The Asian Development Bank (ADB) has signed a $400m loan agreement with the Bangladesh government to support the construction of a new rail line.

This $400m sum is the third instalment of a $1.5bn loan from the ADB for the South Asia Subregional Economic Cooperation's Chattogram-Cox's Bazar Railway Project.

The new 102km dual gauge track will be built from Dohazari to the Cox’s Bazar section of the Chittagong-Cox’s Bazar Railway Corridor located in south-east Bangladesh.

The Chittagong-Cox’s Bazar railway corridor is part of the Trans-Asian Railway (TAR) network. Construction of the 47km section Chittagong-Dohazari is being financed by the government using its own funds.

Representatives of the ADB and the Bangladesh government signed the agreement in Bangladesh's capital city, Dhaka.

This new rail link will help boost trade, investment, and tourism and is expected to open later this year.

By next year, it is expected to be able to transport 2.9 million passengers per year between Chattogram and Cox's Bazar.

The loan is repayable in 25 years and comes with a grace period of five years.

The TAR network is a UN programme aimed at providing continuous train connectivity between Asia and Europe, with the primary objective of effectively connecting people and markets.

The ADB's deputy country director for Bangladesh Jiangbo Ning said it is a "priority investment" that will open up unserved parts of the Cox's Bazaar region.