Dhaka: Bangladesh government on Sunday signed an additional $47.50 million financing agreement with the World Bank to continue construction of new water infrastructure in Chittagong and provide access to safe water to around 650,000 people in the city.

The agreement was signed by Economic Relations Division (ERD) Additional Secretary Mahmuda Begum and Acting World Bank Country Director for Bangladesh Rajashree Paralkar on behalf of the government of Bangladesh and the World Bank, respectively, at the ERD.

With this additional financing, World Bank support to the project now stands at $218.50 million.

The credits are from the International Development Association (IDA), the World Bank's concessional lending arm. The credits are interest-free and repayable in 38 years, including a 6-year grace period, and carry a service charge of 0.75 percent.

The additional financing to the Chittagong Water Supply Improvement and Sanitation Project will help the Chittagong Water Supply and Sewerage Authority (CWASA) to complete constructing the Modunaghat Water Treatment Plant and Patenga Booster Pumping Station, as well as to install 60 km of new water transmission pipeline and rehabilitate another 73 km pipeline from Kalurghat to the Patenga Booster Pumping Station.

"Only half of the people living in Chittagong Metropolitan Area, the country's second largest city, have access to improved water supply," said Rajashree Paralkar, Acting World Bank Country Director for Bangladesh.

"The financing will help improve access to safe water and sanitation services in Chittagong City. We also hope that CWASA will be able to mitigate the city's water-logging issues by improving the drainage infrastructure with the implementation of the Drainage and Sewerage Master Plans that the project is supporting to finalize," added the World Bank official.

The project has already provided access to improved water to 254,400 people. The additional financing will help 27,000 homes access reliable water supply by installing 10,000 new piped household connections and rehabilitating 17,000 existing connections. Further, the project will install 150 community connections in the city's poorer areas.

The additional financing will also strengthen CWASA's institutional capacity and help CWASA finalize sanitation and drainage master plans for the city.

"The financing will help establish a long-term water supply, sanitation and drainage infrastructure development and operational management program in Chittagong to better serve the growing population in Chittagong city," said ERD Additional Secretary Mahmuda Begum.