ADB loan of $75 million for Khulna Water Supply Project

Bangladesh government signed a loan agreement on June 27 of $75 million (approximately Tk 524 crore) with Asian Development Bank (ADB) to expand reliable access to potable water in Khulna city.

Economics Relations Division (ERD) Secretary M Musharraf Hossain Bhuiyan and ADB country director Thevakumar Kandiah signed the agreement on behalf of Bangladesh and ADB respectively at NEC-II in city's Sher-e-Bangla Nagar.

The assistance will improve and extend water distribution network and water sources management in Khulna city and ensure professional and sustainable corporate management of Khulna WASA, said an ADB release.

The project will improve the access to the piped network from 23 percent in 2010 to 62 percent by 2018, benefiting about 710,000 persons in Khulna city. It would expand the access to water supply services by building a surface water treatment plant and extending the distribution network to cover the whole city.

"The project will contain water-borne diseases and improve the overall health condition in the city," said ADB Country Director Thevakumar Kandiah. "It will also reduce the drudgery of women who spend a daily average of 90 minutes managing water for the whole family."

He said that after the project is completed in 2017, the entire population of Khulna city will benefit from improved access to clean water round the clock. The project will be implemented by Khulna WASA under the Local Government Division (LGD) while the implementation period of the project is April 2011 to June 2017.

To achieve the goal for supplying 11 crore liter pure drinking water daily in Khulna city, the following activities will be undertaken under the project. These include rehabilitation of deep tube wells and expansion of water distribution network, establishment of water distribution pipeline, construction of surface water treatment plant, distribution reservoir and overhead tanks, strengthening corporate management system of Khulna WASA and related other activities.

Under the project, the water distribution system will be extended and water will be delivered efficiently in Khulna city. An additional 490,000 persons will have a new connection to the piped network, and 220,000 persons who already have a connection will benefit from the improved services.

Of the estimated project cost of $363.60 million, Japan International Cooperation Agency (JICA) will provide about $ 184 million while the rest of $ 104.60 million will be provided by the government apart from ADB financing.

The ADB loan will have a 32-year term, including a grace period of 8 years, an interest charge of 1.0 percent per annum during the grace period and 1.5 percent per annum thereafter, and such other terms and conditions set forth in the draft loan and project agreements.

Citizens in Khulna city have been suffering from limited access to water supply services. Only 23 percent of the population of about 1 million has access to piped water supply, and the rest resorts to alternative sources, such as shared public taps and tube wells built privately.

The project will develop a sustainable water supply system in Khulna city, which relies entirely on groundwater. It will introduce surface water as the main water source for sustainable water resource management in Khulna city. The project adopts a climate-proof design, adapting to an expected increase in the salinity of the river water as a result of sea level rise.

The project's capacity building component will also strengthen the corporate management system of Khulna Water Supply and Sewerage Authority (KWASA), which has been established in February 2008. -BSS