Bangladesh Seeks $4.5 Billion Foreign Funds for Dhaka-Chattogram Expressway

The Financial Express, Dhaka — The government has begun searching for nearly US$4.5 billion in foreign financing to build the proposed Dhaka-Chattogram Expressway, one of Bangladesh's largest planned transport infrastructure projects — strategically important for connecting the capital with the country's principal seaport.

With the total project cost estimated at Tk 710 billion, the government is exploring concessional loans, co-financing, and alternative models, including public-private partnerships, to develop the strategic economic corridor linking Dhaka with Chattogram Port, officials said on Saturday.

💰 Project Financing Structure

Of the Tk 710 billion total project cost:

• 💰 Foreign financing (target): Tk 550 billion (~US$4.48 billion)
• 💰 Government own exchequer: Tk 160 billion
• 💰 Total project cost: Tk 710 billion
• 💰 Foreign financing share: ~77.5 percent of total project cost

🏛 Planning Commission and ERD Engagement

The Planning Commission (PC) recently requested the Economic Relations Division (ERD) to explore sources of foreign financing for the project. Planning Commission Chief Kabir Ahmed told the FE that the preliminary development project proposal (PDPP) had already been sent to the ERD to explore foreign financing options.

The expressway project will require massive investment to develop the economic corridor connecting Bangladesh's largest port in Chattogram with the capital, Dhaka, he added — underscoring the strategic significance of the project for Bangladesh's broader logistics infrastructure.

🇦🇻 ADB Interest and Hybrid Co-Financing

The Asian Development Bank (ADB) has already expressed interest in financing the construction of the Dhaka-Chattogram Expressway, said an official of the Ministry of Road Transport and Bridges (MoRT&B). The ERD is also attempting to prepare a hybrid co-financing proposal. The framework could potentially bring in the Asian Infrastructure Investment Bank (AIIB) alongside traditional lenders to break the financing deadlock.

The hybrid co-financing approach reflects the scale of the project:

• 🇦🇻 ADB: traditional multilateral development partner
• 🇦🇻 AIIB: China-led infrastructure investment bank
• 🇦🇻 World Bank: possible additional co-financier
• 🇦🇻 JICA: Japanese development partner for transport projects
• 👥 PPP model: public-private partnership alternative

🚧 Project Background and Justification

The ministry recently sent a preliminary development project proposal (PDPP) to the Planning Commission, as the planned Dhaka-Chattogram Expressway will require Tk 710 billion in funding. The project justification includes:

• 🚧 Existing Dhaka-Chattogram highway: currently 4 lanes, often congested
• 🚧 Cargo volume: handles more than 80% of Bangladesh's total import-export cargo
• 🚧 Project objective: ease congestion and ensure smoother movement of passengers and freight
• 🚧 Economic corridor: connecting capital Dhaka with principal seaport Chattogram

🚢 Strategic Significance: Chattogram Port Connectivity

The Dhaka-Chattogram Expressway has direct strategic significance for Chattogram Port operations:

• 🚢 Chattogram Port 2025 throughput: 3.41 million TEUs (4.1% YoY growth)
• 🚢 Global ranking: 68th (Lloyd's List One Hundred Ports 2026)
• 🚢 Laldia terminal addition: ~1 million TEUs annually from 2030 (APM Terminals project)
• 🚢 Dhaka-Chattogram corridor: handles 80% of import-export cargo
• 🚢 Maersk investment interest: in Bangladesh shipbuilding (separate report)

The expressway will support the projected growth in Chattogram Port container throughput by ensuring faster and more reliable cargo movement between the port and the Dhaka consumption and production centres — reducing logistics costs and improving supply chain efficiency for both imports and exports.

📊 Strategic Context: Bangladesh Infrastructure Investment

The Dhaka-Chattogram Expressway project comes amid broader strategic context:

• 💰 FY26 foreign loan disbursement (July): $180.18 million (low)
• 💰 FY26 foreign loan repayment (July): $453.23 million (2.5x disbursement)
• 💰 Government bank borrowing FY26: Tk 165,538 crore (exceeding target)
• 💰 LDC graduation: November 2026 narrows concessional finance access
• 💰 Foreign financing decline: -20% YoY in FY26
• 💰 Dhaka Airport third terminal: Tk 902 crore more needed (separate DS report)

The combination of declining foreign loan disbursements and rising repayment pressure creates a challenging environment for mobilising the $4.5 billion in foreign financing required for the expressway project — making the hybrid co-financing approach particularly strategically important.

🌏 Implications for Bangladesh Logistics

The Dhaka-Chattogram Expressway has significant implications for Bangladesh's logistics infrastructure:

• 🚧 Reduced transit time: faster cargo movement between Dhaka and Chattogram
• 🚧 Lower logistics costs: reduced fuel consumption and vehicle wear
• 🚧 Increased corridor capacity: additional lanes to handle growing cargo volume
• 🚧 Improved export competitiveness: faster time-to-market for RMG exports
• 🚧 Reduced port congestion: faster container evacuation from Chattogram
• 🚧 Better passenger connectivity: smoother movement between two largest cities

🌏 Strategic Implications

The $4.5 billion foreign financing search for the Dhaka-Chattogram Expressway carries several strategic implications:

• ✅ $4.5 billion foreign financing target: largest single infrastructure FDI mobilisation
• ✅ ADB interest confirmed: traditional multilateral partner engaged
• ✅ AIIB hybrid co-financing: breaking financing deadlock through multilateral coordination
• ✅ PPP alternative model: private sector participation option
• ✅ Strategic corridor significance: 80% of import-export cargo
• ✅ Chattogram Port connectivity: supports projected container throughput growth
• ✅ Export competitiveness: faster time-to-market for RMG exports
• ⚠️ Foreign financing decline: FY26 disbursements down 20% YoY
• ⚠️ Repayment pressure: 2.5x July 2026 disbursements
• ⚠️ LDC graduation constraint: concessional finance access narrowing

The Dhaka-Chattogram Expressway represents one of Bangladesh's most strategically important infrastructure projects — with the potential to materially improve the country's logistics efficiency and export competitiveness. The $4.5 billion foreign financing search reflects both the scale of the project ambition and the challenging external financing environment Bangladesh faces through the LDC graduation transition period. The hybrid co-financing approach — bringing together ADB, AIIB, and potentially other multilateral partners — represents the most viable path to mobilising the required financing before the LDC graduation transition narrows concessional finance access. If successful, the expressway would provide Bangladesh with a modern, high-capacity economic corridor connecting its two most important economic centres through the post-graduation period.