The EUR 135 million loan will serve to finance the construction of a second track and upgrading of the existing track along with the installation of modern signaling equipment on the 72 km section between Laksam and Akhaura, says a EIB press release on Thursday.
The project is part of a broader programme to upgrade, by 2020, the whole 321 km rail corridor between the capital Dhaka and Chittagong, the second city and main seaport, and will also facilitate the rail connection of landlocked Bhutan, Nepal and the northeast states of India with Chittagong port, the release added.
The total project cost is approximately EUR 555 million (Tk 4940.63 crore). The Asian Development Bank (ADB) will co-finance the project to the tune of EUR 332 million (Tk 2955.48 crore) while the Bangladesh Government will provide EUR 88 million (Tk 7833.80 crore).
The project will be executed by Bangladesh Railways and is expected to be completed by 2022.
The operation will contribute to the EIB’s climate action as it will serve to reduce fuel consumption and therefore greenhouse gas emissions. It will also have positive effects on the health and environment of the local population.
EIB Vice-President Jonathan Taylor, responsible for the Bank’s operations in Asia, emphasized that “The project will contribute to the two main objectives of the EIB’s external mandate: on the one hand, the mitigation of climate change, by promoting a modal shift from road to rail.”
On the other, the development of social and economic infrastructure, by making a key contribution to a major transportation axis, he added.