has approved a loan of over $200 million to improve rural road networks that may benefit 51.5 million people in Bangladesh.

"Rural roads are critical to supporting the country's agriculture sector, which accounted for more than 15 percent of the country's gross domestic product in 2015," said Lee Ming Tai, ADB senior rural development specialist, yesterday.

The sector also employs—directly or indirectly—about half of the workforce, said Tai in a statement. 

ADB's Rural Connectivity Improvement Project will support the government's current Seventh Five Year Plan, which focuses on boosting rural incomes as well as agriculture's contribution to economic development, reads the statement.

The Manila-based multilateral lender also said about 80 percent of the country's population lives in rural areas and depends on agriculture for its livelihood.

But the sector is held back by several major constraints, including insufficient rural transport, inadequate market infrastructure, and more intense floods and cyclones related to climate change, it said. According to the ADB, only about 40 percent of the rural population has access to all-weather roads, and these roads make up only 28 percent of the total length of rural roads in the country.

The aim is to increase the percentage of rural roads classified as good from 43 percent in 2016 to 80 percent in 2020.

The ADB project will support this by improving about 1,700 kilometres of rural roads to all-weather standards in 34 districts.

Selection of roads takes into consideration factors such as population size, agricultural potential, the number of farms and commercial establishments, and economic potential.

A particular priority is those roads damaged by flashfloods in 2017. The roads will be designed with safety features, including signage, guard posts, and speed breakers.

The roads will be covered under contractual maintenance for five years after the date of construction on a pilot basis.

The total cost of the project, which is due for completion in November 2023, is $285.31 million.

The ADB will provide a concessional loan of $100 million and a regular loan of $100 million. The government will provide the remaining $85.31 million.