Bangladesh

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. 
 

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.

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.
 

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.