DHAKA, Oct. 30 (Xinhua) -- The Asian Development Bank (ADB) will provide 87 million U.S. dollars loan to improve the basic services and infrastructure in small and medium-sized towns of Bangladesh.

    The loan, sourced from ADB's Special Funds, will be released in phases. The fund disbursements to each town are linked to governance reform and improvement in urban services, local newspaper The Financial Express reported Thursday.

    As many as 3.8 million people are expected to benefit from the project which will target 35 towns, including slum areas.

    The project expects increases in income, employment, and land values in all participating towns by 2015, with 60 percent of residents in targeted slums to have access to improved services.

    German development institutions, Gesellschaft fur Technische Zusammenarbeit (GTZ) and Kreditanstalt fur Wiederaufbau (KfW), will provide cofinancing equivalent to 4.7 million U.S. dollars and 36.1 million U.S. dollars respectively. The government of Bangladesh will provide an additional 31.7 million U.S. dollars.

    The project will be carried out from 2009 to 2014 in three phases with the Bangladeshi government, ADB, GTZ and KfW jointly reviewing progress at least twice a year.