Manila, Philippines (BBN)- The Asian Development Bank (ADB) will provide US$130.50 million financial assistance aiming to improve the living standards of Bangladesh’s city dwellers, especially the urban poor.

ADB’s Board of Directors has approved the Bangladesh Urban Public and Environmental Health Sector Development Program that composes two loans (a program loan of $70 million and one project loan of $60 million) and a technical assistance grant of $500,000 that will support better public and environment health services in the country’s large cities.

Except for a few city-states, Bangladesh is the most densely-populated country in the world (more than 1,000 people per square kilometer), with an urban population expected to rise to 89.5 million by 2030, from only 39.5 million in 2005.

“As a result of the rapid pace of urbanization, many people live in poor hygienic conditions and are more vulnerable to health hazards,” ADB said in a press statement on Monday.

The Sector Development Program will help reduce child mortality and morbidity by decreasing the prevalence of waterborne and food-related diseases in six cities covering 34 percent of all urban areas in Barisal, Chittagong, Dhaka, Khulna, Rajshahi, and Sylhet and other towns in the South Asian country.

The loans are sourced from ADB’s concessional Asian Development Fund. The program loan will have a 24-year repayment period, and will be released in three tranches ($30 million, $20 million and $20 million) upon compliance with agreed tranche conditions.

The project loan will have a 32-year repayment period. The Bangladesh government will provide counterpart fund of $20 million for the project loan.

The loans have an eight-year grace period, and an interest charge of one percent every year during the grace period and 1.5 percent every year thereafter.

BBN/SS/SI/AD-28September09-7:11 pm (BST)