EIB pledges €705m support for BD rail sector

JAHIDUL ISLAM | Published: April 23, 2026 23:44:01

The European Investment Bank (EIB) has pledged to support Bangladesh's railway sector through financing for key infrastructure projects, rolling-stock procurement and capacity development.
The assurance came at a bilateral meeting between the Economic Relations Division (ERD) and a delegation from the European Union (EU) and the EIB on Thursday, where the lender indicated total support amounting to €705 million, ERD officials said.
ERD Secretary Shahriar Kader Siddiky led the Bangladesh side at the meeting held at Sher-e-Bangla Nagar in the capital, while Libuše Soukupová, Head of Sector for South Asian Countries at the Directorate-General for International Partnerships (DG INTPA), led the EU side.
As part of the engagement, the EIB expressed interest in financing the Laksam-Chattogram dual-gauge double-track project and the electrification of the Joydebpur-Dhaka-Narayanganj commuter line.
Bangladesh also sought EU support for manufacturing European-standard locomotives, coaches and wagons.
Officials said the government requested assistance to upgrade railway workshops in Saidpur, Ishwardi and Chattogram, including the supply of machinery and training to strengthen local capacity.
The EIB is expected to co-finance the Laksam-Chattogram dual-gauge project alongside the Asian Development Bank (ADB). Under the proposed arrangement, the EIB will provide €600 million in loans, while the ADB will extend $400 million in the first tranche.
Another project -- the Tongi-Bhairab Bazar-Akhaura dual-gauge double-track railway -- is also expected to receive ADB financing, according to ERD sources.
Meanwhile, the EIB has indicated €105 million in loan support for implementing the country's first electric traction railway project on the Narayanganj-Dhaka-Joydebpur corridor. Beyond railways, the EU delegation expressed interest in supporting regional power connectivity among Bangladesh, India, Bhutan, Nepal and Sri Lanka, including investments in cross-border electricity generation and transmission.
The EU also signalled willingness to provide technical assistance for banking sector reforms, alongside grant support.
The focus will be on reducing non-performing loans (NPLs), while the EU advised against recapitalising banks facing capital shortages, officials said.
On average, the EU provides development assistance to Bangladesh worth around €90-100 million annually, entirely in the form of grants. Priority areas include economic development, human rights, governance and environmental sustainability.
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