Bangladesh and Germany signed two separate loan agreements worth 160 million euros for a project titled “Climate Change Adapted Drinking Water Resources Management Dhaka II (Saidabad WTP Phase III)” at the Economic Relations Division (ERD) on Monday.

The two countries inked the “Loan Agreement” for an additional 70 million euros for the main loan, and an “Amendment Agreement” for the main loan of 90 million euros, according to a press release.

On behalf of Bangladesh, ERD Secretary Md Shahriar Kader Siddiky signed the agreements.

On behalf of German state-run development bank KfW, Carla Berke, head of division at Urban Development for South Asia region; and Stefanie Klappenbach, principal portfolio manager at Urban Development for South Asia region; signed the agreements.

The main objective of the project is to establish an environment friendly, sustainable, and people-friendly water supply system and to reduce dependency on groundwater by ensuring the efficient use of surface water.

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.

The total estimated cost of the project is Tk16,014.83 crore, of which the government of Bangladesh will contribute Tk4,536.17 crore, project loan amounts to Tk11,448.66 crore, and the implementing agency will contribute Tk30.00 crore from its own funds. The project implementation period runs from 1 July 2015 to 30 June 2029.

Under the “Loan Agreement”, KfW will provide Bangladesh with an additional 70.00 million euros (approximately Tk988 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 70 million-euro financing for the project, the Disbursement Period of the original 90 million-euro 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 4.00 billion euro.

At present, KfW Development Bank is financing 13 projects in Bangladesh, including 647.50 million euro in loans and 170.00 euro million in grants.