ADB mobilises $261m for expressway connecting Dhaka with other major cities

The Asian Development Bank (ADB) has mobilised $261 million of private sector capital for a four-lane, 13.5-kilometre expressway between Dhaka and other major cities in order to ease traffic congestion and provide better connectivity.

The global lender made the decision as a transaction advisor for the Bangladesh government's Rampura Amulia Demra Expressway public–private partnership (PPP) project, it said in a press release today.

The project is being funded through a $193 million senior loan from the Asian Infrastructure Investment Bank; Bank of China; DBS Bank Limited; and Infrastructure Development Company Limited, a financial institution based in Bangladesh, it said.

The remaining $68 million is provided by sponsors as equity contributions, ADB said adding that it assisted in project structuring, negotiation, tender execution, and provided support for commercial award and financial closure.

"We worked with the public authorities in Bangladesh to prepare, market, and attract private sector partners to design, build, finance, operate and maintain this expressway," said Cleo Kawawaki, head of ADB Office of Markets Development and PPP.

It will provide commuters with quicker access to their destinations by improving connectivity between Dhaka and eastern and southeastern districts of Bangladesh, including the cities of Chattogram, Narayanganj, and the northeastern city of Sylhet, Kawawaki said.

She said the Rampura Amulia Demra PPP project was delivered under an availability payment mechanism with partial revenue linked to US dollar and taka exchange rate movements, whereas the first road transaction, the $370 million Dhaka Bypass Road PPP, was structured as a minimum revenue guarantee.

"ADB has therefore helped establish the pathway for both types of payment mechanisms in Bangladesh for future private sector investments in the infrastructure sector," she said.

ADB is currently advising the government on the Joydebpur Mymensingh Expressway PPP project, which will improve connectivity to 10 special economic zones.

The Rampura Amulia Demra Expressway will be designed, constructed, financed, operated, and maintained during a 25-year concession period by a consortium comprising China Communications Construction Company Limited and China Road and Bridge Corporation, it said.