Staff Correspondent:

Bangladesh signed a €200 million loan agreement with France on Wednesday (April 30) for financing the ‘Saidabad Water Treatment Plant Phase-III’ project of Dhaka WASA under the Local Government Division.

Md Shahriar Kader Siddiky, secretary of the Economic Relations Division (ERD), and Cynthia Mela, country director of Agence Française de Développement (AFD), signed the agreement on behalf of their respective sides at ERD office in Dhaka, reads a press release.

The purpose of the loan is to ensure sustainable and safe water supply in Dhaka city. Through Saidabad Phase-I and Phase-II plants, 450 million litres of treated water are supplied per day which are collected from the Shitalakhya River.

High level contamination of this water creates health hazards. The pre-treatment process required to make this water treatable consumes huge electricity and accelerates deterioration of equipment, raising operational costs and reducing efficiency.

The implementation of the Saidabad Water Treatment Plant (Phase-III) project will address these issues by replacing the use of Shitalakhya water by the Meghna River as source. This shift will help maintain the efficiency of Phase-I and Phase-II while reducing dependence on groundwater.

As Dhaka continues to expand, the project is essential to ensuring a sustainable water supply for the city’s growing population. Thus, the existing water quality will be improved. Additionally, Saidabad-III will supply 450 million litres per day.

The loan will bear interest rate 1.77% for indicative fixed rate and EUR 6 M-90bp, where grace period is five years and repayment period is 15 years. The amount of grant is 25.19%.

AFD has been providing significant support to Bangladesh as part of economic cooperations since 1972. Total support from AFD since 1972 is $2643.36 million.

At present, AFD is financing 12 projects with total support of €1341.86 million including €650 million budget support.