Dhaka, Bangladesh (BBN)- Bangladesh on Thursday signed a credit agreement under which Asian Development Bank (ADB) will provide $55 million to improve small-scale water services in the country.

The soft credit is expected to improve water services and help cut rural poverty, improve food crop production, increase access to water and address the adverse impacts of climate change.

M Musharraf Hossain Bhuiyan, Secretary, Economic Relations Division (ERD) and Paul J. Heytens, Country Director of ADB’s Bangladesh Resident Mission, signed the loan agreement on behalf of the Bangladesh government and ADB respectively at ERD, Sher-e-Bangla Nagar in Dhaka.

The assistance from ADB’s concessional Asian Development Fund will be used to finance 230 subprojects across the country in the areas of flood management, drainage, water conservation, and irrigation, the ADB said.

ADB’s 32-year loan – with an eight-year grace period carrying a one interest charge and 1.5 percent for the balance of the term – makes up 51.3 percent of the total project cost of $107.3 million.

The International Fund for Agricultural Development will extend a $22 million loan, administered by ADB, while the Bangladesh government and project beneficiaries will make contributions equivalent to $30.3 million.

The Ministry of Local Government, Rural Development and Cooperatives will be the executing agency for the project which is due for completion in December 2017.

BBN/SS/SI/AD-11September09-2:11 am (BST)