The Government of Bangladesh and the Asian Development Bank (ADB) on Friday signed four loan agreements totaling US$1.304 billion aimed at modernising vital infrastructure, strengthening the financial sector, and enhancing the country’s climate resilience.
The agreements were signed by Md Shahriar Kader Siddiky, Secretary of the Economic Relations Division (ERD), Ministry of Finance, and Hoe Yun Jeong, ADB’s Country Director for Bangladesh. Senior officials from both the government and ADB attended the signing ceremony, according to an official press release.
The four loans are intended to support key national priorities:
$500 Million for Banking Sector Reform Program
A $500 million budget support will be used under the Stabilizing and Reforming the Banking Sector Program – Subprogram 1, designed to enhance financial sector stability and implement structural reforms.
Led by the Finance Division, Bangladesh Bank, and the Financial Institutions Division, the program focuses on maintaining resilience amid economic challenges and strengthening credit systems to support sustained growth.
The loan is repayable over 15 years, including a 3-year grace period, with an interest rate of SOFR + 0.5%.
$400 Million for Climate Resilient Inclusive Development
This budget support of $400 million under Subprogram 2 of the Climate Resilient Inclusive Development Program will help Bangladesh reduce vulnerability to climate-related shocks. The program spans multiple government bodies, including the Planning Commission, Power Division, Ministry of Disaster Management, and others.
Key objectives include promoting low-carbon, sustainable development, building resilience to climate change impacts and reducing greenhouse gas emissions.
The loan will be repaid over 25 years, with a 5-year grace period at a fixed interest rate of 2%.
$204 Million for SASEC Road Corridor Development
ADB’s $204 million Tranche 4 loan under the SASEC North West Corridor Phase 2 project will support upgrades to the Elenga-Hatikumrul-Rangpur road. The Roads and Highways Department is overseeing the project, which brings ADB’s total investment in the corridor since 2017 to $1.2 billion.
The loan terms include 25 years repayment, a 5-year grace period, and an interest rate of SOFR + 0.5%.
$200 Million for Power Grid Modernisation and Renewable Integration
Under the Power Transmission Strengthening and Integration of Renewable Energy Project, $200 million will be used to enhance power transmission infrastructure. Implemented by Power Grid Bangladesh PLC, the initiative will upgrade nine substations, add 141 km of new transmission lines and integrate renewable energy from southern Chattogram.
The project is scheduled through June 2030 and is financed under ADB’s ordinary capital resources. Loan terms include a 25-year repayment, a 5-year grace period, and an interest rate of SOFR + 0.5%.
These investments reflect Bangladesh’s ongoing efforts to advance sustainable development, improve service delivery, and future-proof key sectors against global challenges.