ADB to back Bangladesh with $8bn in funding

The Manila-based lender will provide $1.5bn to support a railway project in its biggest investment in the country to date.

The Asian Development Bank plans to increase public and private sector lending to Bangladesh to $8 billion through 2020 under the new five-year partnership strategy.

The new plan is aligned with the Bangladeshi government's goals of creating new sources of growth, generating employment and supporting rural development for regionally balanced growth, Kazuhiko Higuchi, country director at the ADB's Bangladesh office, said in a statement today.

Following the implementation of the strategy, the ADB proposes to support major railway and road network capacity improvements, such as the development of Chittagong port and urban transport in Dhaka. It will also back projects in areas including power, water, rural infrastructure and urban development.

In the bank's previous five-year strategy of 2011-2015, ADB's lending to Bangladesh exceeded $5 billion.

The bank has just made its biggest investment ever in Bangladesh as it prepares to provide $1.5 billion for the construction of a 102km stretch of the Trans-Asia Railway, in the southern region of the country, according to another statement released yesterday.

The Trans-Asia Railway is an initiative led by the United Nations Economic and Social Commission for Asia and the Pacific, connecting Asia to Europe with rail links. ADB and other development partners are also funding further railway projects concentrated on two rail corridors from Dhaka through Chittagong to Cox's Bazar, and from Dhaka to Khulna, in the west.

Currently, Bangladesh railway's freight and passenger market shares are around 4 percent and the government aims to boost the figure to 15 percent and 10 percent respectively under the railway master plan.