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Bangladesh and France have signed a loan agreement worth €200 million to finance the ‘Saidabad Water Treatment Plant Phase-III’ project under Dhaka Water Supply and Sewerage Authority (DWASA).
The project, which falls under the Local Government Division, aims to ensure a sustainable and safe water supply for the rapidly growing population of Dhaka.
The agreement was signed on Wednesday at the Economic Relations Division (ERD) in Agargaon, Dhaka.
Md. Shahriar Kader Siddiky, Secretary of ERD, signed on behalf of the Government of Bangladesh, while Cynthia MELA, Country Director of Agence Française de Développement (AFD), represented the Government of France.
Officials from ERD, the Local Government Division, and DWASA were present at the signing ceremony.
The new financing will facilitate the implementation of the third phase of the Saidabad Water Treatment Plant, which will add an additional 450 million litres of treated water per day to the city’s supply. This phase will replace the current water source, the Shitalakhya River—known for its high contamination levels—with water from the Meghna River. The change is expected to improve water quality, reduce electricity consumption in pre-treatment, and extend the lifespan of existing treatment infrastructure.
Currently, Saidabad Phases I and II collectively produce 450 million litres of water daily. However, the poor quality of raw water from the Shitalakhya River has raised operational costs, deteriorated equipment, and posed health risks. The shift to the Meghna River will enhance treatment efficiency and help reduce the overdependence on groundwater sources.
The loan agreement outlines an indicative fixed interest rate of 1.77% and a variable rate of EURIBOR 6M minus 90 basis points. The loan includes a five-year grace period and a 15-year repayment term. Additionally, the financing comes with a grant component of 25.19%.
