A new $80bn corridor: ADB’s vision for connecting Bangladesh’s growth centres

In one of the most ambitious development bets in Bangladesh's recent history, the Asian Development Bank (ADB) is moving to mobilise $80 billion from domestic and international partners to fund a 20-year integrated development framework. 

The centrepiece of this effort, the Integrated Growth Network Development (IGND) initiative, would forge a Northwest–Dhaka–Southwest growth corridor — a vision that already has the government's in-principle backing, sealed when ADB President Masato Kanda met Prime Minister Tarique Rahman in Dhaka last month. 

ADB also intends to provide $5 billion over five years for the IGND, which will help catalyse early implementation.

The development partner plans to invest $1 billion every year for the next five years and initially bring in another $5 billion through co-financing, said Chandan Sapkota, Country Economist for ADB in Bangladesh.

The plan is to pursue quick implementation through short- and medium-term investments to create early momentum for greater investment, he said while speaking with journalists recently to provide a better understanding of the IGND initiative.

He said that 50% of the investment will come from multilateral development banks, while the remaining 50% will come from bilateral partners and the private sector.

ADB has already held meetings with development partners, and they have shown interest, said Chandan.

They are also planning to promote this investment plan in international markets through investment seminars, he said.

ADB plans to begin visits in Korea this year and then in Japan, the EU and the UK this year and next year for investment promotion and road-mapping purposes, he said.

He said that almost 50% of financing is expected to come from the private sector. "So, for that, we are looking at simplification, deregulatory reforms and capital market development.

"If you can show a bankable project that generates a return, people will come and invest. So, how do you ensure that the return is delivered? The answer lies in deregulation and capital market development for the private sector," he said.

Therefore, the government will need to provide additional incentives to the private sector to secure this 50% financing.

"We are talking to corporate lawyers right now to find out which regulations and clauses are creating problems. Therefore, we aim to compile all existing laws, regulations, guidelines and policies related to investment promotion. So, a major exercise is ongoing on that front," he said.

The IGND will be reflected in the government's upcoming five-year strategy for reform and development, which will run from FY27 to FY31, said S M Jakaria Huq, Additional Secretary and Chief of the ADB Wing within the Economic Relations Division (ERD) under the Ministry of Finance.

"In the early phase, we will focus on key growth hubs such as Chattogram and the Rangpur-Bogura region," he said while speaking with journalists recently.

"The next phase of Bangladesh's development requires progress in five key areas: better connectivity, stronger competitiveness, industrial transformation, quality job creation, and more balanced regional growth.

"There is a strong need to develop economic corridors within Bangladesh. Currently, the country is heavily dependent on a single corridor — the Dhaka–Chattogram corridor — and even that is underdeveloped beyond its two ends. In reality, this is the only functioning growth corridor in the country." Masrur Reaz, Chairman and CEO, Policy Exchange Bangladesh

"Because in today's world, connectivity alone is not enough. The real question is: what does connectivity deliver? The IGND initiative is a response to this challenge through a long-term integrated framework focused on the Northwest–Dhaka–Southwest growth corridor.

"This corridor links agricultural regions, industrial zones, logistics networks, port cities, economic zones and emerging growth centres. It brings together transport, energy, digital connectivity, skills and industrial systems under one coordinated framework. This integration is essential because fragmented development leads to limited impact," he said.

The IGND initiative could increase annual GDP growth by around 2.2% to 2.4% during the main implementation phase.

The initiative is expected to create around 10 million jobs over the next decade, equivalent to an average of nearly 1 million jobs every year, according to the IGND document.

The initiative directly covers 44 districts through a highway connecting Banglabandha Land Port to Teknaf Land Port, linking the industrial northwest with Dhaka and the coastal gateway of Chattogram and Matarbari.

This initiative also sits at the intersection of major regional connectivity frameworks, including South Asia Subregional Economic Cooperation (SASEC), BBIN and the Asian Highway network, strengthening both domestic connectivity and cross-border trade integration. Its transformational potential lies in integrating transport, logistics, energy and digital systems to crowd in private capital.

When asked about the opportunities and challenges of ADB's mega investment plan, Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh, said, "Regional connectivity in South Asia remains weak — not just for Bangladesh, but across the region as a whole. As a result, regional trade and investment are significantly lower compared to other regions such as Europe, South America or even Africa. In fact, South Asia lags behind both West and East Africa in terms of regional economic cooperation.

"For Bangladesh in particular, export markets are highly concentrated—nearly 80% are in North America and Europe. This makes diversification essential. Asia, including South Asia, presents a major untapped opportunity. However, due to poor regional connectivity, Bangladesh's participation in regional trade, investment and value chains remains very limited."

According to Reaz, improving regional connectivity is crucial. India, of course, will prioritise its national interests, but it is also a large and important market. Expanding economic interaction with India would be beneficial for Bangladesh and could significantly support its economic growth.

"Secondly, there is a strong need to develop economic corridors within Bangladesh. Currently, the country is heavily dependent on a single corridor—the Dhaka–Chattogram corridor—and even that is underdeveloped beyond its two ends. In reality, this is the only functioning growth corridor in the country," said Reaz.

"As a result, the economic potential of the rest of the country remains underutilised. Balanced regional development is not taking place: the western region remains relatively underdeveloped, while the eastern side performs somewhat better due to remittances and industrial activity concentrated around Dhaka and Chattogram," he added.

Reaz believes that to unlock domestic economic potential, it is essential to connect internal markets and bring production and commercial centres closer to infrastructure. Economic corridors can play a key role in achieving this and promoting balanced regional development across the country.

"However, a major challenge lies in financing and implementation capacity. The estimated requirement is around $80 billion over 20 years—equivalent to $4 billion annually—just for this purpose. This would involve multiple projects, including roads, power and market development," he explained.

"The question is whether Bangladesh has the capacity to implement such large-scale investments. Currently, even total Annual Development Programme (ADP) spending is around $2 to $2.5 billion. Allocating $4 billion annually to a single initiative would strain resources, especially when sectors such as education and health also require funding," he added.

He explained further that Bangladesh faces significant weaknesses in project implementation, quality assurance and expenditure management. Given these limitations, there is reasonable doubt about whether such large-scale economic corridor projects can be effectively executed.

"Both regional connectivity and the expansion of domestic growth centres through economic corridors are critically important for Bangladesh. However, addressing capacity constraints will be essential to realising these goals," he said.