The Asian Development Bank will provide $ 120 million to Bangladesh to overhaul urban planning, infrastructure, and services in two big city regions—Dhaka and Khulna.
An agreement to this effect was signed between the government and the ADB at a simple ceremony at the Economic Relations Division in Dhaka on Wednesday.
ERD secretary M Musharraf Hossain Bhuiyan and ADB country director Thevakumar Kandiah inked the loan agreement on behalf of Bangladesh and ADB respectively.
The fund for the Bangladesh City Region Development Project will target energy-efficient and environment-friendly urban services, more coordinated development planning, and stronger management capacity for Dhaka and Khulna city corporations and adjoining secondary towns.
The loan from ADB's Special Fund resources covers about 71 per cent of the total project cost of $170 million.
It has 32-year tenure, with an 8-year grace period carrying an annual interest charge of 1 per cent during the grace period, and 1.5 per cent for the balance of the term.
The government of Bangladesh will provide counterpart support of $ 50 million.
The technical assistance will include a $ 675,000 grant from ADB's concessionary Technical Assistance Special Fund, while ADB will also administer a grant of $ 1.5 million from the government of Japan-established, Asian Clean Energy Fund, held under the Clean Energy Financing Partnership Facility.
The Local Government Engineering Department is the executing agency of the project to be completed by December 2016.
'The project aims to increase the growth potential and environmental sustainability of these two city regions,' the ADB country director said.
'Municipalities are not well prepared to face the impending negative impacts of climate change, and are not well aware of the potential benefits of efficient energy use, and this project will help address these concerns,' he added.
Along with physical improvements to water, drainage, urban transport and other facilities, the project will incorporate a pilot programme that will install energy-efficient water pumps and solar-powered streetlights.
This will deliver substantial cost savings for municipal authorities as well as reduce carbon dioxide emissions.
Based on a study to simulate climate change impacts, the project will also support adaptation measures to strengthen climate change resilience, notably the improvement of drainage in Khulna.
To tackle planning weaknesses, the project will review and update the existing urban plans, including the Dhaka Metropolitan Development Plan, and draw up a framework for integrated, coordinated regional development.
Support will be given to help municipal agencies improve their capabilities for urban planning, tax assessment, property tax collection, human resource management and public participation.
Performance-based funding for a previous urban infrastructure project in Bangladesh was successful in meeting planned outcomes, and ADB will again link its financing to performance criteria, providing an incentive for participating municipalities to meet targets.
Source : New Age
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