Development banks have extended infrastructure and trade finance packages to Bangladesh.

The Asian Development Bank (ADB) approved a US$200mn loan package to improve the country’s urban infrastructure, while the International Finance Corporation (IFC) has signed a US$40mn working capital loan with Bank Asia, a local lender.

In the case of the ADB, the finance will fund 600km of road builds and improvements, 300km of drains and install 180km of pipes for water supply, with 60,000 metered household connections. It will fund priority infrastructure in the pourashava (municipalities) of Bangladesh, where populations are dense and facilities are generally basic and overstretched.

It is the latest ADB package to a country struggling to deal with a huge population boom. Only 32% of the urban population has access to piped water supply, with 58% accessing improved sanitation. With an estimated population of almost 170 million people, it is one of Asia’s most densely populated nations.

“The country’s pourashavas still need significant investment to not only improve service delivery and the urban environment but also strengthen resilience to climate change,” says  the ADB’s urban development specialist, Alexandra Vogl.

While Bangladesh’s economy is growing at 6.6%, an encouraging rate compared to other neighbouring nations, it is doing so from a low base: the dominant industry is low-value garments, with very little high-end manufacturing taking place in Bangladesh.

Exporters in the country can also find trade finance lines hard to come by, which explains the IFC’s lending with Bank Asia, to which it has also opened a US$40mn guarantee facility. The loan and guarantee will allow the local lender to extend short-term funding to borrowers, usually for export. It comes under the IFC’s global trade finance programme.