World Bank Approves $370 Million Loan to Tackle Dhaka Pollution

The World Bank has approved a $370 million loan aimed at improving sanitation and solid waste management services, reducing water pollution, and restoring rivers and canals in the Greater Dhaka area. At an exchange rate of 122.39 Bangladeshi taka per US dollar, this amounts to approximately BDT 4,528 crore. The approval was granted during a board meeting at the Bank’s headquarters in Washington, D.C., according to a statement issued on Wednesday by its Dhaka office.

The programme, titled the Metro Dhaka Water Security and Sustainable Services Programme, seeks to strengthen both local and national institutions in addressing water pollution. It will empower the Dhaka South and North City Corporations and the Dhaka Water Supply and Sewerage Authority (WASA) to manage groundwater extraction and improve service delivery. The initiative aims to provide safe water to 550,000 residents and enhanced sanitation facilities to 500,000 people, prioritising communities most affected by pollution and service deficits.

Jean Pem, World Bank Country Director for Bangladesh and Bhutan, highlighted the urgency of the programme: “Water is a lifeline for millions in Greater Dhaka. Yet rapid, unplanned urbanisation and industrial growth have intensified pollution, impacting public health, the environment, and the economy. This programme will gradually reduce pollution in Dhaka’s rivers and canals while building the institutional framework necessary for sustainable water and sanitation management.”

The World Bank notes that Dhaka faces severe challenges in waste and water management. Only 20% of residents are connected to piped sewerage systems, with a further 2% using effective septic management. Over 80% of untreated wastewater is discharged into interconnected waterways. More than half of Dhaka’s canals have vanished or become blocked, exacerbating pollution. The programme adopts a comprehensive approach, engaging public and private sectors alongside city corporations to improve service delivery, strengthen regulatory frameworks, and restore the flow and quality of rivers and canals.

Dhaka is home to roughly 80% of the country’s export-oriented garment factories. These 7,000-plus factories release an estimated 2.4 billion litres of untreated wastewater daily, causing skin diseases, diarrhoea, and neurological disorders. The programme will enhance private sector participation, particularly in treating industrial effluents and promoting water reuse around Dhaka.

Harsha Goel, Senior Water Supply and Sanitation Specialist at the World Bank and Task Team Leader for the project, explained that the programme prioritises reducing pollution discharges, establishing an institutional and regulatory water quality monitoring system, deploying digital real-time pollution monitoring, and preparing integrated restoration plans for four rivers.

The initial phase will target selected areas in Dhaka and Narayanganj, improving primary waste collection coverage, prioritising disadvantaged communities near major rivers and canals, and enhancing recycling systems. Measures will include halting solid waste dumping, stopping direct discharge of untreated sewage into drainage networks, and preventing industrial effluents from entering waterways.

Key Targets of the Programme