Bangladesh has signed an agreement for an Asian Development Bank (ADB) loan to finance improving the “capacity, efficiency and safety” of railway systems.
Economic Relations Division Secretary Mohammad Mejbahuddin and ADB Country Director Kazuhiko Higuchi signed the $ 100 million loan agreement at the ERD office in Dhaka.
The Manila-based lender says the loan is the third tranche of the $430 million multi-tranche financing facility agreed with Bangladesh in 2006 to ‘revamp the entire railways system.’
Under the ‘Railway Sector Investment Program’, ADB has already provided $280 million in two tranches for double-tracking the Tongi–Bhairab Bazar section, implementing reforms, rehabilitating yards, extending loops at different stations in the Darsana–Iswardi–Sirajganj section, and upgrading signalling at 11 stations between Ishurdi and Darsana.
This tranche will help finance commissioning of 50 broad gauge passenger carriages and 100-meter gauge passenger carriages for the railway’s main line network.
The loan will have a 25-year term, including a grace period of five years and an annual interest rate determined in accordance with ADB’s London interbank offered rate -based lending facility.
ADB says the assistance will help increase the number of annual railway passengers by 10 percent by 2017 from 66 million in 2011.
