Its goal is to promote trade, investment, and tourism in Bangladesh
The Asian Development Bank (ADB) will provide $400 million to build a dual gauge railway line between Chittagong and Cox’s Bazar.
A loan agreement to this effect was signed between ADB and the government's Economic Relations Division (ERD) on Thursday.
Monowar Ahmed, ERD secretary, and Manmohan Parkash, country director of ADB, signed the deal at the ERD office in Dhaka.
Once completed, the railway link will help promote trade and tourism in the country, officials said.
The assistance forms the second part of a $1.5-billion ADB loan for the South Asia Subregional Economic Cooperation (SASEC) Chittagong-Cox’s Bazar Railway Project. The loan will finance around 27% of the construction of a 102-kilometre railway line between Chittagong and Cox’s Bazar.
“ADB is committed to helping Bangladesh develop its railways, which is a safe, affordable and environment friendly mode of transport,” Manmohan said.
The project is a priority investment under Bangladesh's Seventh Five-Year Plan, 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 towards the elderly, women, children and people with disabilities, said Manmohan.
Moreover, the government said it would boost the tourism industry by increasing connectivity.
“ADB is supporting Bangladesh in many ways, particularly in railways. This is one of the great and timely projects. This will not only enhance the connectivity, but also have an impact on establishing better connectivity with the neighboring countries,” said ERD Secretary Monowar Ahmed.
The loan is payable in 25 years, including a 5-year grace period, with interstate of Euribor +0.5%, maturity premium of 0.1%, and commitment charge of 0.15%.
The new rail link, which is scheduled to open in 2023, aims to transport 2.9 million passengers annually between Chittagong and Cox’s Bazar by 2024.
The Chittagong-Cox’s Bazar Railway is part of the Trans-Asia network, an initiative led by the United Nation, aiming to provide seamless rail links between Asia and Europe to better connect people and markets.