World Bank approves $650m aid to Bangladesh for Bay Terminal development
Bay Terminal, which will be operated by leading international terminal operators, is designed to significantly reduce vessel turnaround time, potentially saving the economy around US$1 million daily
The World Bank's Board of Executive Directors today approved $650 million to aid Bangladesh in developing infrastructure for the Bay Terminal deep seaport. This investment is expected to enhance Bangladesh's global trade competitiveness and reduce import and export costs by improving port operational efficiency and attracting private investment.
The Bay Terminal Marine Infrastructure Development Project will involve the construction of a 6 km climate-resilient breakwater to shield the harbor from waves, currents, and extreme weather. The project will also include dredging of the port basin, entrance, and access channels, reads a World Bank press release.
The new, modern Bay Terminal, which will be operated by leading international terminal operators, is designed to accommodate larger vessels, such as panamax ships, and significantly reduce vessel turnaround time, potentially saving the economy around US$1 million daily.
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Currently, the Chittagong Port-which is the maritime gateway for over 90% of Bangladesh's international trade volume and 98% of its container traffic-can only receive small feeder vessels during limited hours of the day, according to reports.
"Bangladesh's international trade heavily relies on Chittagong Port, which faces significant capacity constraints," said Abdoulaye Seck, World Bank Country Director for Bangladesh and Bhutan. "The Bay terminal project will be a game changer. It will improve Bangladesh's export competitiveness through enhanced port capacity and reduced transportation cost and time, opening new opportunities to key global markets."
Moreover, the project will mobilize private investment for the development of container terminals. The combined investment from the World Bank and government funding will bolster investor confidence and help mitigate risks associated with the overall Bay Terminal development.
Furthermore, the World Bank Group's private sector arm, the IFC is considering investing in one of the proposed private sector led terminal.
"The Bay Terminal will contribute to modernizing the country's seaport infrastructure and improving its connectivity to regional and international markets," said Hua Tan, World Bank Senior Transport Specialist and Team Leader for the Project.
The Bay Terminal, located in the Anandangar/Sandwip channel, west of the Chittagong port and close to existing road and rail links to Dhaka, is expected to handle 36 percent of Bangladesh's container volumes.
Over one million people, half of whom are women, are expected to directly benefit from improved access to sustainable transport services. This includes shipping companies, business communities, importers, exporters, and freight forwarders.
In FY 23-24, the World Bank committed a record $3.4 billion in support to Bangladesh, including this project. The World Bank was among the first development partners to support Bangladesh following the country's independence. Since then, the World Bank has committed about $42.3 billion in grants, interest-free and concessional credits to the country.
