ADB provides US$ 100 million to improve railway systems

Staff Correspondent

The Asian Development Bank and the government of Bangladesh on Wednesday signed an agreement for a US$ 100 million loan to help improve the capacity, efficiency and safety of railway systems in Bangladesh.
Mohammad Mejbahuddin, secretary, Economic Relations Division and Kazuhiko Higuchi, Country Director for ADB in Bangladesh, signed the agreement on behalf of their respective sides at a ceremony at ERD in the capital.
The loan is the third tranche of the US$ 430 million multi-tranche financing facility agreed between ADB and Bangladesh in 2006 to revamp the entire railways system through the Railway Sector Investment Programme.
Under the programme, ADB has already provided US$ 130 million and US$ 150 million as first and second tranches respectively for double-tracking the Tongi–Bhairab Bazar section, implementing reforms, rehabilitating yards, extending loops at different stations in the Darsana–Iswardi–Sirajganj section, and upgrading signaling at 11 stations between Iswardi and Darsana.
The last tranche will help finance commissioning of 50 broad gauge passenger carriages and 100-meter gauge passenger carriages for the railway’s main line network.
The new carriages will be added to Bangladesh Railway’s fleet of rolling stock and increase the transport capacity provided by BR. The new carriages will use the increased line capacity created with ADB assistance provided earlier, and thus improve BR’s position in the passenger market.
The loan will have a 25-year term, including a grace period of 5 years and an annual interest rate determined in accordance with ADB’s London interbank offered rate-based lending facility.

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