The World Bank has approved a loan of $100 million to increase access to improved water supply and sanitation system in 30 municipalities in Bangladesh as well as to help build their capacity for delivering water and sanitation services.

The Municipal Water Supply and Sanitation Project will help about 600,000 people living in small towns get safe water through piped water supply systems, said a WB press release on Thursday.

In the selected 30 municipalities that currently do not have piped water systems, the project will install water infrastructures, including water treatment facility, water storage, transmission and distribution pipe network, and house connections. 

The statement said about 87 percent households have access to various improved water sources in the country. “But only 10 percent people have access to piped water supply. About half of the municipalities have basic piped water systems, but they cover only a small share of population in town centres.”

With Bangladesh’s rapid urbanisation, both small towns and big cities need to improve their infrastructures, including water and sanitation systems, to cater to the growing population, said Mercy Tembon, WB country director for Bangladesh and Bhutan.

She said this project would contribute to the government’s goal of expanding piped water coverage in municipal areas.

It would also help the participating municipalities improve sanitation and drainage systems, Tembon said. “This will include investments in septage management, public toilets, septage disposal, and critical drainage infrastructure. The project will also provide equipment and training to cleaning workers for fecal sludge management.”

The credit from the World Bank’s International Development Association (IDA), which provides concessional financing, has a 30-year term, including a five-year grace period, and an interest rate of 1.25 percent with a service charge of 0.75 percent.

The project also includes $100 million financing from the Asian Infrastructure Investment Bank (AIIB) and $9.53 million financing from the Bangladesh government.