The Asian Development Bank (ADB) said on Wednesday it had granted a US$1.5 billion loan to Bangladesh to build a railway line that will bring trade and tourism to southern parts of the country and improve access to Burma and elsewhere in Southeast Asia.
The development loan, to be disbursed in four tranches till 2022, is the largest ADB has ever granted Bangladesh and the biggest it has committed to a railway project.
“The planned 102-kilometre [63-mile] stretch of railway will connect the tourist town of Cox’s Bazaar with the existing Bangladesh railway network,” said Markus Roesner, principal transport specialist with ADB’s South Asia department.
“We expect the railway will mean tourism increases at least 5 percent annually, bringing huge business opportunities to the region,” Roesner told Reuters.
The rail line will be a part of the Trans-Asia Railway network, a UN-led initiative to provide seamless rail links between Asia and Europe.
“With Bangladesh located at the heart of the Trans-Asia Railway, efficient rail lines and services will put the country in an excellent position, in the future, to tap markets both east and west,” Roesner said.
All the tranches have a 25-year term with a five-year grace period. The interest rate for all except $90 million of the first tranche will be based on Libor, while the $90 million in special funds will carry an interest rate of 2 percent, he said.