Manila, Philippines (BBN)– The Asian Development Bank (ADB) will extend financial assistance of US$615 million for a major bridge project in Bangladesh.

ADB’s Board of Directors on Thursday approved the loan funds for the construction of a multipurpose bridge across the Padma River – the first fixed river crossing for road traffic, linking the southwest of the country, to northern and eastern regions.

ADB is providing over 21 percent of the total investment cost of nearly $2.92 billion for the bridge project. In addition to ADB, the World Bank, Japan International Cooperation Agency (JICA) and Islamic Development Bank are also contributing as co-financiers.

“By providing a vital infrastructure link between the capital city, Dhaka, and the less developed southwest region, the Padma bridge will give the national economy a major boost,” Sultan H. Rahman, Director General of ADB’s South Asia Department said in a statement.

“It is the largest project assistance we have provided to Bangladesh. Implementing such a large project will be a major challenge, and the Government and development partners would need to work very closely to initiate and complete the project on time,” Mr. Rahman added.

The southwest has some of the highest poverty rates in Bangladesh and the absence of a bridge across the Padma River – formed by the confluence of the Ganges and Jamuna rivers – has left it relatively isolated.

Currently passengers and freight are transported over the 5-kilometer wide river on ferries and other smaller vessels, which lack capacity and are frequently suspended during floods, fog and other bad weather conditions.

Bridges in other regions, such as one built with ADB-JICA-WB support across the Jamuna River linking the northwest to the east, have been major growth and poverty reduction drivers for the country, and similar benefits in the southwest region are expected with this project.

“This bridge project will also have wider sub-regional impacts, as it will form part of the proposed Asian Highway route that connects Asia to Europe,” said Hideaki Iwasaki, Principal Transport Specialist in ADB’s South Asia Department.

The physical work will include the construction of a two-level steel truss bridge over six kilometers long, with a four lane highway to accommodate road vehicles on top, and a lower deck with a single track railway to be added in future. Twelve kilometers of approach roads, along with toll plazas and service areas will also be built, while dredging and river bank protection will be carried out.

ADB’s assistance will be extended through two loans. The first amount of $539 million from ADB’s ordinary capital resources has a 27-year tenor, with a 7-year grace period, and an annual interest rate determined in accordance with ADB’s LIBOR-based lending facility.

The second loan of $76 million equivalent from ADB’s concessional Asian Development Fund has a 32-year tenor, with an 8-year grace period carrying an annual interest of 1.0 percent, which rises to 1.5 percent for the balance of the term.

The Bangladesh Bridge Authority is the executing agency for the project, which is due for completion in December 2015.

BBN/SI/AD-25Nov10-11:54 am (BST)