Bangladesh to get $200m ADB loan for urban infrastructure

The Asian Development Bank's (ADB) Board of Directors has approved a loan package of US $200 million to strengthen urban infrastructure, service delivery and governance in Bangladesh’s municipalities.

“The country’s pourashavas still need significant investment to not only improve service delivery and the urban environment but also to strengthen resilience to climate change,” ADB Urban Development Specialist Alexandra Vogl was quoted as saying according to a press release.

“This additional ADB financing for the well performing Third Urban Governance and Infrastructure (Sector) Project builds on the work of two previous ADB projects, expanding work in the pourashavas where we are already working and into five new ones,” the official added in the ADB release.

Bangladesh’s economy has been growing at a healthy pace, averaging 6.6 percent gross domestic product growth in 2014-2016, but the government faces the challenge of achieving sustainable and inclusive growth in the face of rapid urbanisation.

For example, in 2015, only 32% of the urban population had a piped water supply and 58% access to improved sanitation. Other challenges included fecal sludge management and underdeveloped or badly maintained drainage.

These issues are more acute in municipalities because of inadequate governance, lack of community participation, and capacity constraints.

Another critical issue facing Bangladesh is climate change, as the country faces rising temperatures; more frequent and intense rainfalls, storms, and flooding; and danger to coasts from rising sea levels. In the face of these, municipalities need to enhance their institutional know-how to maintain infrastructure and services, according to the press release.

With particular emphasis on promoting climate resilience and gender equity, the additional ADB financing approved this week will enable the continued funding of priority infrastructure and governance improvements in 35 municipalities with a total population of 3.1million. The project will also allocate funds based on governance performance to the top-performing remaining municipalities in the country.

Specifically, the additional financing for the third project, bringing total ADB financing up to $325 million, will contribute to build or improve 600km of roads and 300km of drains, and install or upgrade 180km of pipes for water supply with 60,000 metered household connections, according to the press release.

Slum improvement work will be undertaken in all project towns that have slums while sludge management facilities will be built in 14 project towns and solid waste sites built or improved in 20.

This work will focus on drawing up plans to tackle poverty reduction, gender issues, slum improvement, community participation, and improving municipal financial management by completing ongoing work on computerization of tax records and billing systems.

The implementation period for the project is August 2017 to June 2021.