DHAKA, July 18 (Xinhua) -- The Asian Development Bank's (ADB) has approved 526 million U.S. dollars to help sustain and increase infrastructure investments in Bangladesh, particularly in financing public-private partnership (PPP) projects as well as renewable energy interventions.
The assistance consists of a 500-million-U.S. dollar market-based loan to finance medium and large-scale PPP infrastructure projects, and a 26-million-U.S. dollar concessional loan to finance small and medium-sized renewable energy and energy efficiency facilities, primarily in the rural areas of the country, said the Manila-based lender on Tuesday.
Both loans are under the Third Public-Private Infrastructure Development Facility (PPIDF 3), it said.
"Infrastructure development is an integral part of Bangladesh's rapid economic growth, but it is undeniable that in order to sustain this growth, the country would need an increased investment in infrastructure that can be filled in by the private sector," said Peter Marro, an ADB principal financial sector specialist.
ADB says Bangladesh has recorded steady average growth of 6.3 percent between 2011 and 2015, enabling it to attain lower-middle income status in July 2015. But real gross domestic product (GDP) growth would need to reach an average annual rate of 7.4 percent during the 7th Five-Year Plan to move Bangladesh toward upper middle-income level.
Such targets will require a substantial increase in public and private investments from about 29 percent of GDP in 2015 to 34.4 percent by 2020, it said.
The gap in infrastructure financing alone is estimated at between 5 percent and 6 percent of GDP or a shortfall of 9 billion U.S. dollars to 10 billion U.S. dollars a year, said the bank.