ADB to channel $110m loan for pvt infrastructure dev

The Asian Development Bank (ADB) will provide US$110 million in loan to Bangladesh for developing the private sector infrastructure including renewable energy.
The credit line will support the second phase of Public-Private Infrastructure Development Facility under the state-owned Infrastructure Development Company Ltd. (IDCOL), said a statement.
The World Bank and the Japan International Cooperation Agency will co-finance the project with $99.5 million and $96 million respectively. Private sector investors will also contribute $50 million as equity financing, and debt funding.
Mohammad Mejbahuddin, Secretary, Economic Relations Division (ERD) and Oleg Tonkonojenkov, Deputy Country Director and Officer-in-Charge of ADB's Bangladesh Resident Mission, signed an agreement on Sunday on behalf of Bangladesh and ADB respectively for the lending facility in the city.
"Low investment in infrastructure is holding back development and economic growth in Bangladesh," said Mr Tonkonojenkov.
"Getting more power stations, roads, and water networks built would accelerate development, and could draw in more foreign direct investments," he added.
The loan will help IDCOL to bump up investments in power generation, water and sanitation, transportation, and information technology.
IDCOL currently has a pipeline of eight energy projects with a total investment amount of around $235 million. This will also support IDCOL to expand its successful programme to finance off-grid solar home systems for households and small businesses in remote rural areas. IDCOL hit its target of 2 million installations in 2013, and is now seeking to finance 2 million more by 2015.
The government remains the main source of infrastructure spending in Bangladesh, but cannot alone provide the finance needed.  
The nation's private investors struggle to get the long-term financing they need from underdeveloped capital markets or from banks that are usually reluctant to provide funds with long tenors because of potential asset-liability mismatch.
Poor transport and communications networks also hold back the economy, while poor sanitation and water systems undermine public health.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth and regional integration. Established in 1966, it is owned by 67 members -- 48 from the region.