$250 Million ADB Loan to Improve, Expand Water Supplies in Bangladesh Capital

News Release | 23 October 2013

MANILA, PHILIPPINES – The Asian Development Bank (ADB) has approved a $250 million loan to expand the coverage and quality of water supplies to nearly 11 million people in Dhaka, Bangladesh’s fast-growing capital city.

“The city is struggling to meet the water needs of its booming population, and, more worryingly, its groundwater is rapidly depleting,” said Norio Saito, Principal Urban Development Specialist with ADB’s South Asia Department. “This assistance will allow Dhaka’s water authority to improve facilities and tap a new water source to take pressure off existing supplies.”

Dhaka has been drawing heavily on groundwater but the current rate of extraction is no longer sustainable with the water table falling by 2-3 meters a year. In addition, the Sitalakhya River – the city’s main source of surface water – is becoming increasingly polluted.

The Dhaka Environmentally Sustainable Water Supply Project will develop a new raw water intake at the Meghna River, about 30 kilometers east of the city, with a pumping station that has the capacity to provide 2 billion liters of water a day. It will also fund a treatment plant at Gandharbpur capable of handling 500 million liters a day, and install raw and treated water transmission pipelines. These initiatives are expected to reduce groundwater extraction by 150 million liters a day and help the city water authority raise its overall surface water supplies to 1.9 billion liters a day by 2021.

The goal is to provide twenty-four-hour water supply to all connected households in the six service zones of the Dhaka Water Supply and Sewerage Authority and reduce the dependence on groundwater to 30% of total water supply from 100% in most of the zones now.

Most people living in informal settlements rely on supplies from illegal water lines for which they pay high charges. Community-based organizations will be set up to help poor households obtain water through legal metered connections at a lower price. The groups will be responsible for paying water bills and maintaining supply points while public awareness programs will improve community knowledge on water quality and public hygiene.

The project will cost nearly $675 million with ADB’s loan coming from its concessional Asian Development Fund. ADB will partially administer a $100 million loan from Agence Française de Développement, with the European Investment Bank also providing a cofinancing loan of $100 million. The Government of Bangladesh will provide almost $225 million.

The project is expected to be completed by December 2019.