Loan for Improvements to Dhaka Water Supply

The European Investment Bank (EIB) is lending EUR 100 million to the Government of Bangladesh to finance a new sustainable surface water supply system in Dhaka. The financing contract was signed in Dhaka today.

The main project component is a new sustainable surface water supply system comprising a raw water intake at the Meghna River about 30 km east of Dhaka, a 21 km raw water transmission pipe line and a new 500 million litres per day (MLD) WTP at Gandharbpur. The project will also include 14 km treated water transmission pipelines from the Gandharbpur WTP to the injection point of the existing distribution network and distribution reinforcements (+/- 30 km) in the target area with an estimated population of approximately 3 million. The water supply project component is complemented by a distribution network improvement component that will be implemented in 16 district metered areas (DMAs) with a population of approximately 1.3 million. The project will be implemented between 2014 and 2019.

In line with the European Union mandate guiding the EIB lending mandate for Asia, the project will promote the development of social and economic infrastructure; it will improve availability, quality and reliability of water supply services in Dhaka, with positive health and environmental benefits for the population. The operation will also contribute to EIB’s Climate Action as it will improve the resilience to adverse impacts from climate change, in particular droughts.

This is the second lending operation to the public sector in the country, the first one being the EUR 82 million in support of more efficient power generation was signed in November 2013.

The EIB is granting this loan under the current lending mandate for Asia and Latin America (ALA IV), which enables it to support investment designed to develop the local private sector, build social and economic infrastructure and mitigate the effects of climate change.

Since 1993 the EIB has operated under four successive Asia and Latin America mandates.  Under these mandates, from 1993 until 2013, the EIB has already provided EUR 5.6 billion for projects in Asia.