ADB lends Bangladesh $275m for affordable housing, hill tracts power projects

The government and the Asian Development Bank (ADB) today (7 October) signed loan agreements worth $275 million and a $2.72 million grant for projects to expand affordable housing finance and improve sustainable energy infrastructure in the Chittagong Hill Tracts.

Economic Relations Division (ERD) Secretary Md Shahriar Kader Siddiky and ADB Bangladesh Resident Mission Country Director Qingfeng Zhang signed the agreements on behalf of the government and ADB, respectively.

$100m for affordable housing

The government signed a $100 million loan agreement with ADB for the Inclusive Affordable Housing Finance Project, which will be implemented by Palli Karma-Sahayak Foundation (PKSF) under the Financial Institutions Division of the Ministry of Finance.

The project aims to economically and socially empower low- and middle-income families by improving access to housing. It will expand housing microfinance services for low- and middle-income borrowers while also supporting women's empowerment.

By increasing access to affordable and climate-resilient housing finance, the project is expected to contribute to poverty reduction, stronger social protection, improved living standards and inclusive and sustainable economic growth.

The loan is an ADB Ordinary Operations (Concessional) loan carrying 2% annual interest and repayable over 25 years, including a five-year grace period.

$175m loan, $2.72m grant for hill tracts

For the Sustainable Energy Development and Community Empowerment in the Chittagong Hill Tracts Project, the government signed a $175 million loan agreement and a $2.72 million grant agreement with ADB.

The project will be implemented by the Bangladesh Power Development Board (BPDB) under the Power Division of the Ministry of Power, Energy and Mineral Resources.

It aims to ensure a reliable electricity supply to remote and underserved communities in the Chittagong Hill Tracts by expanding and modernising the electricity distribution system, improving the climate resilience of power infrastructure and creating opportunities for electricity-dependent economic activities.

The $175 million concessional loan carries 2% annual interest and is repayable over 25 years, including a five-year grace period.

The $2.72 million grant will come from the Japan Fund for Prosperous and Resilient Asia and the Pacific (JFPR), an externally financed fund administered by ADB.

ADB Executive Director Satya Srinivas Lolla attended the signing ceremony, along with senior officials from both sides.

To date, ADB has provided Bangladesh with $36.69 billion in loans and $636.52 million in grants. Its development assistance to Bangladesh mainly covers power and energy, local government, transport, education, agriculture, health, water resources, governance and financial sectors.