Media Center

News Release

ADB, Bangladesh Sign US$ 96.1 Million
Loan to Help Improve Rural Infrastructure

Dhaka, Bangladesh, 17 September 2006

The Asian Development Bank (ADB) and the Government of Bangladesh today signed agreements for a US$96.1 million loan to help expand economic opportunities for the rural poor in Bangladesh by improving rural infrastructure and local governance.

Economic Relations Division (ERD) Secretary Md Ismail Zabihullah signed for the Government while Hua Du, Country Director of ADB’s Resident Mission in Bangladesh, signed on behalf of ADB at a simple ceremony at ERD, Sher-e-Bangla Nagar, Dhaka. Jane A. Crowder from DFID, Georg Rademacher from the German Embassy in Dhaka, Rainer Kuhnle from GTZ, and Christoph Isenmann from KfW were also present at the signing ceremony.

The project will upgrade a total of about 9,920 kilometers of tertiary roads that make up the rural road network, as well as 370 rural markets and the offices and facilities of 190 union councils, to help reduce poverty in 23 districts in north and central Bangladesh.

The 23 districts, located in Rajshahi, Dhaka, and Chittagong divisions, were selected for their poverty, poorly developed road infrastructure, and need for strengthened local governance. About 55% of the rural residents in the area covered by the project live below the poverty line, and less than half of its rural roads are in good condition.

The Local Government Engineering Department of the Ministry of Local Government, Rural Development, and Cooperatives is the executing agency for the project, which is due for completion in 2011.

“Efficient rural transport and supporting infrastructure are indispensable to reducing poverty and achieving rapid economic development in Bangladesh,” says Hua Du. “These improvements will provide local inhabitants with more efficient transport to markets and trading centers, as well as access to social and welfare services. This should lay the foundation for better economic opportunities.”

The project will also strengthen local government units to enable them to manage and maintain the local infrastructure. Bus owners and operators, rickshaw drivers, farmers and local traders will be consulted on their transport needs. More than 6 million people are expected to benefit from better access to markets and social services, resulting in an estimated 20% increase in a family’s average farm income. The retail areas of growth center markets, specially set aside for women, will reduce gender dependence of rural women producers to market their products. About 7,000 women will become self-employed and/or gain employment opportunities through jobs in the retail areas, and for maintaining sub-district and village roads and roadside plantations. Extensive need-based training will be provided to increase gender awareness and empower women to play a more effective role in local governance.

The project’s total cost is estimated at $260.5 million, with the Government contributing $78.3 million. Co-financing for the balance of $86.1 million is being considered by the United Kingdom’s Department for International Development and German Development Cooperation through the Kreditanstalt für Wideraufbau (KfW) and Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ).

ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 66 members - 47 from the region. In 2005, it approved loans and grants for projects totaling $6.95 billion, and technical assistance amounting to $198.8 million.

Contacts