Bangladesh and Germany on Monday signed a ‘Loan Agreement’ for an additional EUR 70 million to another loan agreed earlier of EUR 90 million, and an ‘Amendment Agreement’ to the main loan, for the project titled “Climate Change Adapted Drinking Water Resources Management Dhaka II (Saidabad Water Treatment Plant Phase III)”.
The main objective of the project is to establish an environmentally friendly, sustainable, and people-friendly water supply system and to reduce dependency on groundwater by ensuring the efficient use of surface water.
On behalf of Bangladesh, Md. Shahriar Kader Siddiky, Secretary, Economic Relations Division (ERD), signed the agreements that took place at the Economic Relations Division. On behalf of Germany, Carla Berke, Head of Division, Urban Development, South Asia, KfW Frankfurt and Stefanie Klappenbach, Principal Portfolio Manager, Urban Development, South Asia, KfW Frankfurt, signed the agreements.
The project is being implemented by Dhaka WASA under the Local Government Division. The RDPP of the project was approved by the Executive Committee of the National Economic Council (ECNEC) on 23 March 2025.
The total estimated cost of the project is Tk 16,014.83 crore, of which the Government of Bangladesh will contribute Tk 4,536.17 crore, project loan amounts to Tk 11,448.66 crore, and the implementing agency will contribute Tk 30.00 crore from its own funds. The project implementation period is from 1 July 2015 to 30 June 2029.
Under the ‘Loan Agreement’, KfW Development Bank will provide the Government of Bangladesh with an additional EUR 70.00 million (approximately BDT 988 crore).
The financing will be used to construct a raw water intake and raw water pumping station on the Meghna River at Haria, build approximately 26 km of raw water transmission pipeline with an estimated diameter of 2,200 mm, and expand and upgrade approximately 54 km of the primary distribution network for supplying treated water.
Due to the additional EUR 70 million financing for the project, the Disbursement Period of the original EUR 90 million loan has been revised from 27 June 2024 to 31 December 2026, and the total financing amount has changed accordingly. As a result, the ‘Amendment Agreement’ has been signed.
The Government of Germany has been a long-standing development partner of Bangladesh. Since 1972, the total commitments of the German Government in financial and technical cooperation amount to approximately EUR 4.00 billion.
At present, KfW Development Bank is financing 13 projects in Bangladesh, including EUR 647.50 million in loans and EUR 170.00 million in grants.