The Asian Development Bank (ADB) and the government of Bangladesh on Sunday signed a loan agreement for $400 million to build a dual-gauge railway connecting Chattogram and Cox’s Bazar to promote trade, investment and tourism in Bangladesh.

Sharifa Khan, Secretary, Economic Relations Division, and Jiangbo Ning, ADB Deputy Country Director for Bangladesh signed the agreement on behalf of Bangladesh and ADB, respectively.

The assistance forms the third part of $1.5 billion ADB loans for the SASEC Chattogram-Cox’s Bazar Railway Project.

ADB approves $400mn loan to Bangladesh to enhance revenues, reforms, help small businesses

The loan will help complete the construction of the 102 kilometers of new railway line between Chattogram and Cox's Bazar.

“ADB is assisting the government to shift from road to rail, which is a climate-friendly, safe, affordable, and efficient mode of transport”, said Jiangbo Ning.

“The project is a priority investment and will open up the unserved areas of Cox’s Bazar region by promoting investment, trade and tourism.” “The project also integrates features that are friendly to the elderly, women, children, and people with disabilities,” Ning added.

ADB lowers Bangladesh’s GDP growth forecast to 5.3% in FY 23

The new rail link, which is expected to open in 2023, aims to transport 2.9 million passengers annually between Chattogram and Cox's Bazar by 2024.

The construction of this railway section is one of several ADB railway projects to help Bangladesh meet its targets under its Eighth Five-Year Plan and Railway Master Plan.

ADB forecasts China, India to power strong growth in '23

Chattogram-Cox’s Bazar Railway is part of the Trans-Asia Railway network, an initiative led by United Nations, aiming to provide seamless rail links between Asia and Europe to better connect people and markets, according to ADB.