The Asian Development Bank (ADB) will provide loans worth US$110m to develop infrastructures in Bangladesh under Public-Private Partnership (PPP) schemes.

An agreement was signed between ADB and Economic Relations Division (ERD) in this regard yesterday at the ERD office in Dhaka.

ERD secretary Mohammad Mejbahuddin and deputy country director of ADB Oleg Tonkonojenkov signed the deal on their respective behalf, said an ADB statement.

The assistance will support the second Public–Private Infrastructure Development Facility established under the state-owned Infrastructure Development Company Ltd (IDCOL).

The World Bank and the Japan International Cooperation Agency (Jica) will co-finance the project with a contribution of $99.5m and $96m respectively.  Private sector investors will also contribute $50m as equity financing and debt funding.

"Low investment in infrastructure is holding back the development and the economic growth in Bangladesh,” said Tonkonojenkov.

He continued as saying, "Getting more power stations, roads, and water networks built would accelerate development, and could draw in more foreign direct investments.”

The assistance will help IDCOL invest more in projects 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 $235m. 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 2m installations in 2013, and is now seeking to finance 2m more by 2015.

The $110m in financing under the Second Public–Private Infrastructure Development Facility, builds on similar previous ADB financing to IDCOL of $165m approved in October 2008 which has been fully committed.

The support is in line with Bangladesh’s sixth five-year plan (2011-2015) which stresses the need to triple investment in infrastructure development from 2% to 6% of GDP with substantial private sector participation through public-private partnerships.

Bangladesh has been a member of ADB since 1973. Since then, the lender has provided Bangladesh with around $15.4bn in loans and grants, including $872m in 2013 alone.

ADB’s priority areas for support in Bangladesh include energy, transport, urban infrastructure and water supply and sanitation, education, agriculture and natural resources, and finance sectors. As of 31 December 2013, ADB’s portfolio for Bangladesh included 58 loans with $5.19bn in total value.

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.