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ADB to provide over $1bn for five projects

Loan agreements signed


Published : 28 Nov 2023 10:51 PM

The government of Bangladesh and the Asian Development Bank (ADB) on Tuesday signed loan agreements worth about $1.026 billion for five projects in the areas of energy, health, Chattogram Hill Tracts, education and in road connectivity in the country.

Out of the total amount, the Manila-based lending agency would provide $200 million for the Smart Metering Energy Efficiency Improvement Project, $336.5 million for Vaccines, Therapeutics and Diagnostics Manufacturing and Regulatory  Strengthening Project, $90 million for Chattogram Hill Tracts Inclusive and Resilient Urban Water Supply and Sanitation Project, $100 million for Improving Computer and Software Engineering Tertiary Education Project and $300 million for Third tranche of the Second South Asia Subregional Economic Cooperation (SASEC) Dhaka-Northwest Corridor Road Project.

Md. Shahriar Kader Siddiky. Secretary, Economic Relations Division (ERD), Ministry of Finance and Edimon Ginting, Country Director, Bangladesh Resident Mission, ADB signed the loan agreements on behalf of Bangladesh and ADB respectively. 

Among the total credit amount signed today, the ADB approved $68.22 million and Euro 277.881 million (equivalent to $300 Million) from OCR (Regular). Interest rate is SOFR (Secured Overnight Financing Rate) /Euribor (Euro Interbank Offer Rate) 0.50% with maturity premium of 0.10% and commitment charge of 0.15% on undisbursed mount. 

The rest $358.25 million is from Ordinary Operation (Concessional). The interest rate on Concessional loans is 2% fixed. Both loans are repayable in 25 years including 5 years grace period. 

BSS adds: Commenting on the Smart Metering project, ADB country director Edimon Ginting said this project would help save gas; prevent gas wastage; build customers’ awareness of the safe and efficient use of gas; and improve the financial performance of the gas distribution company by improving revenue streams and reducing billing, collection and monitoring costs.

"This project will also contribute to meet Bangladesh’s climate mitigation targets for the gas distribution subsector as set out in the updated 2021 nationally determined contributions,” Ginting added.

 The details of the signed projects are as follows: 

Vaccines, Therapeutics and Diagnostics Manufacturing and Regulatory Strengthening Project under the Asia-Pacific Vaccine Access Facility (APVAX)' amounting to US$ 336.47 million in which 168.25 million Ordinary Operation (Concessional) loan and 168.22 million OCR (Regular) loan will be implemented by Essential Drugs Company Limited (EDCL) from December2023 to December 2030 and Directorate General of Drug Administration (DGDA)from January 2024-December 2028 respectively under the Health Services Division. 

The aims of these projects are to establish an international standard laboratory for successful vaccine research and production of high- quality vaccines in the country. The laboratory will furnish to the country's EPI requirements, including the production of new species of vaccines maintaining WHO prequalification.

South Asia Sub-regional Economic Cooperation Dhaka Northwest Corridor Road Project- Phase 2- Tranche3 amounting to Euro 277.881 million (equivalent to $300 Million) OCR (Regular) loan will be implemented by Roads & Highways Department under the overall supervision of Road Transport and Highways Division from 01 September 2016 to 31 December 2024. 

The main objectives of the project are to improve the sub-regional transport, trade and to upgrade the corridor (190.40km) to four lane standard with feature of slow moving vehicular traffic (SMVT) lane. The improvement includes gender responsiveness and major road safety feature by constructing new pavement, bridges, flyovers, underpasses, railway overpass and interchange. The project will also improve the institutional capacity of Roads and Highways Department (RHD). 

Smart Metering Energy Efficiency Improvement Project amounting to $200 million OCR (Regular) loan will be implemented by Titas Gas Transmission Distribution Company Limited under the Energy and Mineral Resources Ministry from January 2024 to December 2028. 

The project aims to prevent wastage of gas used in residential phase and to ensure efficient use of gas in Titas affiliated areas. 

 Chattogram Hill Tracts Inclusive and Resilient Urban Water Supply and Sanitation Project amounting to USS 90 million in Ordinary Operation (Concessional) loan will be implemented by Department of Public Health Engineering under the Local Government from July 2023 to December 2028. The project aims to ensure sustainable and integrated safe water supply and waste management services in Rangamati, Bandarban and Lama Hill Municipalities. 

Improving Computer and Software Engineering Tertiary Education Project (ICSTEP) amounting to100 million Ordinary Operation (Concessional) will be implemented by University Grants Commission, Dhaka University, Bangladesh University of Engineering and Technology, Jashore Science and Technology University under Secondary and Higher Education Division from July 2023 to June 2028. 

The objectives of the project are to create skilled manpower in the manufacturing arena and new employment generation in the industrial sector. ADB is one of the largest multilateral development partners of Bangladesh. 

The ADB has been extending assistance to the country's prioritized sectors since Bangladesh became a member of ADB in 1973. ADB's total loan to Bangladesh stands at $30916.47 million whereas total grant amount around $571.2 million. ADB's development assistance mainly focuses on power, energy, local government, transport, education, agriculture, health, water resources, good governance and financial sectors of Bangladesh.

Senior officials of the Government of Bangladesh and ADB were present at the signing ceremony.