Gazipur City Corporation (GCC) will establish a wastewater and sludge treatment system aiming to treat domestic sewage.
The plant will be the first of its kind under the Public Private Partnership (PPP) model in the country.
International Finance Corporation (IFC) will provide transaction advisory support to implement the project.
IFC signed an agreement with the Public Private Partnership Authority (PPPA) of Bangladesh to implement the project.
The development agency issued a press release in this regard from its Colombo office on Wednesday.
The proposed wastewater and sludge treatment system in two urban zones – Gazipur and Tongi – under GCC will benefit nearly 2.30 lakh households, said the release.
With an estimated cost of $82 million, the pilot project will include a sewerage network of nearly 137 kilometres, two sewage treatment plants of about 56 million litres per day cumulative capacity, mechanical desludging of septic tanks and transportation of fecal sludge to three treatment plants.
The project is going to be implemented as the result of a three-year effort by the Bangladesh Water Multi-stakeholder Partnership facilitated by the 2030 Water Resources Group, a public-private-civil society multi-donor trust fund hosted by the World Bank Group.
Marking the occasion, Chief Executive Officer of Bangladesh PPPA Sultana Afroz said: "The Wastewater Treatment Project in Gazipur is a big step towards meeting the government of Bangladesh's goal of improving environmental and wastewater treatment standards in line with the sustainable development goals."
"The initiative will serve as a model for rolling out similar public-private partnership projects across the country with the aim of improving citizens' health and increasing Bangladesh's market competitiveness by eliminating untreated wastewater flowing into the ground and water bodies by 2035," she added.
Wendy Werner, IFC country manager for Bangladesh, Bhutan and Nepal said, "The economic fallout from the impact of Covid-19 makes mobilizing funds and expertise from the private sector more important than ever."
He proclaimed that Public-Private Partnerships (PPPs) projects will improve the quality of life for the people of Bangladesh, saying: "PPPs are a proven way to help the government deliver quality services to people."
As a major hub for manufacturing of readymade garment, the country's main export item, Gazipur has seen rapid urbanisation over the past two decades.
At present, the city belonging to over two million people does not have a wastewater treatment plant or a centralised sewerage network.
Sources said nearly 70% of 2.30 lakh households in Gazipur and Tongi areas rely on a decentralised system, which is typically a conventional septic tank and pit latrines, while the wastewater generated by the remaining 30% is discharged directly into open drains or water bodies.
Apart from this project, IFC assisted the Bangladesh government to develop a water distribution network and supply facilities with a capacity to produce 340 million litres of potable water per day for the estimated 1.5 million residents of Purbachal, a new township near the capital.