Since 2010, Bangladesh has been experiencing remarkable economic development. However, it still falls short of what is needed to eradicate poverty, especially in urban areas. AFD is helping the country lay the foundations for sustainable growth that benefits everyone.
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Bangladesh Women pool quantities of rice to generate savings
AFD and Bangladesh: Addressing the challenge of urban development
Bangladesh Women pool quantities of rice to generate savings

Developing public transport

Traffic jams in Dhaka, Bangladesh

Developing public transport

Bangladesh is a predominantly rural country (72% of the population), but is experiencing rapid population growth in urban areas: the number of city dwellers is currently estimated at 43 million people, but is expected to double by 2030 and exceed 100 million by 2050. With some 45,000 inhabitants per km², the capital Dhaka is today the most densely populated megacity in the world. It is also the only city without any public transport system. This leads to constant traffic jams, which hamper economic activity and pollute the air. 

AFD is improving urban mobility by developing low-carbon public transport. 

For example, in Dhaka, we are cofinancing the construction of a bus rapid transit (BRT) line, which will connect the north of the city to the airport. These high-capacity buses will run on a reserved lane. This project will improve productivity in Dhaka City and increase access to jobs and urban facilities for the entire population. 

Thanks to funds delegated by the European Union, we are also leading a technical assistance program to strengthen coordination between the various actors and authorities responsible for transport in the capital. The objective: improve urban mobility governance

Improving access to drinking water for all

Woman filling her jug of water, Bangladesh

Improving access to drinking water for all

Dhaka has 17 million inhabitants and the number of people living in the capital increases by 500,000 a year. Access to drinking water for all is a major challenge: to meet demand, its production will need to double by 2030. Yet the city currently covers 70% of its needs through groundwater withdrawals. This is too much for them to be replenished. The authorities aim to address the situation by exploiting surface water. These abundant sources are located near the capital, but they are polluted and the process to make them clean is complicated.

AFD is cofinancing two new drinking water treatment plants to improve the distribution of water resources. They will draw water from rivers further away from the city. They are cleaner and the project will ensure that they remain so. 

In January 2015, we launched a project in partnership with the Asian Development Bank, which aims to increase drinking water production by 500 million liters a day. Some 2 million people will benefit.

It is completed by a second project. It aims to reduce groundwater withdrawals, improve the quality of the drinking water service and increase its production by 450 million liters a day. It will cover the water needs of 2.5 million people. AFD is the lead donor for this financing, in which Germany’s KfW and the European Investment Bank are participating. 

Furthermore, AFD is managing a European Union grant to finance the connection of a large number of slums to the water distribution network. Indeed, drinking water supply in the capital’s precarious districts is one of the priorities of the Government of Bangladesh. This project will improve living conditions for 300,000 people. 

We are also financing a preliminary feasibility study for the implementation of a water and sanitation project in a dozen or so secondary cities in the country. 

Strengthening electricity networks

Bangladesh electricity street

Strengthening electricity networks

In Bangladesh, power cuts are frequent, including in the capital. The instability of the power grid seriously hinders the country’s economic and industrial development. The Government of Bangladesh has set the target of doubling its power generation capacity from 12 to 24 GW between 2016 and 2021.

AFD is financing a project to modernize and extend Dhaka’s DPDC power distribution company’s power grid. This project has a triple benefit: it provides a stable power supply, reduces losses caused by the poor quality of the distribution grid, and reduces greenhouse gas emissions per kWh consumed. Some 5 million people are benefiting from this project, including 250,000 families living in slums.

Promoting CSR in the textile industry

Bangladesh textile workshop women

Promoting CSR in the textile industry

With 4,500 exporting factories, Bangladesh is the second largest textile product manufacturer in the world, after China. The sector accounts for 80% of the country’s exports (mainly to Europe and the USA) and employs some 5 million people.

The Rana Plaza collapse (1,138 people killed in April 2014) highlighted the lack of and/or failure to comply with social and worker protection standards. Certain buyers subsequently set up groups, such as Accord and Alliance, to conduct factory audits and improve working conditions for employees.

AFD is leading a European credit program which allows factories to invest in the safety of production buildings and in bringing them up to social and environmental standards. The EU and two German institutions, KfW and GIZ, are partners of this initiative.

We are also financing a study which aims to define the actions required to bring the textile industry in line with CSR (Corporate Social Responsibility) standards.

Supporting the development of a maritime and waterway economy

Bangladesh boats river fish

Supporting the development of a maritime and waterway economy

Bangladesh is an immense delta with considerable aquatic potential: three major Himalayan rivers flow through the country (the Ganges, the Brahmaputra and the Meghna) and it is crisscrossed by an abundant network of over 700 rivers and tributaries making up 24,000 km of waterways. The country also has a 700 km-long coastline, which opens out onto the Bay of Bengal, and its maritime space is equivalent to 80% of its land space, i.e. some 120,000 km² of territorial waters. These resources are major assets for the country: traffic routes, energy sources, fishing, naval industry, tourism, etc. Since the resolution of its maritime border conflicts with India (2014) and Burma (2012), Bangladesh, which has become aware of the potential of this maritime space, wants to protect it and develop it.

The workshop organized by the French Embassy and the Ministry of Energy’s “Blue Economy” unit in Dhaka in March 2017 showed that AFD has the means of action required to build a maritime and waterway economy. It can support climate-resilient infrastructure projects in coastal areas, set up flood forecasting instruments and weather risk management tools, support marine and river energies, ensure sustainable fisheries management, etc. 

million committed since 2013
projects ongoing
57 %
of commitments in the urban development sector

Since 2010, annual economic growth has stood at 6% in Bangladesh. This performance is combined with considerable social progress. However, the challenges remain daunting: facilities and equipment are still inadequate, one of the highest population densities in the world, increasing urbanization and a high exposure to climate risks. AFD operates in Bangladesh to address these challenges.

The opening of an office in Dhaka in May 2013, attached to the regional agency in New Delhi, has considerably improved project identification and implementation, in partnership with the administrative authorities and other international donors. Our focus area: financing large-scale infrastructure projects and promoting access to essential services for the people. Five years after the opening of the office, AFD’s commitments stand at over EUR 360m. This figure reaches EUR 460m when the activities of PROPARCO, AFD’s private sector financing arm, are included.

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Funding type


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  • Climate
  • Energy
  • Health
  • Inequalities
  • Infrastructure
  • Sustainable Cities
  • Sustainable Consumption and Production
  • Water and Sanitation

Funding type

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  • Delegation of European Union Funds
  • Sovereign Concessional Loan


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Research document

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The past decades have seen a growing appreciation of the role of market-based approaches in driving global development. Many coalitions of public and private players have emerged to promote them. ...
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Institutional document

AFD and Bangladesh