Out-Law News 1 min. read
26 Sep 2019, 3:16 pm
The Asian Infrastructure Investment Bank (AIIB) is considering financing four more projects to help develop Bangladesh's infrastructure, according to Xinhua net.
National news agency BSS said the four projects are Dhaka and Western Zone transmission grid expansion project; Dhaka Sanitation improvement project; Mymensingh Kewatkhali bridge project, and Sylhet to Tamabil road upgradation project.
AIIB vice president Joachim von Amsberg said that AIIB is open to considering more infrastructure projects from Bangladesh that are aligned with its mandate, thematic priorities and sector strategies. He also said that AIIB has approved around $3 million in grants under the 'AIIB Special Fund (SF) for Project Preparation' to prepare two transport sector projects in Bangladesh.
According to an estimate of the World Bank in 2018, in order to meet the need of growing population in power grids, roads and water supplies, Bangladesh must spend $7.4 billion to $10bn per year till 2020. The transport sector alone will require between $36bn and $45bn of investments.
There has been a boom for foreign investment in Bangladesh in recent years, especially in infrastructure and energy.
China's announced investments worth $24bn during Chinese president Xi's visit to Bangladesh in 2016. In July China and Bangladesh agreed to have deeper cooperation on belt and road initiative.
Recently, the government of Bangladesh has signed a $185m financing deal with the World Bank to add about 310 megawatt (MW) of renewable energy generation capacity.
In July the AIIB approved a $100m loan to Bangladesh to accelerate the country’s efforts to deliver improved water supply and sanitation services to underserved communities. Earlier this month UAE-based investors made a collective commitment of more than $10bn of investment in infrastructure in Bangladesh.
Infrastructure expert John Yeap of Pinsent Masons, the law firm behind Out-Law, said:" Bangladesh has seen significant increase in foreign investment in infrastructure in the past few years. Much of this has come through China’s belt and road initiative. "
"Whilst earlier Chinese investments have largely been in energy and power, it is encouraging to see investment diversification into the important sectors of transmission upgrades, sanitation and transportation. The AIIB’s focus in these areas will assist in improving the quality of life in Bangladesh, moving it towards its 'Vision 2021' roadmap of being a middle income country," he said.