ADB approves $100mn loan for rural road network development in Bangladesh

The Asian Development Bank (ADB) has approved a $100 million loan to expand the coverage of an ongoing rural road network improvement project in Bangladesh, connecting the rural population to agricultural development zones.

This additional financing will scale up the current road network development, under the Rural Connectivity Improvement Project, from 1,700 kilometers (km) to 2,630 km of rural roads. It will build on the $200 million financial package approved in 2018 aimed at upgrading rural roads in 34 districts to all-weather standards with climate resilience and safety features.

The impact and outcome of the overall project are expected to be further enhanced with the coverage of additional geographic areas. The expanded project will benefit 40.2 million inhabitants.

"The increased support brings more rural communities closer and faster to economic development activities, which accelerates the delivery of products and services from agricultural lands to markets," said ADB Senior Water Resources Specialist Olivier Drieu. "Women and children will have easier and safer access to education, employment, health, and other essential social services in any weather condition."

Inadequate rural transport and poor market infrastructure remain a challenge to Bangladesh's rural development. The situation is further worsened by recurrent flooding and disasters that paralyze agricultural value chains. Less than half of the rural population has access to all-weather roads, which make up less than a third of the total length of rural roads in the country.

The additional funding will also supplement the government's infrastructure spending to boost the local economy, which has been affected by the novel coronavirus disease (COVID-19) pandemic. Infrastructure spending will generate local employment, increase access of rural communities to health services and medical supplies, and lay the ground for long-term growth prospects of the economy.

The Rural Connectivity Improvement Project supports the government's Seventh Five Year Plan to increase the percentage of the country's rural roads classified as good from 43% in 2016 to 80% in 2020. The overall project will continue to strengthen governance and institutional capacity in rehabilitating and maintaining rural roads with the use of a geographic information system to optimize monitoring of road conditions, thus sustaining an efficient rural road network that would boost further growth of the rural economy.

The total cost of the project, which is expected to be completed by 2024, is $449.23 million, with the Government of Bangladesh contributing $149.23 million.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.