China Eximbank provides RMB 1.79 billion government concessional loan for the Dasherkandi Sewage Treatment Plant Project (Linked to Record ID#52873)

Project narrative

On November 14, 2016, the Export-Import Bank of China and the Government of Bangladesh signed an RMB 1,791,608,000 government concessional loan (GCL) for the Dasherkandi Sewage Treatment Plant Project. The GCL carries the following borrowing terms: an interest rate of 2%, a maturity of 20 years, and a grace period of 5 years. The GCL went ‘into effect’ on May 8, 2017. The borrower was expected to use the proceeds of the GCL to finance a $280 million engineering, procurement, and construction (EPC) contract (commercial contract) between Dhaka Water Supply & Sewerage Authority and Hydro China International Engineering Co. Ltd, which was signed on November 23, 2014. According to the Government of Bangladesh’s Economic Relations Division (ERD), the GCL had achieved a disbursement rate of 31% (RMB 556,633,000 out of RMB 1,791,608,000) as of June 30, 2019, 48% (RMB 860,970,000 out of RMB 1,791,608,000) as of June 30, 2020, and 61.5% (RMB 1,102,297,000 out of RMB 1,791,608,000) as of June 30, 2021. No repayments on the GCL had been made as of June 30, 2020 or June 30, 2021. The Dasherkandi Sewage Treatment Plant is located in Dasherkandi, Dhaka (the capital of Bangladesh), on the eastern side of the Gojaria River. The plant was designed to mainly deal with wastewater in Desherkandi, Hatirjheel, Gulshan, Banani, and Badda in order to eliminate the pollution of the Balu River. The project involved the construction of an off-site sewage lifting pumping station, a 4.8 km sewage conveyance trunk pipe (sewage transport pipe), the main sewage treatment plant which can process 500,000 tons of sewage per day, and a sludge drying-incineration system with a processing capacity of 580 tons per day. Upon completion, the project was expected to provide modern sewerage service to about 5 million people of Gulshan, Banani, Baridhara, Bashundhara, parliament, and adjoining areas including Hatirjheel of the city. Chengdu Engineering Corporation — a subsidiary of Hydro China Corporation (PowerChina) — was the contractor responsible for project implementation. The project was originally scheduled to begin in January 2011 and end in December 2013, but its launch was delayed to insufficient funding. Construction eventually began on August 19, 2018. The project was initially planned to reach completion by December 2019. However, by November 2020, the project’s expected completion date was pushed back to 2021. Project implementation delays included dengue fever, terrorist attacks, and the COVID-19 epidemic. The sewage treatment plant started trial operations in December 2021 and a project handover certificate was issued on March 31, 2022. Then, on April 1, 2022, the sewage treatment plant went into operation. Chengdu Engineering Corporation is responsible for one year of operations and maintenance at the plant. A completion ceremony was held on July 13, 2023 and attended by Prime Minister Sheikh Hasina. The Dasherkandi Sewage Treatment Plant is reportedly the first and the largest modern sewage treatment plant in Bangladesh, the largest single sewage treatment plant in South Asia, and the first modern sludge drying-incineration in Bangladesh.