ADB to lend $492m for infrastructure

The Asian Development Bank will provide $492 million for infrastructure development in Bangladesh over the next three years to help boost regional cooperation, a senior official of the lender said.

“We want to promote regional cooperation as it will boost trade, accelerate economic growth and thereby reduce poverty,” said Ronald Antonio Q Butiong, principal regional cooperation specialist at the ADB.

The Manila-based lender focuses on a South Asia Sub-regional Economic Cooperation (Sasec) programme to finance key infrastructure projects in roads, railways, trade facilitation and energy in Bangladesh.

Under its latest country operations business plan, the ADB will finance three projects: the second Bangladesh-India electrical grid interconnection at a cost of $105 million, Dohazari-Cox's Bazar railway link at $217 million, and road and trade facilitation at $170 million.

Once implemented, the projects will benefit the country immensely, Butiong told The Daily Star in an interview at the ADB headquarters in the Philippines recently.  

The Sasec programme, taken up in 2001, brings together Bangladesh, Bhutan, India, the Maldives, Nepal, and Sri Lanka in a project-based partnership to promote regional prosperity by improving cross-border connectivity, boosting trade among member countries, and strengthening regional economic cooperation.

“There are immense possibilities for increasing mutually beneficial trade between the six Sasec countries and creating access into distant Asian regional markets,” he said.

Under the programme, the ADB has a plan to lend $3-$4 billion to the six countries for the next three years, Butiong said, adding that the development bank focuses on regional grid interconnectivity.

The ADB, serving as the secretariat to the Sasec programme, has already funnelled $40 million into building electrical interconnection between Bheramara in Bangladesh and Baharampur in India, he said.

“Electricity is a key element to enhance economic growth. So, we want to help the South Asian countries build grid interconnectivity,” he added.

Grid interconnectivity will boost power trade among the neighbouring countries. 

At present, Bangladesh is importing 500 megawatts of electricity from India through grid interconnectivity, with a process underway to bring in another 600MW, according to the Power Development Board.   

The country plans to import 3,500MW from other Saarc members by 2030 under its power sector master plan.

The ADB official also praised the Bangladesh government for opening headquarters of Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec) in Dhaka. “It will open up a new horizon for regional cooperation.” 

The ADB urged the Bangladesh government to focus on simplifying customs procedures to help boost overseas trade.  

“Businesses now have to go through cumbersome customs processes to import and export goods,” said Rosalind McKenzie, regional cooperation specialist of South Asia Department at the ADB. 

“They (the businesses) have to submit a number of documents which are mostly overlapping,” she said. “So it has become necessary to streamline customs operations.”

Currently, all consignments are inspected at Bangladeshi ports, while global practice, contrarily, is a risk-based system. The ADB also plans to work on customs modernisaton and harmonisaton, Rosalind said.

The lender has so far financed nine projects worth around $900 million in Bangladesh under the Sasec programme since 2001, Butiong said.

Since the inception of the programme, Sasec countries have implemented 33 regional projects worth a total of $6.3 billion in energy, transport, trade facilitation, and information and communications technology sectors, he said.

suman.saha@thedailystar.net