Bangladesh to get $170 mln ADB loan for food

DHAKA, Aug 4 (Reuters) - Bangladesh will receive a $170 million loan from the Asian Development Bank (ADB) to cope with rising prices, particularly of food, the bank said on Monday.

The ADB and Bangladesh on Monday signed an agreement for the loan, which formed part of the government's $1.29 billion broader food security package being supported by the ADB and other international agencies, the bank said in a statement.

The Manila-based bank will also provide $600,000 as a grant to help the government improve food security.

"The assistance will help the government to ensure access to food for those hardest hit by recent natural disasters in Bangladesh and the rapid increase in food prices," the statement said.

Bangladesh, which usually imports food grains to replenish emergency stocks, suffered two massive floods and a devastating cyclone in the second half of 2007. The disasters caused a rice production shortfall of 2 million tonnes and adversely affected food supply for an estimated 25 million people.

Soaring food prices have worsened the burden on Bangladesh's poor, who allocate about 70 percent of their total spending on food.

Bangladesh is the first developing member-country to receive ADB support after ADB President Haruhiko Kuroda announced in May it would provide up to $500 million in immediate support to the hardest hit countries in Asia and the Pacific.

The ADB has also increased lending for agriculture and rural development to more than $2 billion in 2009 for those countries, including Bangladesh.

($1= 68.50 taka)

(Reporting by Serajul Islam Quadir; Editing by Anis Ahmed and Jacqueline Wong)