Saidabad Water Treatment Plant. Photo: AFD

DHAKA, April 30, 2025 (BSS)- A loan agreement worth 200 million Euro was signed today between the government of Bangladesh and France for financing the ‘Saidabad Water Treatment Plant Phase III’ project of Dhaka WASA (DWASA)  under the Local Government Division. 

Md. Shahriar Kader Siddiky, Secretary, Economic Relations Division (ERD) and Cynthia MELA, Country Director, Agence Française de Développement, (AFD) signed the loan agreement on behalf of Bangladesh and France respectively held at ERD in the capital.

Concerned officials of ERD, LGD and DWASA were present at the signing, said an ERD press release.

The purpose of the loan is to ensure sustainable and safe water supply in Dhaka city. Through Saidabad Phase-I and Phase-II plants, around 450 million litres of treated water are supplied per day which are collected from the Shitalakshya River. 

High-level contamination of this water creates health hazards. The pre-treatment process is required to make this water treatable which consumes huge electricity, accelerates deterioration of equipment, raises operational costs and reduces efficiency. 

The implementation of the Saidabad Water Treatment Plant (Phase-III) project will address these issues by replacing the use of Shitalakshya water by the Meghna River as source. 

This shift will help maintain the efficiency of Phase-I and Phase-II while reducing dependence on groundwater. 

As Dhaka continues to expand, the project is essential to ensuring a sustainable water supply for the city's growing population. 

Thus, the existing water quality will be improved. Additionally, Saidabad-III will supply 450 million litres of water per day. The loan will bear an interest rate of 1.77% for indicative fixed rate and Euro 6 M-90bp, where grace period is five years and repayment period is 15 years. The amount of grant is 25.19%.
The release said the AFD has been providing significant support to Bangladesh as part of economic cooperation since 1972.
 
The total support from AFD since 1972 is $2643.36 million. At present, AFD is financing 12 projects with total support of 1341.86 million Euro including 650 million Euro budget support.