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.
  • logo linkedin
  • logo email
Bangladesh, water supply, homeless, clean and healthy water, poor, Agence Française de Développement
AFD and Bangladesh: supporting green and inclusive growth
Bangladesh Women pool quantities of rice to generate savings

Improving access to drinking water for all

woman serving water to her son, Bangladesh, water supply, clean and healthy water, poor, Agence Française de Développement

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 network, men, work, agence française de développement

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.

Encouraging sustainable urban mobility

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

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 health and social protection systems


Supporting health and social protection systems

The Covid-19 pandemic illustrated how crucial healthcare and social protection systems are for mitigating economical and health impacts on the most vulnerable populations. In this unprecedented context, AFD extended its support to the Ministry of Social Affairs, as early as 2020, in a modernisation programme of social transfers, collaborating with the World Bank.

In 2021, AFD extended its involvement to strenghten the health and health insurance systems in Bangladesh with a budget support loan. It is supplemented by a technical assistance programme including the training and management of medical personnel involved in the country's response to Covid-19.

billion euros of loans committed since 2013
million euros committed as grants since 2012
of funds invested are in the energy 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 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. Nine years after the opening of the office, AFD’s commitments stand at over €1.14 billion. This figure reaches €1.28 billion when the activities of PROPARCO, AFD’s private sector financing arm, are included.

AFD's Bangladesh office is directly attached to the South Asia regional office in New Delhi.

Interactive map
This map is for illustrative purposes only and does not engage the responsibility of the AFD Group
Launch search
See map of all projects