AFD will finance Dhaka WASA with a long term loan of EUR 115 million for the Saidabad Water Treatment Plant – 3 (the signature ceremony was held on 16 May 2018)
[Press release, Dhaka, 16 May 2018]
The Agence Française de Développement (AFD) – the French Development Agency - supports Bangladesh toward sustainable water management, aiming to ensure universal access in Dhaka by 2021.
A growing stress on water resources each year, the population of Dhaka increases by 4.2% – one of the highest urban growth rates in the world. One quarter of Dhaka’s residents live in slums. Providing sufficient infrastructure for all residential needs raises a gigantic challenge.
Dhaka’s drinking-water supply network serves 80% of its residents, or nearly 12 million people. Pockets of unserved areas remain, particularly in the slums. Supply flows remain somewhat inconsistent and vary between districts, averaging 22 hours per day. Almost 80% of the supplied water is drawn from underground reserves through 640 deep tube wells, supported by fossil-fuel based energy-greedy pumps.
Potable water production will need to double by 2030 to meet the metropolitan demand. However, DWASA faces two major environmental problems: the amount of water extracted from aquifers exceeds their recharge capacity, and rivers surrounding Dhaka are becoming more and more polluted.
An answer to these challenges: Saidabad Water Treatment Plant Phase-III Project
The Saidabad Water Treatment Plant Phase-III Project will build a new water treatment plant in Saidabad, that will double the treatment capacity of the existing two water treatment units (Saidabad Phase-I and Phase II), reaching 900,000 million liter per day for the whole station.
The project will also sustain the operations of Saidabad Phase-I and II, in replacing the raw water supply from the Shitalakshya River, which wil be soon unfit for drinking water treatment due to growing pollution, by the Meghna River. This will require the construction of a new water intake on the Meghna River, a pumping station of 900 million liter per day as well as the laying of two 26 km-long raw water pipelines.
The primary goal of the project is to improve potable water quality for about three million Dhaka residents; it also aims to reduce unsustainable groundwater withdrawal.
Long-term sustainability of water supply management requires rivers protection
Following completion of DWASA’s upcoming surface water treatment plants, the Meghna River will become the source of more than 50% of the total drinking water supplied to Dhaka. With the life of millions of people directly depending on it, there is no doubt that the quality of its water needs to be protected.
The development of large-scale water supply infrastructures and long distance pipelines is only viable if accompanied by a strong commitment and proper management plan to preserve rivers from pollution. Coordinated action to protect and revive the rivers, which are the lifeline for the people of the country, is integral to the future economic development of Bangladesh.
A loan of EUR 115 million from AFD in co-financing with KfW, EIB and DANIDA
On May 16th, 2018, AFD signed with the Government of Bangladesh a long term loan of EUR 115 million which will be on-lent to DWASA for the implementation of the Saidabad Water Treatment Plant Phase-III Project. The total project cost is EUR 575 million, out of which EUR 185 million will be financed by the Danish Government through Danida Business Finance, EUR 90 million by the German Government through KfW, EUR 40 million by the European Investment Bank and EUR 5 million by the European Union. AFD acts as the Lead Financial Partner for this project, which will be one of the largest water supply infrastructures financed by European cooperation worldwide.
This is the second loan of AFD to the Government of Bangladesh in the water sector after the signing of a EUR 47 million loan for the Dhaka Environmental Sustainable Water Supply Project (also known as Gandharbpur Water Treatment Plant Project) in 2015. With the support of the European Union, AFD is also engaged in a grant-funded project to provide safe and legal water connection to Low-Income Communities.
This project marks once again the valuable partnership between AFD, the Government of Bangladesh and DWASA. AFD is also glad to pursue its cooperation with other Development Partners in the country.
The Agence Française de Développement (AFD) is a public development-finance institution that has worked for more than 75 years to alleviate poverty and foster sustainable development in developing and emerging countries as well as in the French Overseas Provinces. AFD executes the French Government’s development aid policies.
AFD operates in over 100 countries on four continents through a network of 85 field offices. The Agency provides financing and support for projects that improve living conditions, promote economic growth, and protect the planet.
AFD is currently implementing a portfolio of 2,500 development projects worldwide. In 2017, it committed EUR 10.4 billion to projects under the form of loans, guarantees, grants, technical assistance or equity investment. These newly-funded projects will also help mitigate climate disruption as 50% of AFD’s projects participate to global warming mitigation. Following the success of COP 21 in 2015, AFD aims at being the first 100% Paris Agreement institution.
Dhaka WASA (Dhaka Water Supply & Sewerage Authority) was established in 1963 as an independent organization.
Based on the tremendous geographical expansion and population growth over the last two decades, DWASA’s activities have been reorganized by Dhaka WASA Act, 1996 and it is now operating as a service oriented commercial organization. The service area of DWASA covers more than 360 square km with a population of about 12 million.
The major responsibilities and functions of DWASA are the construction, operation, improvement and maintenance of the necessary infrastructures for:
collecting, treating, preserving and supplying potable water to the public, industries and commercial concerns;
collecting, treating and disposing domestic sewerage and industrial wastes; and
drainage facilities of the city.
Dhaka WASA is one of the largest water utilities in the world.